and 28 working days to clear voluntary and mandatory notifications, respectively. The vast majority – 95.5% – of transactions are approved within the initial review period. ^ Assessment period: Full national security assessment: the ISU has up to an additional 30 working days to decide whether to clear the transaction, impose remedies, extend the period for assessment or prohibit the transaction. The assessment period can be extended by a further 45 working days and further by a period of time agreed by the government and the acquirer. During the review period, the government can exercise its “call-in” power in respect of any qualifying acquisition, whether arising from a mandatory or voluntary notification, or as a result of its own investigations. The “call-in” power is broadly framed, and the government can retrospectively review transactions that closed on or after November 12, 2020, for a period of up to five years, although this is reduced to six months if the government has “become aware” of the transaction. The ISU has broad investigatory powers, including the ability to request information and meetings with the parties. The Act also foresees a wide range of remedies to address national security concerns, including imposing conditions and blocking transactions as well as issuing interim orders to prevent parties from acting, which may undermine the ISU’s ability to effectively resolve potential national security concerns. Non-compliance carries severe penalties, including imprisonment of up to five years, fines up to 5% of worldwide turnover or £10 million (whichever is greater) and transactions being legally void if closed in breach of the NSI Act. Recent Filing Data The UK government’s annual report on the NSI Act for the period spanning April 1, 2024 to March 31, 2025 (the Reporting Period) reveals that the ISU processed 1,143 notifications, comprising 954 mandatory notifications, 134 voluntary notifications and 55 retrospective validation
also take into consideration potential risks arising from the target company’s proximity to “sensitive sites.” ^ Acquirer risk: Whether the acquirer has characteristics that suggest there is, or may be, a risk to national security from the acquirer having control of the target company. This assessment will consider not only an acquirer’s country of origin, but also its ties or allegiance to a state or organization hostile to the UK. ^ Control risk : The amount of control that has been, or will be, acquired through the qualifying acquisition. A higher level of control may increase the level of national security risk. Where a transaction raises such risk, parties should consider making a voluntary notification to obtain legal certainty that the transaction will not be assessed by the government. Review Process The NSI regime is overseen by the Investment Security Unit (ISU) in the Cabinet Office, the ministerial department supporting the Prime Minister. The review process of qualifying acquisitions is divided into three parts: ^ Assessment of a notification’s completeness: The ISU is not subject to a statutory time limit but in practice accepts mandatory notifications within a median of seven working days and voluntary notifications within a median of eight working days from submission. When a notification is rejected, the ISU will inform the parties of the rejection and the reasons for it. The rejection is communicated within a median of 20 working days for mandatory notifications and 16 working days for voluntary notifications. ^ Review period : The ISU has a statutory deadline of up to 30 working days to clear or call-in a transaction for a full national security review, with the ISU taking on average 27
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FDI and National Security Review
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