Insights

Washington, D.C. – July 17, 2023: Crowell & Moring hosted its 24thannual George Bailey Public Service Awards ceremony. Named after the hero of the classic movie, “It’s a Wonderful Life,” these awards recognize the firm’s lawyers and staff who have made a substantial impact on the lives of others.

The U.K.’s new national security regime under the National Security and Investment Act (the “NSI Act”) officially commenced on 4 January 2022. While the U.K. government can review any transactions which completed on or after 12 November 2020 (using its “call-in power”), the mandatory notification requirement only applies to transactions that sign on or after 4 January 2022. Notifications under the NSI Act can now be submitted electronically, using a template notification form.

The U.K.’s National Security and Investment Bill was enacted into law as the National Security and Investment Act (the “NSI Act”) on 29 April 2021, with the new regime expected to come into force towards the end of this year. Over the coming months the U.K. government is to enact secondary legislation and provide further detail and guidance on the framework created by the NSI Act, including guidance on the regime’s extraterritorial scope and finalised definitions of the 17 sensitive sectors.

To date, the U.K. government has rarely used its power to intervene in M&A deals on the grounds of public interest, with only 12 transactions having been reviewed since 2013. This may be about to change. The National Security and Investment Bill (the Bill) if enacted would substantially reform the U.K.’s foreign investment rules, introducing a hybrid system of mandatory and voluntary notifications on grounds of national security similar to reviews by the Committee on Foreign Investment in the U.S. (CFIUS). The Bill, likely to become law in early 2021, is projected to lead to the notification of potentially 2,000 transactions per year. Critically, transactions completed on or after 12 November 2020 may be retroactively reviewed by the U.K. government once the Bill is passed into law.