The UK government has completed its switch-on moment for the National Security Investment Act coming into force next month.
Hosted by David and Michael at the Institute of Chartered Accountants in England and Wales (ICAEW), UK peer Lord Callanan explained the rationale behind the move, which will affect deals in 17 core sectors that might impact UK national security, similar to approval rules in the United States (CFIUS), Germany, Australia and Canada.
Chris Blairs from the UK ministry running the supervision unit, BEIS, and Andy Sellars at the CSA Catapult representing entrepreneurs and researchers from a majority (nine) of the affected tech areas, said about a third of deals could require notifications with maybe 10 to be reviewed based on prior analysis, though lawyers and advisers said almost all public deals would likely be put forward.
The act will replace the Enterprise Act of 2002, which has only had about a dozen cases called in for review and none blocked, including the controversial Newport Wafer deal in the summer, when the UK’s only fabless semiconductor producer was seized by one of its corporate venturing investors for failure to hit a conditional clause regarding chip delivery.
Although the Newport deal is nominally still under review, a Companies House filing shows a transfer of shares has occurred – a move very hard to unpick ex post facto, lawyers said.
A greater impact could relate to how BEIS approaches protecting university researchers and startups before a controlling (defined as a share of at least 25% of shares or voting rights, or with material impact on governance) takeover or investment happens.
Here, a little more progress is being made behind the scenes to limit university vice-chancellors’ proclivity to take hostile actors’ money, but almost nothing on the training for venture investors and procurement support for startups to tackle cybersecurity.
Nicole Perlroth’s sobering investigation into the cyber weapons arms race, This Is How They Tell Me the World Ends, has just been named Financial Times and McKinsey Business Book of the Year for 2021 and should be read more inside government as well as business.
