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The National Security and Investment Act 2021 came into force on
4 January 2022. BEIS has published its first
annual report, which has been made a statutory requirement by s 61
of the Act on 16 June 2022. It covers transaction
notifications during the period of 4 January – 31
March 2022 and how they have been dealt with. Subsequent
annual reports will cover the period 1 April – 31
March. Below are some key statistics from the report:
Number of notifications
- There have been 222 notifications, 196 of which were mandatory
notifications and 25 voluntary. There was only 1 retrospective
validation application received. Notifications received covered all
Notifications Accepted and Rejected
- 178 mandatory notifications were accepted; 22 voluntary
notifications were accepted. The 1 retrospective validation
application was also accepted.
- 7 mandatory notifications were rejected; 1 voluntary
notification was rejected.
Timescale for processing
- The average time for a mandatory notification to have been
accepted was 3 days
- The average time to reject an application was 5 days for
mandatory notifications and 12 days for voluntary
- 13 mandatory and 4 voluntary notifications called-in for
further investigation. All decisions to call in these notifications
took place within the statutory 30-day period, but ranged between
22-24 days on average.
Penalties, Sanctions and Final Orders
- As of yet, the report showed that there have not been any
penalties or criminal sanctions imposed.
- No final orders, which imposes conditions to mitigate national
security risks, have been issued.
The majority of mandatory applications were made in respect of
the Defence and Military / Dual Use sectors, whilst most voluntary
notifications were made in respect of professional, scientific and
technical activities and data infrastructure.
All notifications and subsequent processing were kept within
The statistics provided have only covered the first three months
of the new notification regime. The report acknowledges that the
number of notifications was lowers than was expected for the
three-month period; however, it acknowledges that this is in part
due to the lower number of mergers and acquisitions following the
pandemic. Whilst the statistics seem to suggest a positive start to
the regime, we hope to see more the number of notifications rise in
the next annual report.
Although the report mentioned that all notifications and
application processing were kept within statutory timescales, it
seems that notifications being made should be substantively checked
before submission. Most mandatory applications that were rejected
were so rejected because they should have been submitted as
voluntary applications. As such, perhaps the next annual report
will have an increased number of voluntary applications, the
processing timescale for which seems to be only slightly longer
than that for mandatory notifications.
Businesses can expect “Market Guidance Notes” from the
Government in due course, which aim to give practical advice about
the NSI notification system.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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