To ask Her Majesty's Government whether they have defined what asset transactions should be referred to the Secretary of State for Business, Energy and Industrial Strategy under the proposed rules in the National Security and Investment Bill; whether they intend to exclude any such transactions from those rules; and if so, which transactions they intend to exclude.
22 February 2021
As part of the proposed National Security and Investment regime, my Rt. Hon. Friend the Secretary of State will be able to call-in acquisitions of control over qualifying assets to scrutinise them for potential national security concerns. Before any acquisitions can be called-in, the Secretary of State must publish a Statement setting out how they expect to use this call-in power. The Government expects parties will use this Statement to help decide whether to voluntarily notify both entity and asset acquisitions to the Secretary of State.
A draft of the Statement was published alongside the introduction of the Bill on 11 November 2020. It explains that certain areas of the economy are expected to be the areas most likely to give rise to national security risks. That includes acquisitions of control over assets that are integral to the relevant activities of the entities within those sectors.
This will ensure that parties are unable to simply circumvent the regime by acquiring sensitive assets rather than the entities that own these assets. The Secretary of State does, however, expect to intervene in such acquisitions exceedingly rarely.
Clause 11 of the Bill provides the Secretary of State with the power to amend the types of asset acquisitions of control that fall within scope of this regime through secondary legislation. The Secretary of State will keep the functioning of this regime under review and will consider over time whether any further exemptions are appropriate. Any use of this power would be guided by the operation of the regime in practice and any patterns of activity that are observed.