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NSIA
NSIA
NSIA was granted Royal Assent on 29 April 2021, and its key provisions came into force on 4 January 2022. The long title to NSIA states that it is ‘[a]n Act to make provision for the making of orders in connection with national security risk arising from the acquisition of control over certain types of entities and assets; and for connected purposes’.
Section 1 of NSIA provides in part:
‘1 Call-in notice for national security purposes
The Secretary of State may give a notice if the Secretary of State reasonably suspects that –
a trigger event has taken place in relation to a qualifying entity or qualifying asset, and the event has given rise to or may give rise to a risk to national security …
A notice under subsection (1) is referred to in this Act as a call-in notice.
If the Secretary of State decides to give a call-in notice, the notice must be given to –
the acquirer,
if the trigger event relates to a qualifying entity, the entity, and
such other persons as the Secretary of State considers appropriate.
The call-in notice must include a description of the trigger event to which it relates and state the names of the persons to whom the notice is given.
…’
Section 2 of NSIA makes ‘Further provision about call-in notices’. It provides, so far as relevant:
‘(1) No more than one call-in notice may be given in relation to each trigger event.
Subject to subsections (3) and (4), a call-in notice given on the grounds mentioned in section 1(1)(a)-
may not be given after the end of the period of 6 months beginning with the day on which the Secretary of State became aware of the trigger event, and
may not be given after the end of the period of 5 years beginning with the day on which the trigger event took place.
…
In relation to a trigger event taking place during the period beginning with 12 November 2020 and ending with the day before commencement day, a call-in notice given on the grounds mentioned in section 1(1)(a)-
if the Secretary of State became aware of the trigger event before commencement day, may not be given after the end of the period of 6 months beginning with commencement day,
if the Secretary of State became aware of the trigger event on or after commencement day –
may not be given after the end of the period of 6 months beginning with the day on which the Secretary of State became aware of the trigger event, and
may not be given after the end of the period of 5 years beginning with commencement day.
In this section “commencement day” means [4 January 2022].’
Chapter 2 of NSIA sets out provisions in relation to its interpretation. Section 5 of NSIA provides in part:
‘Meaning of “trigger event” and “acquirer”
For the purposes of this Act, a “trigger event” takes place when-
a person gains control of a qualifying entity, as set out in section 8,
…
In this Act “acquirer” means the person who gains the control referred to in subsection (1) …’
Section 7 of NSIA defines a ‘qualifying entity’ for the purposes of the Act. It provides, in part:
‘(2) A “qualifying entity” is … any entity, whether or not a legal person, that is not an individual, and includes a company, a limited liability partnership, any other body corporate, a partnership, an unincorporated association and a trust.
…’
Section 8 of NSIA defines what is meant by the gaining of control of a qualifying entity. It provides in part:
‘(1) For the purposes of this Act, a person gains control of a qualifying entity if the person acquires a right or interest in, or in relation to, the entity and as a result one or more of the cases described in this section arises.
The first case is where the percentage of the shares that the person holds in the entity increases –
from 25% or less to more than 25%,
from 50% or less to more than 50%, or
from less than 75% to 75% or more.
In subsection (2), the reference to holding a percentage of shares is –
in the case of an entity that has a share capital, to holding shares comprised in the issued share capital of the entity of a nominal value (in aggregate) of that percentage of the share capital …’
Chapter 4 of the Act deals with ‘Procedure’. Amongst others, it contains, in section 19, provisions as to the Secretary of State’s power to require information. That section provides in part:
‘(1) The Secretary of State may give a notice to a person … to require the person to provide any information in relation to the exercise of the Secretary of State’s functions under this Act which –
is specified or described in the notice, or falls within a category of information specified or described in the notice, and
is within that person’s possession or power.
The Secretary of State is not to require the provision of information under this section except where the requirement to provide information is proportionate to the use to which the information is to be put in the carrying out of the Secretary of State’s functions under this Act.
A notice under subsection (1) is referred to in this Act as an information notice.
…’
Section 23 of NSIA defines ‘assessment period’ in relation to a call-in notice. It provides in part:
‘(2) The assessment period begins with the day on which the call-in notice is given to the acquirer.
In this section-
“the initial period” is the period of 30 working days beginning with the day mentioned in subjection (2),
“the additional period" is the period of 45 working days beginning with the first working day after the day on which the initial period ends,
a “voluntary period” is such period of working days, beginning with the first working day after the day on which the additional period (or the previous voluntary period) ends, as may be agreed in writing between the Secretary of State and the acquirer.
The assessment period ends at the end of the initial period unless, before the end of the initial period, the Secretary of State gives an additional period notice to each person to whom the call-in notice was given …
If an additional period notice is given, the assessment period ends at the end of the additional period unless, before the end of the additional period, a voluntary period is agreed.
If a voluntary period is agreed, the assessment period ends at the end of the voluntary period, or at the end of any further voluntary period which is agreed.
…’
Section 26 of NSIA makes provision for final orders. It provides in part:
‘(1) The Secretary of State must, before the end of the assessment period in relation to a call-in notice –
make a final order, or
give a final notification to each person to whom the call-in notice was given.
In this section –
a “final notification" is a notification that no further action in relation to the call-in notice is to be taken under this Act,
a “final order” is an order under subsection (3).
The Secretary of State may, during the assessment period, make a final order if the Secretary of State –
is satisfied, on the balance of probabilities, that –
a trigger event has taken place …, and
a risk to national security has arisen from the trigger event …, and
reasonably considers that the provisions of the order are necessary and proportionate for the purpose of preventing, remedying or mitigating the risk.
Before making a final order the Secretary of State must consider any representations made to the Secretary of State.
A final order may include –
provision requiring a person, or description of person, to do, or not to do, particular things,
provision for the appointment of a person to conduct or supervise the conduct of activities on such terms and with such powers as may be specified or described in the order,
provision requiring a person, or description of person, not to disclose the contents of the order except to the extent specified in the order,
consequential, supplementary or incidental provision.’
Supplementary provisions in relation to orders under the NSIA are stated in section 28. It provides in part:
‘(4) Subject to subsection (5), each order … or explanatory material accompanying the order must –
state the date on which the order … comes into force or how that date is to be determined,
state each person, or description of person, who is required to comply with the order,
describe the trigger event and entity or asset concerned,
state the reasons for making or varying the order,
state the possible consequences of not complying with the order,
provide information about –
how to apply to the Secretary of State for an order to be varied or revoked, and
the procedure for judicial review …
The Secretary of State may exclude from the copy of an order served on any person within subsection (2), or from any explanatory material accompanying the order, anything the disclosure of which the Secretary of State considers -
would be likely to prejudice the commercial interest of any person, or
would be contrary to the interest of national security.’
Under section 33 of NSIA it is provided that a person commits an offence if, without reasonable excuse that person fails to comply with a requirement to which that person is subject under an order under the Act. Under section 39, on conviction on indictment, a person may be imprisoned for up to five years for an offence under section 33. By sections 40-41 the Secretary of State is given the power to impose monetary penalties for the commission of an offence under section 33, which may be for the higher of 5% of the total value of the turnover of the business and £10 million.
Section 49 of NSIA lays down the procedure for judicial review of certain decisions under the Act, including under Part 2 of the Act (which includes section 26). Under subsection (4) it is provided:
‘(4) The court may entertain proceedings for a claim to which this section applies only if the claim form is filed before the end of the period of 28 days beginning with the day after the day on which the grounds to make the claim first arose, unless the court considers that exceptional circumstances apply.’
Section 53 of NSIA empowers the Secretary of State to make provision by regulation for the procedure to be followed when a provision of the Act requires or allows a document to be given or served, and in particular ‘(a) as to the manner in which a document must be given or served, (b) as to the address to which a document must be sent, (c) requiring, or allowing, a document to be sent electronically, (d) for treating a document as having been given, received or served on a date or at a time determined in accordance with the regulations…’
Under section 65 of NSIA, and as a consequence of the Secretaries of State for Energy Security and Net Zero, for Science, Innovation and Technology, for Business and Trade, and for Culture, Media and Sport and the Transfer of Functions (National Security and Investment Act 2021 etc) Order 2023/424, ‘Secretary of State’ is defined as including the CDL.
Regulations made under NSIA include The National Security and Investment Act 2021 (Procedure for Service) Regulations 2021 (SI 2021/1267) (‘the Service Regulations’). By Reg. 3 it is provided that:
‘3. Service of documents by the Secretary of State
A document required or allowed by the Act to be given to a person by the Secretary of State must be given –
by sending it by email to that person’s email address (or the email address of their representative), as provided for in regulation 4, or
…
A document sent by email in accordance with paragraph (1)(a) is to be treated as having been given immediately after it is sent.
…
When giving a document under this regulation, the Secretary of State must mark it as being for the attention of the person to whom it is required or allowed to be given under the Act.
Where the person referred to in paragraph (5) is a body corporate or unincorporate, the document being given to that person must additionally be marked as being for the attention of an officer or member of that body (as the case may be) whom the Secretary of State considers to be appropriate.’
Reg. 4 provides:
‘4. Address for service by email under regulation 3(1)(a)
For the purposes of regulation 3(1)(a), a person’s email address (or the email address of their representative) is the email address provided by that person to the Secretary of State in connection with the giving of documents under the Act.
Where an email address as referred to in paragraph (1) has not been provided, a person’s email address is –
in the case of an individual, an email address published for the time being by that person as an email address for contacting that person, or
in the case of a body corporate or unincorporate, the general email address published for the time being by that body.
Where an email address as referred to in paragraphs (1) and (2) has not been provided or published (as the case may be), or if the Secretary of State has reason to believe that such an address is unsuitable or inadequate, a person’s email address is any email address by means of which the Secretary of State reasonably believes that the document will come to the attention of that person (or their representative).’