National Security and Investment Bill

Written evidence submitted by Dentons UK and Middle East LLP (NSIB01)

National Security & Investment Bill 2020

Dear Sir or Madam

I am a Partner and Head of Competition at Dentons UK and Middle East LLP. Dentons is the world's largest law firm, with offices in 190 locations in 77 countries. My colleagues and I regularly advise clients on foreign direct investment (FDI) control. We are grateful for the opportunity to comment on the Bill.

My key concern in relation to the Bill is the proposed ability of the Secretary of State to ''call-in'' for scrutiny any transaction involving a "trigger event" which takes place (i.e. completes) on or after 12 November 2020 – the day on which the Bill was published (see in particular Clauses 2(4) and 12) . This means that transactions which were negotiated and signed well before the Bill was first published, and which have not therefore been structured to address such potential review and scrutiny (e.g. because of the absence of any appropriate conditions to completion), could nevertheless be subject to – in effect – retrospective scrutiny and challenge. This issue is exacerbated by the broadening of the scope of the proposed mandatory notification sectors, as compared with the lists included in previous consultations (e.g. the lower threshold for transactions involving electricity generation). Moreover, the details of those sectors, and of the activities within them, are of course the subject of an ongoing consultation until early January, so have yet to be finalised, meaning that one cannot at this stage be definitive about what activities and sectors will be subject to review under the Bill.

I, my colleagues and many of our clients view this proposal with great concern. I understand that other ''five eyes'' jurisdictions, such as Australia and New Zealand, have exempted from their recently revised FDI legislation transactions which were signed, but not yet completed, before the date when their legislation was first presented to their Parliaments. We consider that this would be a greatly preferable approach for the UK to follow – more consistent with legal certainty, the rule of law and being ''open for business''. I therefore urge the Committee to propose appropriate amendments to the Bill.

Yours faithfully

Adrian Magnus

November 2020

 

Prepared 1st December 2020