I am today laying before Parliament the first annual report under the National Security and Investment Act 2021. I will place copies in the Libraries of both Houses and the report will also be published on gov.uk.
The National Security and Investment Act 2021 protects the UK from risks to national security arising from acquisitions of control of entities and assets. In doing so it also maintains the UK’s status as an attractive place to invest. The system is predictable, enabling businesses involved in acquisitions to have certainty when engaging with it and it provides clear and efficient clearance processes for relevant acquisitions to be assessed, for remedies to be applied if necessary.
The new National Security and Investment (NSI) system commenced on 4 January 2022. The Act requires me to report on the system each year after 31 March.
I am pleased to lay the first NSI Act annual report before the House today. This fulfils my requirements under section 61 of the Act for this year.
The report shows that the system has started strongly. As of 31 March, the Investment Security Unit received 222 notifications and accepted 201 of them. To that date I had issued 17 call-in notices. Of those notifications that were cleared without any further action, all were cleared within the statutory 30 working-day limit. I had not imposed any final orders (the means by which I can impose conditions on, block, or unwind an acquisition) by 31 March in relation to the 17 call-in notices issued, though the full national security assessment process was still ongoing for many of them.
Because the data covers only the first three months of the Act’s operation, we cannot draw long-term conclusions or observe patterns with accuracy. However, the system is operating well and, extrapolating out, volumes at each stage are within the estimates provided by the impact assessment.
We brought forward the reforms in the NSI Act to protect national security while keeping the UK open to investment. The early data is encouraging and shows that these objectives can be complementary rather than mutually exclusive. Those who wish us harm should be in no doubt that we will always act to protect the UK’s national security interests. Equally, the Government’s ambition is for the UK to be the best place in the world to invest and to start and grow a business, so I hope that business leaders and investors will take confidence from this report.
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