National Security & Investment Act 2021

One year on - Key lessons

We are pleased to share with you our briefing covering the key trends that have emerged during the first year of the UK's new investment screening regime introduced by the National Security and Investment Act 2021 ("NSIA").

The NSIA came into full force on 4 January 2022. This wide-ranging, ambitious legislation has sought to chart a narrow, precarious course. On the one hand, the UK Government – reflecting the attitudes of many Western countries, which have similarly augmented their own investment screening regimes in recent years – has become (and is) increasingly wary of the potential for investment activity to pose a threat to its national security interests. It was widely felt that the UK's previous mechanism for catching potentially risky deals had become, if not obsolete, then at least insufficiently broad in scope to capture the many new industry sectors and technologies that increasingly play a crucial role in an economic, military and/or democratic context. Thus, the NSIA regime has been intentionally constructed so as to capture a much broader array of transactions, reflecting the fact that present day national security concerns have become both more diverse and more nuanced, and are constantly evolving. On the other hand, whilst this need for change was clear, the UK Government did not want to cause a flight in capital from UK shores by deterring future UK and non-UK investors.

In this briefing, we assess how successfully the UK Government has navigated these muddied waters. We also explore the most salient learnings to take away from the NSIA regime's first year in operation.

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