18 Oct 2017

NSII Review – Consultation Open

The Secretary of State for Business, Energy and Industrial Strategy has published a Green Paper entitled: “National Security and Infrastructure Investment Review: the Government’s review of the national security implications of foreign ownership or control and the mergers regime”. This delivers on the Government’s commitment, made in September 2016, to reform the approach to the ownership and control of critical infrastructure to ensure that the full implications of foreign ownership are scrutinised for the purposes of national security.

Foreign direct investment brings considerable benefits to the UK economy: the injection of capital, new jobs, ideas, talent and leadership. Our intention is for the UK to remain among the most open economies in the world. However, Britain’s rightly praised openness to foreign investment needs to be accompanied by appropriate scrutiny of the potential national security impacts.

The Government is taking a staged approach to reforming how it scrutinises the national security implications of business transactions.

In the short term the Government intends to introduce secondary legislation to close the current gaps in the Enterprise Act 2002. This will enable Government to intervene, if necessary, in mergers in key parts of the economy that currently fall outside the current thresholds but may raise national security concerns.

The areas are:

  • Dual use and military use technologies

(ii)       Parts of the advance technology sector

The proposed longer-term reforms seek to ensure adequate scrutiny of whether significant investment in our most critical businesses – those which are essential to our country and society – raises any national security concerns, and provide the ability for Government to act in circumstances where this might be the case.

The vast majority of investment into the UK’s economy raises no national security concerns and the expectation is that the need to act would be relatively rare. Scrutiny does not mean making any part of the UK’s economy off-limits to foreign investment. The proposals are concerned only with national security, and we are consulting on how to bring our powers into line with other developed, open countries.

The consultation is now open; we invite views on the short-term proposals until Tuesday 14 November 2017 and on the long-term proposals until Tuesday 9 January 2018. Responses can submitted via Citizen Space at https://beisgovuk.citizenspace.com/ccp/nsiireview/ or can be sent to nsiireview@beis.gov.uk.

The Green Paper and impact assessment are available online here: https://www.gov.uk/government/consultations/national-security-and-infrastructure-investment-review.

 

I would encourage you to look closely at the proposals in the Green Paper and feed back your views.

 

Yours faithfully,

 

DE&S Principal Security Advisor

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