At present, the Bill includes intragroup reorganisations in the mandatory notification regime if the entity being transferred within a corporate group carries on activities in one of the 17 specified sectors. We could not believe this at first (how could an internal restructuring within a single group of companies which, by definition, does not involve any change of control of that group of companies, possibly be a national security risk?). So we wrote to BEIS and the BEIS officials confirmed that our interpretation of the Bill is correct.

If mandatory notifications are not made, under the Bill, those who should have made the notification will have their internal transactions automatically voided and will be exposed to fines of up to 5% of their worldwide turnover with their people being at risk of being imprisoned for up to five years.

Hundreds of intragroup restructurings take place every day for a range of purposes (e.g. reducing costs, incorporating new technology and consolidating debt etc.) and we cannot believe that Parliament intended to include such arrangements within the scope of the Bill’s mandatory notification regime. There are already concerns that the ISU will be flooded with notifications once the mandatory notification system goes live. It is imperative that intragroup reorganisations are removed from the mandatory notification system to help stem a huge flow of utterly benign transactions from a national security perspective being notified

In our view, internal restructurings which do not involve a change of control should be removed from the ambit of the Bill altogether. However, if it is too late for this, the Government must at least amend the Bill so that such transactions are not mandatorily notifiable. Our drafting amendment to achieve this is set out below:

Proposed Amendment to Section 6(3) of the Bill

But a notifiable acquisition does not take place if the acquisition takes place due to a person being treated as acquiring an interest or right under section 10(2)(b) or if complying with the requirement to give a mandatory notice under section 14(1) in relation to the gaining of control, or the acquisition of the right or interest, would be impossible for the person within subsection (2).


Samantha Mobley is a partner in the EU, Competition & Trade Practice of Baker & McKenzie’s London office and a member of the London office Management Committee. She headed Baker McKenzie’s Global Antitrust and Competition Group, a team of over 300 competition and antitrust specialists worldwide for six years. Samantha has significant experience of advising on the implications of foreign direct investment rules for cross-border transactions. She has advised a number of companies on the implication of the reduced UK national security thresholds, as well as coordinating the global foreign investment review aspects of a proposed $12 billion joint venture between a FTSE100 company and a Fortune 500 corporate. Samantha is a Who’s Who Legal 2020 Leading Individual for Foreign Investment Review.


Sunny Mann is a Partner and leads the EMEA and UK International Trade team, ranked Tier 1 by Legal 500. His practice includes a focus on national security, foreign investment, export controls and trade sanctions matters. He has worked on a number of foreign investment review cases, including obtaining clearance for a high profile acquisition triggering potential defence and national security concerns, one of the very few cases to go through a full UK statutory review. In the Legal 500, Sunny is ranked as a "Leading Practitioner".