LONDON (Reuters) – Britain is reviewing how it screens foreign takeovers for national security concerns to reduce the burden on businesses, less than two years after tougher rules were introduced, deputy prime minister Oliver Dowden said on Monday.
The government, under the 2022 National Security and Investment Act, has the power to scrutinise investment and take action to protect assets that are vital to Britain’s national security.
Companies, however, have criticised the breadth of the act, which requires the notification of deals in 17 areas, ranging from advanced materials to transport.
In the first full year of the act coming into effect, China-linked takeovers accounted for eight of the 15 interventions made, prompting criticism from the Chinese embassy in London.
Notably, the law was used to force Chinese-owned technology company Nexperia to sell Britain’s biggest microchip factory, Newport Wafer Fab, which it had bought in 2021.
Dowden said he needed to ensure the screening powers remained “up to date, proportionate and transparent”, while protecting national security.
Semiconductors and critical minerals could be carved out as standalone sectors under the act, he said, reflecting their growing importance.
He said businesses, investors and advisors would now be consulted to ensure the process remained as frictionless and effective as possible.
Evidence can be submitted to the government until Jan. 15.
“The best way to foster economic security is through a strong and open economy,” Dowden said. “That’s why we’ve been using the powers effectively so far, only intervening when absolutely necessary to protect national security.”
(Reporting by Paul Sandle; Editing by Susan Fenton)