How-to guide: Understanding the National Security and Investment Act 2021 (UK)

Introduction

This guide will assist in-house counsel and private practice lawyers to understand the scope of application of the National Security and Investment Act 2021 (NSIA), the powers that the UK government has to scrutinise and intervene in certain business acquisitions to protect national security and the circumstances in which notification of this is required.

This guide covers:

1. Background and overview
2. Terminology
3. Call-in power
4. Mandatory notification
5. Voluntary notification

This guide can be used in conjunction with the following Checklist: Determining whether to file a National Security and Investment Act 2021 notification and Quick view: National Security and Investment Act 2021 case tracker.

Section 1 – Background and overview

The National Security and Investment Act 2021 came into force on 4 January 2022.

In the introduction to the Act it states that the purpose of the Act is ‘to make provision for the making of orders in connection with national security risks arising from the acquisition of control over certain types of entities and assets; and for connected purposes’.

The purpose of the NSIA is to establish a statutory regime for government scrutiny of, and intervention in, trigger events (as defined in chapter 2 of the NSIA) in order to protect national security. Prior to the introduction of the NSIA, the UK government had limited powers of scrutiny contained in the Enterprise Act 2002 (EA 2002) under which it could examine and intervene in mergers and acquisitions for the purpose of protecting national security. Under the previous regime, the ability of the government to intervene was closely linked to the review of mergers and acquisitions on competition grounds by the Competition and Mergers Authority (CMA). The NSIA replaces the UK government’s previous powers of scrutiny under the EA 2002 and removes the link to the CMA’s review of mergers and acquisitions on competition law grounds (which are now dealt with as a wholly separate matter by the CMA).

In summary, the NSIA provides for:

• the government to ‘call in’ certain transactions for review where national security is deemed to be at risk;
• a mandatory notification requirement for acquisitions of certain shares or voting rights in ‘qualifying entities’ that carry out certain activities in specific areas of the economy;
• a voluntary notification regime for acquisitions that do not fall within the scope of the mandatory notification requirement, but where national security concerns could be raised; and
• the UK secretary of state to impose remedies in the form of an order to prevent, remedy or mitigate any risk to national security that has arisen or might arise from the transaction.

The interaction of the NSIA with other regulators and codes is set out in this guidance.

Section 2 – Terminology

The NSIA uses various terms, which are also used throughout this guide. This terminology is explained below.

2.1 Qualifying entity

Section 7 of the NSIA sets out a wide definition of ‘qualifying entity’ which includes any entity, whether or not a legal person, that is not an individual. It includes a company, a limited liability partnership, any other body corporate, a partnership, an unincorporated association and a trust.

Where an entity is formed under the law of a country or territory outside the UK, it is only a qualifying entity if it:

• carries on activities in the UK (guidance gives the example of an overseas company that does business from a regional office or a research and development facility in the UK); or
• supplies goods or services to persons in the UK.

Government guidance updated in May 2024 provides further information on how the NSIA can apply to cases of outward direct investment.

2.2 Control of a qualifying entity

Pursuant to section 8 of the NSIA, control of a qualifying entity is gained if a person acquires a right or interest in, or in relation to, the entity and as a result one more of the cases described below arises.

1. The percentage of the shares 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 more than 75%.
2. The percentage of the voting rights 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 more than 75%.
3. The acquisition is of voting rights in the entity that, whether alone or together with other voting rights held by the person, enable the person to secure or prevent the passage of any class of resolution governing the affairs of the entity.
4. The acquisition, whether alone or together with other interests or rights held by the person, enables the person materially to influence the policy of the entity.

Pursuant to the NSIA (Section 10 and Schedule 1, paragraph 3), it is possible for an acquisition of control over a qualifying entity to be acquired indirectly, where there is an unbroken chain of majority stakes to an entity of interest. Government guidance ‘Check if you need to tell the government about an acquisition that could harm the UK’s national security’ provides further information and examples.

The Government’s guidance also provides information clarifying what is meant by ‘governing the affairs of the entity’ (in case 3 above), direction on the treatment of certain types of transaction, including internal corporate reorganisations and acquisitions involving parties who are suffering material financial distress, and the acquisition of different types of voting rights.

2.3 Qualifying asset

According to section 7 of the NSIA, a qualifying asset is as follows:

• land;
• tangible moveable property; or
• ideas, information or techniques which have industrial, commercial or other economic value, examples of which include trade secrets, databases, source code, algorithms, formulae, designs, software, plans, drawings and specifications.

If any of the above are outside the UK (or territorial sea) they will be a qualifying asset only if used in connection with:

• activities carried on in the UK (guidance gives the example of an asset such as machinery located overseas used to produce equipment that is used in the UK); or
• the supply of goods or services to persons in the UK.

Government guidance updated in May 2024 provides further information on how the NSIA can apply to cases of outward direct investment.

2.4 Control of a qualifying asset

Pursuant to section 9 of the NSIA, control of a qualifying asset is gained if a person acquires a right or interest in, or in relation to, the asset and, as a result, the person is able:

• to use the asset, or use it to a greater extent than prior to the acquisition; or
• to direct or control how the asset is used, or direct or control how it is used to a greater extent than prior to the acquisition.

This is subject to limited exceptions, see section 11 of the NSIA. As above, Section 10 and Schedule 1, paragraph 3 NSIA provide for particular cases in which a person is to be treated as holding an interest or a right for the purposes of the NSIA.

References above to the use of an asset include its exploitation, alteration, manipulation, disposal or destruction.

2.5 Trigger event

According to section 5 of the NSIA, a trigger event takes place when:

• a person gains control of a qualifying entity; or
• a person gains control of a qualifying asset.

2.6 Notifiable acquisition

Pursuant to section 6 of the NSIA, a notifiable acquisition takes place when a person gains control of a qualifying entity of a specified description in the circumstances described above in section 2.2(1), (2) or (3). Note that acquisition of the ability to exercise material influence as described in (4) falls outside the mandatory notification regime.

The concept of a notifiable acquisition relates to qualifying entities of a specified description. The UK government has defined 17 sensitive areas of the economy where the performance of certain activities by a qualifying entity will mean that there is a need to notify the government. The descriptions of those activities are specified in schedules 1 to 17 of The National Security and Investment Act 2021 (Notifiable Acquisition) (Specification of Qualifying Entities) Regulations 2021 (NARs). These concern certain activities within the 17 areas of the UK economy listed below:

• advanced materials;
• advanced robotics;
• artificial intelligence;
• civil nuclear;
• communications;
• computing hardware;
• critical suppliers to government;
• cryptographic authentication;
• data infrastructure;
• defence;
• energy;
• military and dual-use;
• quantum technologies;
• satellite and space technologies;
• suppliers to the emergency services;
• synthetic biology; and
• transport.

Each of schedules 1 to 17 specifies precisely which activities within these 17 areas would lead to a qualifying entity being of a specified description. Consider these schedules carefully. A qualifying entity will fall within a description in the schedules only if it carries on the activity specified in the schedules in the UK.

On 22 July 2025, the Cabinet Office launched a consultation seeking views on proposed changes to the National Security and Investment Act (Notifiable Acquisition) (Specification of Qualifying Entities) Regulations 2021. The proposed changes are:

• new standalone area definitions (where definitions are already covered by the NARs) as follows:
  • removal of critical minerals from the advanced materials section and creation of a standalone critical minerals schedule;
  • removal of semiconductors from the advanced materials section and creation of a standalone semiconductors schedule;
• changes to existing definitions in the following schedules:
  • advanced materials;
  • artificial intelligence;
  • communications;
  • critical suppliers to government;
  • data infrastructure;
  • energy;
  • suppliers to the emergency services;
  • synthetic biology, and
• new area definition (not previously covered by the NARs) for water.

Section 3 – Call-in power

The NSIA provides for the ability of the secretary of state to call in certain acquisitions for an assessment as to whether they may give rise to a risk to national security.

3.1 When can the call-in power be used?

Section 1(1) of the NSIA provides that a notice calling in a transaction (call-in notice) may be given by the secretary of state if there is a reasonable suspicion that either:

• 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; or
• arrangements are in progress or contemplation which, if carried into effect, will result in a trigger event taking place in relation to a qualifying entity or qualifying asset, and the event may give rise to a risk to national security.

Provided that the above criteria are met, acquisitions across the whole economy are within the scope of the NSIA. An acquisition may either be called in as a result of notification (see sections on mandatory and voluntary notification below and Checklist: Determining whether to file a National Security and Investment Act 2021 notification) or where the transaction has not been notified but the UK government has become aware of it.

For trigger events which took place from 4 January 2022, the secretary of state is able to give a call-in notice up to five years after a trigger event has taken place (but once the secretary of state has become aware of the trigger event, a call-in notice may not be given after the end of a period of six months from that time. On the meaning of ‘awareness’, see R (on the application of FTDI Holding Ltd) v Chancellor of the Duchy of Lancaster [2025] EWHC 1922 (Admin)). If the trigger event took place between 12 November 2020 to 3 January 2022, the time limits set out in section 2(4) of the NSIA are applicable. Acquisitions completed before 12 November 2020 fall outside the possible application of the Act.

3.2 Exercise of the call-in power

In May 2024, the secretary of state published an updated statement setting out how they expect the power to give a call-in notice will be exercised. This is useful guidance as to the likely exercise of the call-in powers and particularly the type of acquisitions that may be at risk of call in, but the statement is not legally binding and accordingly does not limit the secretary of state’s call-in powers. 

The statement gives ‘as much detail as is possible on how the Secretary of State expects to use the call-in power, given the sensitivity of national security’. It confirms that ‘the call-in power will be used solely to safeguard national security and will not be used to interfere unnecessarily with investment or to promote any other objectives.’

This statement must be reviewed by the secretary of state at least every five years.

3.2.1 Risk factors

The statement explains that ‘all acquisitions considered under the NSI Act are assessed on a case-by-case basis, taking account of all relevant considerations and with regard to the risk factors set out.’ The statement goes on to set out the risk factors that are listed below.

• Target risk – whether the target of the acquisition is being used or could be used in a way that gives rise to increased risks to national security.
• Acquirer risk – whether there are characteristics of the acquirer which might suggest there is or could be a risk to national security. A consideration of the characteristics of the acquirer can include the following:
  • the acquirer’s and linked parties’ past behaviour;
  • the acquirer’s and linked parties’ intent in carrying out the acquisition;
  • the acquirer’s sector of activity;
  • the acquirer’s existing capabilities (eg, technological and security capabilities);
  • the acquirer’s other acquisitions across a sector or linked sectors;
  • any ties or allegiance to a state or organisation hostile to the UK;
  • the acquirer's source of funds and investments and ‘whether actors with hostile intentions are seeking to obsfucate their identity by funelling investment through other companies or corporate structures’;
  • the requirements placed on the acquirer by other parties to consider any political, military or state-backed influence or obligations;
  • any prior UK or foreign sanctions imposed on the acquirer in connection with activity that may indicate a risk to national security; and
  • the level of control a sanctioned party will have on the target entity or asset.
• Control risk – whether the level of control acquired might increase the level of national security risk or the possibility of the target being used in such a way as to harm national security.

The 2024 updates to the statement note that the secretary of state anticipates that all three of the above risk factors will be considered when deciding whether to call in an acquisition but acknowledges that each risk factor will be different for each acquisition. This reflects a slight shift in position from the position set out in the 2021 version of the statement which stated that the expectation of the secretary of state was that ‘when calling in an acquisition, all 3 risk factors will be present, but does not rule out calling in an acquisition on the basis of fewer risk factors’. 

3.2.2 Acquisitions at greater risk of being called in

Qualifying acquisitions (both of entities and assets) across the whole of the economy are potentially subject to the call-in power. However, there are certain transactions which, according to the statement, are more likely to be called in, and these are listed below.

• Acquisitions of target entities in the 17 areas of the economy the government considers more likely to give rise to a risk to national security (as listed in section 2.6 above). Where an acquisition is not subject to mandatory notification (see section 4 below), the parties may choose to notify the Secretary of State, so as to be certain whether the acquisition will be called in.
• Acquisitions of control through material influence over target entities active in the 17 areas of the economy listed in section 2.6 above. These are not subject to the mandatory notification regime, but are more likely to be called in.
• Acquisitions of entities which undertake activities closely linked to the activities in those 17 areas of the economy (eg, their activities are related to energy but are not within the definition of energy) are more likely to be called in than those that are not closely linked.
• Acquisitions where the target holds a sensitive supply relationship to government in on active in the 17 areas of the economy listed in section 2.6 above or a related area.
• Acquisitions of assets that are, or could be, used in connection with those 17 areas of the economy or closely linked activities. Land is mainly expected to be an asset of national security interest where it is, or is proximate to, a sensitive site. Examples of such sensitive sites include critical national infrastructure sites or government buildings. However, the secretary of state may also take into account the intended use of the land. Overall, the secretary of state expects rarely to call in acquisitions of assets in terms of NSIA.
• Acquisitions of entities or assets that are outside the UK (and the territorial sea) are more likely to be subject to the call-in power for acquisitions in connection with 17 areas of the economy listed in section 2.6 above or closely linked activities, than for those in the wider economy. When considering whether to call in, the secretary of state will consider how strongly the entity or asset is connected to the UK, and to what extent people in the UK rely on entities and assets outside the UK and how this may affect national security risks.

3.3 What happens when a transaction is called in for assessment?

Where a call-in notice is given, the process for assessment is set out below in sections 4.3.3 and 4.3.4. 

Section 4 – Mandatory notification

The NSIA provides for a mandatory notification regime for notifiable acquisitions. Clearance must be obtained prior to completion of a notifiable acquisition.

4.1 When is mandatory notification required?

Other than where the secretary of state has already issued a call-in notice (that has not been revoked), mandatory notification is required prior to completion of a notifiable acquisition.

See also Checklist: Determining whether to file a National Security and Investment Act 2021 notification.

Notifications should generally be made at the point at which the terms of the acquisition are sufficiently stable to enable the government to properly assess whether the NSIA is applicable and whether it could lead to national security risks.

The government would generally consider it appropriate to notify when there is a good faith intention to proceed. This might be evidenced by:

• the existence of heads of terms;
• financing arrangements being in place;
• board level consideration of the acquisition; or
• if it is a public bid, a public announcement of a firm intention to make an offer or the announcement of a possible offer.

However, a notification may be accepted where the items above are not present where there are good reasons for doing so.

4.2 How is notification made?

Notification is made through an electronic notification system. Notification can be made through this system either by:

• the notifying parties (eg, acquirers); or
• the representatives of notifying parties (eg, law firms).

The questions which are asked within the notification system can be found here. The notification needs to be accompanied by a declaration that the information in the notification is correct and that it is understood that it is a criminal offence to submit incorrect information knowingly or recklessly. There are two declarations available and which to use will depend on whether the notifying party is legally represented or not.

In terms of timing, the guidance notes that ‘In some circumstances, an acquisition may require a mandatory notification, or be subject to a call-in or review under the NSI Act, at a time when the parties face financial distress that means they would like a faster decision from the government. In these circumstances, relevant parties should bring this to the government’s attention as soon as possible and provide supporting evidence, especially where the statutory timelines of the NSI Act could exacerbate financial problems’.

For detailed guidance on completing and submitting notification forms, please refer to the full guidance here.

4.3 What happens after notification is made?

4.3.1 Decision to accept the notice

After the notification is made, the secretary of state decides whether to accept or reject the notice. Although there is no hard time limit within which this decision must be made, it should be within a reasonable timeframe, the government aims to do this within five working days, but in some cases this may take longer.

There are limited reasons for rejection of a mandatory notification, namely that it does not comply with the requirements for notification or it does not contain sufficient information to enable the secretary of state to decide whether to give a call-in notice. If the mandatory notice is rejected, reasons for the rejection must be given in writing to the notifier as soon as practicable.

If the decision is taken to accept the mandatory notice, then the secretary of state must, as soon as practicable, notify the person who gave the notice and such other persons as the secretary of state considers appropriate.

4.3.2 Review period

From the day on which the person who submitted the mandatory notice is informed that the notice has been accepted, there is then a 30-working-day period of review (the review period).

During the review period, the secretary of state may give information notices and/or attendance notices.

• Information notices are provided for by section 19 of the NSIA. An information notice is a notice requiring a person to provide any information specified in the notice (or falling within a certain category of information as specified or described in the notice) which is in that person’s possession or power. The information notice must specify the purpose for which the notice is given and the possible consequences of non-compliance. An information notice may specify the manner in which the information is to be provided, specify time limits for either providing the information or notifying the secretary of state that the information requested is not in that person’s possession or power, or the information may require the person to provide information they have which would enable the secretary of state to find the information required. The requirement to provide information must be proportionate to the use to which that information is to be put.
• Attendance notices are provided for by section 20 of the NSIA. An attendance notice is a notice which requires a person to attend at a time and place specified in the notice and to give evidence to the secretary of state in relation to the secretary of state’s functions under the NSIA. Those required to give evidence might, for example, include the representative of the entity or people in specific positions in the companies involved in the acquisition. The attendance notice must specify the purpose for which the notice is given and the possible consequences of not complying with the notice. As with an information notice, the requirement to give evidence must be proportionate to the use to which the evidence is to be put. The government’s guidance notes that attendance notices will not normally be issued during the review period.

Section 34 of the NSIA sets out various offences related to information notices and the attendance of witnesses, including an offence of failure to comply with a requirement of an information and attendance notice.

Information and attendance notices issued during the review period do not ‘stop the clock’ on the 30-working-day deadline.

It is not unusual for the government to have sufficient information during the review period to decide whether to call the acquisition in or not.

Before the end of the review period either:

• a call-in notice needs to be given so that a full assessment of the acquisition can be carried out for national security risk; or
• the person who gave the mandatory notice (and such other persons as the secretary of state considers appropriate) must be informed that no further action will be taken under the NSIA.

4.3.3 Assessment period

On the day on which a call-in notice is given, an assessment period begins (the assessment period). The assessment period ends 30 working days from that date (the initial period), save for in certain circumstances, as described below.

The initial period may be extended where, before its end, the secretary of state gives an additional period notice. An additional period notice may be given where the secretary of state:

• reasonably believes that a trigger event has taken place (or that arrangements are in progress or contemplation which, if carried into effect, will result in a trigger event), and that a risk to national security has arisen or would arise from the trigger event; and
• reasonably considers that the additional period is required to assess the trigger event further.

If an additional period notice is given, the initial period is extended by 45 working days (the additional period). The additional period begins with the first working day after the day on which the initial period ends.

The additional period may only be extended where, before the end of the additional period, a voluntary extension period (the voluntary period) is agreed in writing between the secretary of state and the acquirer. Subsequent voluntary periods may be agreed in the same manner. Any such voluntary period may be agreed by the secretary of state only if the secretary of state:

• is satisfied, on the balance of probabilities, that a trigger event has taken place or that arrangements are in progress or contemplation which, if carried into effect, will result in a trigger event, and a risk to national security has arisen from the trigger event or would arise from the trigger event; and
• reasonably considers that the period is required to consider whether to make a final order or what provision a final order should contain.

During the assessment period, the secretary of state may give an information notice or attendance notice. It may be necessary to issue multiple information notices in an assessment of an acquisition. For reasons of confidentiality, parties should not expect to be told on whom an information notice has been served. On receipt of an information notice, parties may request a call with the government in order to discuss the notice and to clarify what is being asked. Unlike in the review period, an information or attendance notice given in the assessment period ‘stops the clock’ on the assessment period until the requirements of the notice have been complied with or (if earlier) the deadline for compliance has passed. The clock restarts the day after the government has confirmed that either of those two things has happened.

In addition, during the assessment period, the secretary of state may make an interim order for the purpose of preventing or reversing pre-emptive action (ie, action which might prejudice the exercise of the secretary of state’s functions under the NSIA in relation to the call-in notice), or mitigating its effects. Such an order may only be made if the secretary of state reasonably considers that the provisions of the order are necessary and proportionate for that purpose. An interim order may include:

• a requirement to do, or not to do, particular things;
• 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;
• a requirement not to disclose the contents of the order except to the extent permitted by the order; and
• consequential, supplementary or incidental provisions.

Examples of the types of restrictions imposed by an interim order include restrictions that prevent the exchange of confidential information, or access to sensitive sites or assets. The government will not routinely make interim orders public.

Unless an interim order has been issued which restricts or prevents any steps being taken which might undermine any final order, an acquisition can be progressed up to the point of completion during the review period and assessment period, but must not be completed without approval.

4.3.4 Final order

Before the end of the assessment period, the secretary of state must either:

• make a final order; or
• give a final notification that no further action is to be taken under the NSIA.

A final order will state that either the acquisition is cleared subject to certain conditions or the acquisition is blocked. A final order may be made if the secretary of state:

• is satisfied, on the balance of probabilities, that a trigger event has taken place or that arrangements are in progress or contemplation which, if carried into effect, will result in a trigger event, and a risk to national security has arisen from the trigger event or would arise from the trigger event if carried into effect; and
• reasonably considers that the provisions of the order are necessary and proportionate for the purpose of preventing, remedying or mitigating the risk.

Prior to making a final order the secretary of state must consider any representations made to them. In cases where the government is considering issuing a final order, the government may write to inform relevant parties of this and invite them to make representations to inform the government’s decision making. 

Depending on the facts of the case, this letter may inform the acquirer that the government is considering issuing a final order and provide information about the remedies they are considering. Where possible, this may include an overview of the national security risks identified, but given the sensitive nature of this information, it will not always be possible for the government to provide detailed descriptions of those risks. Parties do not need to wait for the government to suggest remedies in a case. If an acquirer believes that it has identified a remedy that it considers will mitigate any potential national security risk, it can make representations at any point in the process.

A final order may include the following:

• a requirement to do, or not to do, particular things;
• 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;
• a requirement not to disclose the contents of the order except to the extent permitted by the order; and
• consequential, supplementary or incidental provisions.

A final order ceases to have effect at such time as is determined by or under the order, unless it is revoked before such a time.

If a final order has been made and the notifiable acquisition is completed otherwise than in accordance with that order, the acquisition will be void.

4.4 What are the consequences of failing to notify?

4.4.1 Status of the acquisition

An acquisition that is notifiable but that is completed without the approval of the secretary of state will be void (section 13(1) of the NSIA). There are processes in place (see below) by which retrospective validation might be obtained for an acquisition which should have been notified but which was not.

Firstly, where the secretary of state becomes aware of a void notifiable acquisition, section 15 of the NSIA requires that within six months of becoming aware of the acquisition, the secretary of state must either:

• give a call-in notice in relation to the acquisition; or
• give a validation notice in relation to the acquisition to the person who was required to notify (and such other persons as the secretary of state considers appropriate) and notify those persons that no further action will be taken under the NSIA in relation to the acquisition.

The effect of a validation notice is that the notifiable acquisition to which it relates is to be treated as having been completed with the approval of the secretary of state (and, accordingly, it is not void).

Secondly, pursuant to section 16 of the NSIA, any person who is materially affected by the fact that a notifiable acquisition is void may apply to the secretary of state for a validation notice in relation to the acquisition (a validation application). A validation application is made via the same notification system as for mandatory or voluntary notifications. The information that must be provided can be found in the mandatory notification form.

As soon as reasonably practicable after receiving a validation application, the secretary of state must decide whether to accept or reject the application.

If the validation application is accepted, the secretary of state must, as soon as practicable, notify each relevant person. On the day that notification is given to the person who made the validation application, the review period begins. Before the end of the review period, the secretary of state must do one of the following:

• give a call-in notice in relation to the acquisition; or
• give a validation notice in relation to the acquisition to each relevant person and notify those persons that no further action will be taken under the NSIA in relation to the acquisition.

4.4.2 Offences and penalties

The NSIA provides for civil and criminal penalties for completing a notifiable acquisition without gaining the necessary approval from the secretary of state.

Criminal

Save for where there is a reasonable excuse, it is an offence under section 32 of the NSIA for a person to complete a notifiable acquisition without the approval of the secretary of state.

The maximum penalty (in England and Wales) for committing an offence of completing a notifiable acquisition without approval under section 32 of the NSIA is imprisonment for up to five years and/or an unlimited fine.

If an offence is committed by a body corporate, partnership or other unincorporated association either with the consent or connivance of an officer of the body, or due to any neglect on the part of such an officer, then the officer, as well as the body, is guilty of the offence and liable to be proceeded against and punished accordingly.

Civil

Where the secretary of state is satisfied, beyond reasonable doubt, that a person has committed an offence under section 32 (completing a notifiable acquisition without approval), they may, pursuant to section 40 and section 41 of the NSIA give a notice imposing a fixed monetary penalty in such an amount as the secretary of state considers appropriate, provided that the fixed amount does not exceed the totals listed below.

• If the offence is committed by a business, the higher of 5% of global turnover of the organisation and £10 million.
• If the offence is committed otherwise than by a business, the fine is £10 million.

Section 43 of the NSIA addresses the interaction between monetary penalties and criminal proceedings and convictions.

Section 5 – Voluntary notification

In addition to the introduction of a mandatory notification regime, the NSIA provides for the possibility of voluntary notification in certain circumstances (see further below).

5.1 When may a voluntary notification be made?

Where a mandatory notification is not required then there is no obligation to notify. However, if the parties wish to obtain certainty over whether the government might call in the acquisition (see section 3), section 18 of the NSIA provides for the possibility of submitting a voluntary notification.

A voluntary notification may be made where either a trigger event has taken place in relation to a qualifying entity or a qualifying asset, or arrangements are in progress or contemplation which, if carried into effect, will result in a trigger event taking place in relation to a qualifying entity or a qualifying asset.

See also Checklist: Determining whether to file a National Security and Investment Act 2021 notification.

As with a mandatory notification, notifications should generally be made at the point at which the terms of the acquisition are sufficiently stable to enable the government to properly assess whether the NSIA is applicable and whether it could lead to national security risks.

5.2 How is notification made?

Voluntary notification is made through the same electronic system as a mandatory notification. The questions which are asked via the system can be found here. The questions asked as part of the voluntary notification form are broadly the same as those contained in the mandatory notification form, subject to necessary adjustments to reflect the scope of the legislation in respect of each procedure. As with a mandatory notice, a voluntary notice should also be accompanied by a declaration that the information in the notification is correct and that it is understood that it is a criminal offence to submit incorrect information knowingly or recklessly, see section 4.2 above.

For detailed guidance on completing and submitting notification forms, please refer to the full guidance here.

5.3 What happens after notification is made?

5.3.1 Decision to accept the notice

After the notification is made, the secretary of state is required to decide whether to accept or reject the notice. There is no hard time limit within which this decision must be made, but it must be done within a reasonable timeframe, which has generally been five working days.

There are limited reasons for rejection of a voluntary notice, namely that it does not comply with the requirements for notification, it does not contain sufficient information to enable the secretary of state to decide whether to give a call-in notice or there is no reasonable prospect of being able to give a call-in notice due to the operation of the time limits (see further section 3.1 above).

If a voluntary notice is rejected, reasons for the rejection must be given in writing as soon as practicable. If the voluntary notice is accepted, the secretary of state must, as soon as practicable, notify the person who gave the voluntary notice (and such other persons as the secretary of state considers appropriate).

5.3.2 Review and assessment periods

The process for review and (if necessary) assessment of an acquisition are the same as for a mandatory notification. In this respect, see sections 4.3.2 to 4.3.3 above.

5.3.3 Final order

Provision for the making of a final order is the same as for a mandatory notification. See section 4.3.4 above.

5.4 What are the consequences of failing to notify?

For acquisitions falling outside the scope of the mandatory notification regime, there are no direct adverse consequences of not making a voluntary notification. For acquisitions which might reasonably be considered by the secretary of state to involve national security concerns and which might be a possible candidate for exercise of the call-in power, as noted above, the benefit of a voluntary notification is certainty for the parties about whether or not the call-in power would be exercised.

Additional resources

Check if you need to tell the government about an acquisition that could harm the UK’s national security
National Security and Investment Act: guidance for the higher education and research-intensive sectors
National Security and Investment Act 2021: guidance on compliance and enforcement

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Competition law practical resources

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Determining whether to file a National Security and Investment Act 2021 notification

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National Security and Investment Act 2021 case tracker

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