National Security and Investment Act

An entity is defined as an organisation, partnership or trust that is from, located in or has a connection to the UK. An entity becomes a qualifying entity if it is operating in one of the seventeen nominated areas of the economy. (See below)

When a qualifying entity is acquired, the acquirer must inform the government if the level of control meets any of the following thresholds:

• the acquirer obtains a shareholding, stake or voting rights exceed 25%
• the acquirer obtains the ability to pass or block resolutions governing the affairs of the qualifying entity
• the acquirer obtains the ability to materially influence the policy of the qualifying entity

Notifiable acquisitions have to be submitted online. Failure to notify the government of a notifiable acquisition will render the acquisition void.

A qualifying asset is defined as tangible moveable property (such as equipment) and land. It is also an intangible property in the form of ideas, information or techniques which have industrial, commercial or other economic value. Intellectual property (IP) is classed as a qualifying asset.

Organisations often gain control over qualifying assets such as IP (via contracts or collaboration agreements) from funding research programmes. These contracts and agreements constitute the acquisition of a qualifying asset and therefore fall within the scope of the NSIA.

When a qualifying asset is acquired (or control over the qualifying asset is acquired) and the acquisition presents (or has the potential to present) a national security risk, a voluntary notification should be made. Voluntary notifications can be made by any party involved in the acquisition.

The requirement for mandatory notification only applies to qualifying acquisitions. There are 17 entities in 17 sensitive areas the UK government considers likely to give rise to national security risks.

The 17 areas are:

• Advanced Materials
• Advanced Robotics
• Artificial Intelligence
• Civil Nuclear
• Communications
• Computing Hardware
• Critical Suppliers to Government
• Cryptographic Authentication
• Data Infrastructure
• Defence
• Energy
• Military and Dual-Use
• Quantum Technologies
• Satellite and Space Technologies
• Suppliers to the Emergency Services
• Synthetic Biology
• Transport