London, Nov 11 (PTI) UK Business Secretary Alok Sharma on Wednesday warned that “hostile actors' will have no back door into Britain as he tabled a new Bill in Parliament, which aims to tackle hostile takeovers from foreign organisations.
The Department for Business, Energy and Industrial Strategy (BEIS) said the new National Security and Investment Bill will strengthen the UK’s ability to investigate and intervene in mergers, acquisitions and other types of deals that could threaten national security.
Investors and businesses will have to tell the government about proposed deals in a number of sensitive sectors, such as defence and artificial intelligence (AI), and screening powers will be extended to include assets and intellectual property as well as companies.
“The UK remains one of the most attractive investment destinations in the world and we want to keep it that way. But hostile actors should be in no doubt – there is no back door into the UK,” said Sharma.
“This Bill will mean that we can continue to welcome job-creating investment to our shores, while shutting out those who could threaten the safety of the British people,” the Indian-origin minister said.
The proposed law is intended to update the UK’s current powers, which BEIS said are almost 20 years old.
It will mean that no deal which could threaten the 'safety of the British people' goes unchecked, and will ensure vulnerable businesses are not successfully targeted by potential investors seeking to cause them harm.
Investments will also be screened much more quickly than the current regime, assessing transactions within 30 working days – and often faster – with timelines set out in law rather than by the government on a case-by-case basis as is currently the case, the BEIS said.
“The new regime will apply to investors from any country, but will remain targeted and proportionate, so most transactions will be cleared without any intervention and foreign direct investment projects can continue to boost jobs and stimulate the economy across the UK, while ensuring the UK remains an attractive place to invest,” the BEIS said.
The screening system, the government claims, will be made “slicker and quicker” for investors, providing certainty and transparency.
Under the Bill, investors and businesses will have to notify a dedicated government unit through a “single digital portal” about certain types of transactions in designated sensitive sectors, such as defence, energy and transport sectors, to ensure it can investigate and take action to address any national security risks.
The latest move follows UK Prime Minister Boris Johnson's announcement earlier this week of the creation of the Office for Investment (OFI), a new unit tasked to land high value investment opportunities in infrastructure, clean technologies and research and development.
Alongside, the Investment Security Unit will sit within the BEIS and provide a single point of contact for businesses wishing to understand the new Bill and notify the government about transactions.
The unit will also coordinate cross-government activity to identify, assess and respond to national security risks arising through market activity.
“It’s vital that the UK continues to be an attractive destination for foreign investment and these measures will help to give much needed certainty and transparency to investors and businesses,” said Kevin Ellis, Chairman of PricewaterhouseCoopers, a leading multinational professional services network.
'While we shouldn’t underestimate the UK’s attractiveness for investment, competition for FDI is getting much fiercer. Across all industries and markets the bar is being raised and we can’t rely on existing skills, historical relationships or legacy perceptions to drive future success. Now more than ever we need to make it easier for that investment to materialise,” he said.
The BEIS pointed out that the vast majority of transactions will require no intervention and will be able to proceed quickly and with certainty in the knowledge that the government will not revisit a transaction once cleared unless inaccurate information was provided. PTI AK IND