New rules that will make it harder for foreign firms to buy British businesses considered key to national security have come into force.
The National Security and Investment Act is said to be the biggest shake-up of the UK’s national security regime for 20 years and will allow ministers to more closely scrutinise approaches by overseas interests.
It means the Government will also be able to impose certain conditions on a takeover or block it – although ministers were keen to stress this will happen rarely.
Business Secretary Kwasi Kwarteng said: “The UK is world-renowned as an attractive place to invest but we have always been clear that we will not hesitate to step in where necessary to protect our national security.
“The new investment screening process in place from today is simple and quick, giving investors and firms the certainty they need to do business, and giving everyone in the UK the peace of mind that their security remains our number one priority.”
Ministers will also be able to unwind deals that have already taken place if false or misleading information was provided.
Foreign investors and businesses will have to notify the Government if they plan to buy any part of a UK business across 17 sensitive areas of the economy that could threaten national security, including artificial intelligence and nuclear energy services.
Plans for the new rules were first unveiled in November with Mr Kwarteng setting out the risk factors he will take into account.
It will be enacted retrospectively to any deals made since November 12 2020 and has already been cited by the Government over deals in the defence sector announced early last year.
Any deals scrutinised under the Enterprise Act 2002 and current investigations under the same act will continue under the previous rules and will not face investigations under the new legislation.