The UK Government has tabled an amendment to the National Security and Investment Bill (NSIB), which would reduce the number of transactions that are required to be mandatorily notified. The Secretary of State for Business, Energy & Industrial Strategy (BEIS), Kwasi Kwarteng, is behind the amendment in response to pressure from the business community, according to a report in The Sunday Times. The amendment would see the percentage threshold, at which businesses must notify the…
We continue to have significant concerns regarding the inclusion of intragroup transactions within the current scope of the NSIB. We consider that standalone internal restructurings which do not involve a change of control, i.e., which are not connected to a separate third party transaction, should be removed from the ambit of the Bill altogether as they do not raise a national security risk. Having reviewed the transcripts from the Committee stage reading of the Bill,…
On 26 February 2021, the UK parliamentary International Relations and Defence Committee (a House of Lords Select Committee) launched an inquiry into the UK’s security and trade relationship with China. The inquiry will consider the UK Government’s relationship with China, including the latter’s significance as a trade partner and source of investment for the UK. It will also examine the UK’s security interests vis-à-vis China as well as evaluating how UK policy towards China has…
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…
Last week on 24 February, Baker McKenzie was delighted to sponsor the annual M&A Practitioners’ Summit, hosted by City & Financial Global. Featuring a wide range of speakers from regulators, public bodies, industry and private practice, the virtual summit addressed recent key regulatory, legal and market developments impacting transactional practice. Inevitably, the National Security and Investment Bill (“Bill”) featured highly on the topics of discussion. As covered in previous blog posts (here), the Bill will…
In a Report on Foreign Involvement in the Defence Supply Chain published on 14 February 2021, the UK Defence Committee has made a number of points and recommendations regarding the perceived vulnerability of the UK’s defence supply chain. While recognising that the UK’s broad range of domestic and international suppliers has brought benefits to its defence industry and wider economy, the Report considers that stronger safeguards around foreign investment are required. It criticises the Ministry…
On 1 February, one year after leaving the EU, the UK submitted a formal request to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). The original Trans-Pacific Partnership (TPP) was agreed in principle in October 2015, attracting significant attention as a model for future Free Trade Agreements (FTAs). In January 2017 the newly elected Trump administration announced its withdrawal from the TPP, leaving the remaining 11 countries to agree the revised CPTPP in October 2018,…
On 20 January 2021 the UK Secretary of State for International Trade, Liz Truss, announced that the UK intended to formally submit its application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”). The CPTPP is a multilateral free trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Discussions have been ongoing between the CPTPP members and the UK on the UK’s potential accession since 17…
The UK Government launched a Consultation on its new UK National Security and Investment Bill, and specifically the definition of the sectors where investments would trigger a mandatory notification. This Consultation closed on 6 January. Baker McKenzie welcomes the opportunity and responded to the Consultation. We have identified a number of key issues that merit consideration: A legal definition of “national security” to help businesses to understand whether a transaction raises genuine concerns.Significant tightening and…
On 30 December 2020, the EU and China reached an agreement “in principle” for a new EU-China Comprehensive Agreement on Investment (“CAI”) (see our previous update here). The CAI concludes seven years of investment negotiations, that begun in October 2013, and is expected to come into force later this year. In its press release (see here), the EU stated that the CAI was the “most ambitious agreement that China has ever concluded with a third…