Key Facts

• Clause 12 is discussed in relation to the National Security and Investment Bill.
• The amendment seeks to expand the definition of trigger events under the bill.
• The amendment proposes including arrangements in progress or contemplation as potential trigger events.
• Amendment 16 seeks to expand the scope of trigger events in Clause 12.
• It would give the Secretary of State power to call in potential future trigger events.
• The amendment would require all minor transactions that may lead to a trigger event to be notified.
• The amendment aims to address disguised transactions that can start with low shareholdings but set the ground for future increases in influence.
• According to the Government's impact assessment, 80% of mandatory notification base will be made up of small and medium-sized enterprises (SMEs).
• Expert evidence from Sir Richard Dearlove highlights the sophistication of other actors, such as China, which may game the new regime.
• The Secretary of State’s power to call in trigger events has a five-year limit after the event and six months from awareness.
• Amendment 16 aims to clarify when agreements or arrangements are deemed as trigger events in progress or contemplation.
• Conditional acquisitions may have low likelihood of actual occurrence due to stipulated conditions.
• The amendment could lead to a significant increase in potential trigger events.
• There are concerns about the Secretary of State's resources to handle an expanded scope of cases.
• Chi Onwurah's amendment aims to address gaming by hostile actors.
• Amendment 17 mandates the Secretary of State to publish guidance on the impact of void notifiable acquisitions.
• The guidance must cover considerations regarding consequential obligations, liabilities, and rights in completed events.
• It specifies who constitutes a 'materially affected' person under Clause 16(1).
• The informational and evidential standards for completion 'in accordance with the final order' at subsection (3) are outlined.
• The UK attracts more foreign investment than any EU country.
• The clause places significant demands on the Department for Business, Energy and Industrial Strategy's investment security unit.
• Experts like Dr Ashley Lenihan from LSE support clear regulatory guidance.
• The Google acquisition of DeepMind in 2014 is cited as an example to illustrate uncertainties.
• Clause 13 sets out mechanisms for approving notifiable acquisitions in 17 sensitive sectors of the economy.
• Acquisitions without Secretary of State’s approval are void and have no legal effect.
• France, Germany, and Italy have similar voiding provisions in their investment screening regimes.
• The Government will consult on sector definitions to refine them before finalizing.
• The Bill sets out ways to retrospectively validate acquisitions.
• Guidance would be an invitation to effectively legislate through guidance, which is inappropriate according to Parliament's role.
• Voiding is a logical result of mandatory notification requirements.
• The amendments seek to change “may” to “shall” in clauses 14 and 18.
• Small businesses face challenges with uncertain timelines and form requirements under the new regime.
• Changing 'may' to 'shall' would require the Secretary of State to act, reducing uncertainty for SMEs.
• Michael Leiter testified about the seismic shift in UK's approach to review of investment.
• The number of call-ins could rise from 12 to 1,800.
• The Minister assured on Second Reading that BEIS would ensure clear guidance is available for all businesses.
• The phrase “as soon as reasonably practicable” is criticised for its open-ended nature.
• The rest of the Bill includes specific time limits to prevent delays in transactions.
• Uncertainty exists for businesses if regulations are not made by the Secretary of State.