Key Facts

• The National Security and Investment Bill addresses alignment with allies on national security and investment screening.
• Dr Lenihan highlights the importance of institutional capacity and multi-agency review bodies in regimes such as CFIUS in the US.
• Examples include Treasury or business/trade ministries leading these reviews, involving multiple agencies for comprehensive monitoring.
• The Bill covers trigger events initiated by both domestic and foreign investors, unlike most Western FDI review regimes.
• The volume of mandatory notifications is expected to be much higher than in other countries like the US, Germany, Australia.
• Dr Lenihan has analyzed over 200 cases of investment across seven years in various countries including the US, UK, Europe, China and Russia.
• The US system is considered institutionalized and effective.
• Germany regularly updates its regulations and coordinates well with other states.
• Canada and Australia include national interest in their reviews, affecting foreign direct investment clarity.
• France's review mechanism is good at catching potential threats to national security.
• Japan has a restrictive inward investment regime tied to broader economic policies.
• National Security is defined as maintaining state survival and autonomy within the international system.
• No foreign direct investment regime defines national security in law.
• OECD recommends regulations to increase transparency around risks without defining national security.
• Social media concerns relate to data retention.
• The Bill sets up a new review regime in BEIS.
• Michael Leiter heads the national security practice at Skadden Arps.
• Up to 1,830 notifications might come in each year under the new regime.
• The Bill projects an increase of over 1,000 matters from historically few.
• In the US, there was only a one-third increase in short-form declarations under FIRRMA.
• CFIUS reviews approximately 240 full cases and another 100 short-form declarations annually in the US.
• The Bill covers investments from both inside and outside the UK, which Leiter considers potentially unwise.
• Leiter advises starting narrowly and then opening up the aperture as necessary.
• The UK needs to develop administrative capabilities to handle the volume within the Government.
• Collaboration between the security sector, private legal bar, and commercial sector is essential.
• Clear rules about limited partners in private equity funds are crucial.
• The Bill provides a five-year retrospective look-back period with six months for the Secretary of State to act.
• There is a potential timeline of up to 75 days or more for actions under the Bill.
• Smaller-scale, early-stage venture investments may face challenges due to longer review periods.
• In the US, foreign limited partners in US private equity are not considered by CFIUS.
• A foreign Government-controlled entity investing more than 25% equity in a TID business is a mandatory filing under US regulations.
• There is no de minimis threshold in the UK Bill for state-controlled entities or private equity investments.
• Graham Brady is chairing a session on the National Security and Investment Bill.
• The session involves discussions about enforcement and monitoring of national security protections in foreign investments.
• David Petrie from the Institute of Chartered Accountants in England and Wales provides expertise on mergers and acquisitions.
• The Bill includes mandatory sectors that require notification to the investment security unit.
• Critical infrastructure has commercial protections and backup systems in place.
• There are concerns about the impact of the five-year retrospectivity, six-month call-in period, and 75-day review process on potential investors.
• It is estimated there will be over 1,800 notifications annually.
• The new investment security unit will need to handle between £3.7 million and £10.4 million annually.
• Of approximately 1,000 mandatory notifications, only 70 to 95 are expected to be called in for further review by the Secretary of State.
• The Bill includes provision for an annual report on transactions called in and their sectors.
• Assets such as land and buildings near sensitive military installations are included within the Bill's scope.
• Intangible assets like patents, industrial designs, blueprints, and chemical processes may also be subject to review under the legislation.
• The new investment security unit will need to work across Government Departments and be well-resourced to handle cases efficiently.
• Chris Cummings is the chief executive of the Investment Association representing £8.5 trillion in assets used by three quarters of UK households.
• The Investment Association owns roughly a third of the FTSE.
• The National Security and Investment Bill estimates up to 1,830 notifications might come in each year.
• £8.5 trillion managed by Cummings' members, with 80% to 85% from institutional investors.
• Cummings' members are patient long-term investors looking for high-performing companies over a long period of time.
• Legal certainty and publicly available information are crucial for investment decisions.
• A five-year review period is important for maintaining clarity in the rules of the game.
• The Japanese definition of investor exclusion is attractive to Cummings.
• The legislation is similar to policies seen in other developed markets such as the US, Germany, and France.
• The UK has started on a larger scale compared to jurisdictions like the US which began with smaller legislation.
• The Bill includes definitions of 17 sectors that need clarity and specificity.
• Investors require clear understanding and legal protection for intellectual property.
• Pre-authorisation processes within 30 days are highlighted as crucial for investor confidence.
• The UK is the largest investment centre in Europe, larger than the next two or three combined.
• Japan recently considered similar legislation for investments and came up with an approach to exclude activities of investors and insurance companies based on intentionality.
• Other jurisdictions like the US, Germany, and France also have approaches that align with the suggested model.
• Graham Brady感谢Chris Cummings的证词时间。
• 讨论会结束。