The Department for Business, Energy & Industrial Strategy (BEIS) has published the final version of its Statement on when it will exercise its call-in powers under the National Security and Investment Act 2021 (NSI Act). We discussed the guidance, and the impact of the regime on transactions generally, in a webinar with the Investment Security Unit (ISU) earlier this week.
The NSI Act, which comes into force on 4 January 2022, gives the UK Government power to scrutinise a wide range of transactions on the grounds of national security, and will introduce mandatory notification of transactions in some sectors. For further information on the regime, see our briefing.
Statement on use of call-in power
The Statement discusses the risk factors that the Secretary of State will look at in deciding whether to exercise the call-in power. It will consider:
- Target risk – what the target does, is used for, or could be used for, and whether that has given rise to, or may give rise to, a risk to national security;
- Acquirer risk – whether the acquirer poses a risk to national security; and
- Control risk – the amount of control the acquirer gains of an entity’s activities or strategies.
The Statement also discusses the application of the regime to assets, its extraterritorial effect and the retrospective use of the call-in power.
Our webinar with the ISU
We recently held a webinar with members of the ISU (the Government body set up to administer the regime). Issues discussed during the webinar include:
- the application of the regime to intra-group transactions;
- what happens if a party accidentally crosses a notification threshold; and
- how the regime will apply on a private M&A auction process.
For further details on the discussion and to listen to the webinar, click here.