UK enforces biggest national security shake-up in years
The UK government’s National Security and Investment (NSI) Act has come into force, giving the state new powers to intervene in business and investor takeovers across 17 critical areas of the economy.
On Tuesday morning, the government published a press release confirming the NSI Act would come into force with immediate effect. The statement described it as “the biggest shake-up of the UK’s national security regime for 20 years.”
The law gives ministers the ability to scrutinize and intervene in acquisitions made by anyone, including businesses and investors, where there is potential harm to the UK’s national security.
It identifies 17 sectors of the economy where it is necessary to give ministers greater powers to oversee acquisitions. They will now be able to securitize deals in a wide range of areas, including advanced robotics, artificial intelligence, the civil nuclear sector, transport, quantum technology, and the defense space.
The government already had some powers to block deals where a foreign-led takeover could affect things like economic stability, media plurality, and the pandemic response.
“The UK is world-renowned as an attractive place to invest but we have always been clear that we will not hesitate to step in where necessary to protect our national security,” Business Secretary Kwasi Kwarteng said in a statement.
The move comes amid a great deal of controversy surrounding the $40 billion ($54 billion) takeover of British chipmaker ARM by American multinational Nvidia.
UK firms have often been easy pickings for US multinationals and private equity. The recent takeovers of defense suppliers Ultra Electronics and Meggitt also attracted government scrutiny.
Other industries, notably pharmaceuticals, have been a target for US-led takeovers.