National Security and Investment Bill - what you need to know

November 2020

The recent reversal of plans to allow Chinese telecoms equipment maker Huawei to supply kit for Britain’s 5G mobile phone networks has highlighted the increased significance both in the UK and globally of national security concerns in commercial transactions. That trend continued last week when the UK government published its draft National Security and Investment Bill, which will be considered at a second reading in the House of Commons today.

The bill will introduce a mandatory foreign direct investment (FDI) notification regime for transactions to protect national security in certain sectors. Clients in these sectors should be aware of this as the powers to call in transactions for review will come into effect when it is introduced this week, rather than when the law is passed.

Many countries across the globe are seeking to introduce and improve these types of regimes and the UK version will allow for more flexibility for the government to consider any potentially sensitive investments, rather than just those of a certain size.

Here’s a quick run down of the key points:

  • Mandatory notification requirement for transactions involving national security in certain sectors including;
    • defence, transport, energy, artificial intelligence, computing hardware, quantum technologies, communications, civil nuclear and space technologies
  • Transactions can be reviewed in any of these sectors for up to five years after closing
  • There will be no minimum turnover or market share thresholds
  • It will apply to investments/acquisitions by investors from any country
  • Both share and asset transactions (including intellectual property) will be within scope
  • Transactions will not be permitted to close pending a clearance decision
  • Government can prohibit a transaction (or make changes) to protect national security
  • It may impact a large number of transactions, estimated at up to 200 investigations a year

If you would like more information and updates on this bill (including the full list of sectors open to consultation), please get in touch via email ( or view the government information page here:

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