Tuesday 2 November 2021
Business, Energy and Industrial Strategy
National Security and Investment Act 2021: Call-in Power
The National Security and Investment Act 2021 protects the public from potential risks. It bolsters the UK’s status as an attractive place to invest by providing more efficient clearance processes for relevant acquisitions and more certainty and transparency for investors and businesses. It is a proportionate response to modern developments in international investment.
It will also ensure foreign direct investment projects can continue to boost jobs and stimulate the economy in every corner of the UK, as the vast majority of deals will be able to proceed without delay.
The Act provides for a call-in power which enables the Government to screen qualifying acquisitions for national security risks. In order to use the call-in power, the Secretary of State must—in accordance with section 3 of the Act—lay before Parliament, and publish, a statement on the expected use of the call-in power. This will provide clarity and certainty for businesses and investors on the circumstances in which national security risks are considered more likely to arise from qualifying acquisitions.
The Government consulted on a draft of the statement from 20 July to 30 August, in line with the commitment to consult given during parliamentary passage of the Act. I am grateful for the constructive responses which we received from businesses, investors, law firms and others.
I am today laying the statement before Parliament and publishing it alongside the Government’s response to the consultation. This fulfils the requirements of the Act and enables the call-in power to be used once the Act fully commences on 4 January 2022.
The statement should be read alongside other guidance documents which the Government have published about the NSI system, and further guidance will be published in the coming weeks.
I will place a copy of the Government response to the consultation on the draft statement for the purposes of section 3 in the Libraries of both Houses.
Register of Beneficial Owners of Overseas Entities Update
My noble Friend the Parliamentary Under- Secretary of State for Business, Energy and Industrial Strategy (Lord Callanan) has today made the following statement:
The Government committed, via section 50 of the Sanctions and Anti-Money Laundering Act 2018, to report to Parliament annually on the progress that has been made towards putting in place a register of beneficial owners of overseas entities owning land in the UK—“the overseas entities register”.
The overseas entities register is one of a number of proposed corporate transparency reforms which together will play an important role in underpinning a strong, transparent and attractive business environment in the UK while reducing the opportunities for bad actors to abuse our systems and controls.
Since last updating Parliament, in July 2020, the Government published their response to their landmark consultation on reforming Companies House. The response, published in September 2020, set out the Government’s proposals to boost Companies House’s potential as an enabler of business transactions and economic growth, while giving it a bigger role in combating economic crime. The far-reaching reforms include verification of the identity of people who manage or control companies, and anyone else submitting filings, utilising the latest technology; greater powers for Companies House to query and challenge the information submitted to it; and the effective protection of personal information provided to Companies House. Three further consultations were published in December 2020, seeking views on the finer details of the reform package.
These reforms amount to the largest change to our system of setting up and operating companies since the companies register was created over 170 years ago.
The UK continues to lead the global fight against illicit finance and this register will strengthen our already impressive controls. The Financial Action Task Force completed a landmark review of the UK’s regime for tackling money laundering in December 2018, concluding that we have some of the strongest controls in the world.
The Government intend to introduce legislation to Parliament as soon as parliamentary time allows.
Disclosure of Asset Sale Completion
I can confirm today the completion of the sale of the share capital of Bradford & Bingley (B&B) plc and NRAM Ltd, returning both companies to private ownership.
In February 2021, the Government announced the agreement of a transaction to sell the share capital of B&B and NRAM, and their remaining loan assets, to a consortium of Citibank and Davidson Kempner Capital Management. The sale of the loan assets to Citibank completed in March. Following the receipt of regulatory approvals from the FCA, the sale of the companies to Davidson Kempner completed on 29 October.
Accounting for final adjustments ahead of completion, this transaction generates a total consideration of £5.2 billion for the Exchequer.
The completion of this transaction marks a significant milestone in the Government’s work to divest the institutions and assets brought into public ownership as a result of the 2007-08 financial crisis.