Government tightens control of foreign investment to tackle security risks
12 November 2020: Major changes to the scrutiny of foreign acquisitions and investment in the UK have been outlined by the government as it looks to beef up national security and prevent overseas companies from buying up sensitive UK assets.
The National Security and Investment Bill published yesterday sets out new powers that allow the government to scrutinize investments and intervene in takeovers and investments by foreign companies where it believes there could be a risk to national security.
The new powers, which come into immediate effect from 12 November 2020, stipulate that prospective overseas buyers of UK companies, shareholdings or intellectual property across 17 sensitive industries (including civil nuclear, communications, data infrastructure, artificial intelligence and computing hardware) will have to alert a new government unit – the Investment Security Unit – about their proposed transactions (mandatory notification). Directors of overseas companies that fail to do so could face personal fines of up to £10m, or their businesses could pay penalties worth up to 5% of annual turnover.
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