In force from 4 January 2022, the Act grants the UK government wide-ranging powers to scrutinise and intervene in business transactions that may pose risks to national security. And, the wide-ranging scope of the Act could be more impactful than you might expect.
The Act sets out 17 key sectors subject to mandatory notification, such as defence, energy, artificial intelligence (AI), data infrastructure, and communications. If an acquisition of a qualifying entity or asset falls within these sectors, clearance must be sought from the government to proceed. The Act gives government the power to review, impose conditions upon or block a relevant acquisition.
If the NSIA applies, there is a duty to notify the government and obtain permission to proceed. Failure to notify can render a deal void and may lead to fines of up to £10 million or criminal sanctions.
Bear in mind businesses providing services to key sectors may fall foul of the Act. For example, a cleaning company servicing a government office may fall within the scope of the NSIA. It is therefore important for any acquirer to carry out appropriate and thorough due diligence on the target to determine the same, even if it does not appear to be overtly relevant.
Clearance times can vary, but once an application is received, the government has 30 working days to decide whether to call an acquisition in for review. If an acquisition is called in, the government has an additional 30 working days to decide if remedies are required. The NSIA is therefore an important factor to deal with early in any transaction to inform timeframes and avoid unnecessary delays.
If you wish to discuss this further, please do not hesitate to contact Katie Hilsdon by email: kh@cooperburnett.com or tel: 01892 515022
This blog is not intended as legal advice that can be relied upon and CooperBurnett LLP does not accept any responsibility for the accuracy of its contents.
Originally published in the Tunbridge Wells Business Magazine: www.twbusinessmagazine.com
