The National Law Review on 23rd March provided a comprehensive report on changes to the UK Government’s ability to scrutinise the national security implications of foreign investment in cutting edge technology sectors – saying that the main change is that the Government will be able to scrutinise transactions in those industries where the target’s UK turnover is £1 million or more. For these industries, this is a significant change to the current turnover threshold of £70 million. It points out that the changes proposed would affect 3 sectors –
- the development or production of items for military or military and civilian use (known as “dual use”, examples of which might be drones or seabed mapping);
- the design and maintenance of aspects of computing hardware; and
- the development and production of quantum technology. It includes research, development, design, manufacture and the supply of services in those sectors.
These 3 areas are to be defined through an amendment to the definition of a “relevant enterprise”, pursuant to a new section 23A to the Enterprise Act 2002. The “military and dual use” sector will be defined as enterprises involved in the development and production of “restricted goods”, as defined in the “relevant export control legislation” – Schedules 2 and 3 to the Export Control Order 2008; the Schedule to the Export of Radioactive Sources (Control) Order 2006; and Annex I to Council Regulation (EC) No. 428/2009 (which is concerned with export control of dual-use items).