D-day announced – UK's new National Security and Investment Act regime to begin on 4 January 2022

Key points to take away from this briefing:

• BEIS have opened a new consultation ("Consultation") relating to its proposed use of its discretionary "call-in" power. The Consultation largely replicates the Statement of Policy Intent that was published on 12 November 2020 and, in essence, sets out the three-pronged assessment that BEIS will carry out to determine whether a particular transaction bears any likely national security concerns (which, if answered in the affirmative, would require BEIS to "call-in" the transaction for review). Whilst BEIS still fails to provide any definition of "national security" or to give concrete examples as to what particular national security concerns it is likely to have, it nonetheless gives an overview of the general risk assessment it will conduct and provides hypothetical examples as to how this assessment will work in practice.
• A draft version of the statutory instrument ("SI") containing revised definitions of the 17 key sectors has been published. Since BEIS concluded a separate consultation on these definitions in March (see our briefing here), in which the initial definitions proposed on 12 November 2020 were substantially revised, the definitions in the draft SI have not been greatly altered since (bar some technical clarifications). The draft SI will be presented to the UK Parliament for approval in the autumn and, once it has been passed into law, these definitions will be fully finalised. Under the terms of the draft SI, the Secretary of State will keep these definitions under review and publish a report on their effectiveness every three years.
• Guidance on the extra-territorial impact of the NSIA has been published. One of the NSIA's more controversial elements is its stated potential ability to apply to companies, assets and/or persons which are located outside of the UK. This new guidance sets out the criteria for this extra-territorial application and gives examples of what will and will not constitute a situation that is potentially within the scope of the NSIA in this context.
• BEIS has provided further clarifications as to how the NSIA regime will operate in relation to other regulatory regimes in the UK, such as the public interest regime under the Enterprise Act 2002 and the merger control regime overseen by the Competition & Markets Authority ("CMA").
• Interestingly, BEIS have also issued guidance relating to how the NSIA will affect research projects conducted by universities and other organisations. In a move that is clearly trying to ensure the protection of future technologies and intellectual know-how developed in the UK, BEIS sets out examples of situations in which the funding of research projects undertaken by these institutions might fall under the purview of the NSIA.

The publication of the Consultation and guidance documents is an important step towards implementing the new NSIA regime. Whilst a number of helpful clarifications have now been provided to stakeholders in the UK and abroad, BEIS has only just begun the process of publishing all the necessary guidance and secondary legislation needed to add flesh to the bones of the new NSIA regime. It is expected that such further publications will be forthcoming in the next few months.