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CHINA
- and notification by industry (both voluntary and mandatory, dependent on the threshold), although interventions are not strictly contingent on notification. In 2018, the Government anticipated that there would be 200 notifications from industry each year, of which around half would raise a national security concern. However, by September 2020, HMG was estimating that there would be between 1,000 and 1,800 notifications per year from industry—although they still considered that fewer than 100 would be called in for review under the legislation.[1]The remainder are subject to a national security assessment. If the Government decides national security is at risk, it could impose remedies where necessary and proportionate.
- NCSC explained that Huawei's 2012 purchase—from the East of England Development Agency, then a UK Government non-departmental public body—of the Centre for Integrated Photonics (CIP), is the sort of case in which the Government should intervene:
one of the things is we have allowed foreign investment to take early-stage technology out of the UK. … Huawei bought [CIP] for 70 million quid [British pounds] because it was going under. That's how they got a head start on 100GB optics. That's not something we should allow to happen. There was no law in place … that would allow us to stop that.[2]
- As noted above, under the NSI Act, a team called the ISU was established in BEIS to co-ordinate advice and expertise from across Government on the risks from potential foreign investments. It took an 'actor-agnostic' approach to investment scrutiny, considering each case on its merits rather than solely through the prism of country of origin. The ISU replaced the Investment Security Group (ISG), which had been established in May 2017 as part of the Cabinet Office and which had been performing a similar function. During the passage of the NSI Act, Parliament was told that the ISU "will work closely with the security agencies and other departments with real sector expertise".[3]
- The Intelligence Community's input into the ISU is now channelled through ***, a joint team from the Centre for the Protection of National Infrastructure (CPNI—accountable to MI5) and NCSC (part of GCHQ). Established in July 2020, it is designed to "bring coordination to the identification and mitigation of the national security risks posed by a sub-set of foreign investment transactions".[4]These new arrangements enhance the Intelligence Community’s ability to draw on secret intelligence to inform the work of the ISU and ministers’ decisions.
- As of September 2021 (when the NSI regime had not entered fully into force), the joint team was providing support to the ISU on *** investment cases.[5] Between July and September 2021, the joint team received *** 'triage' requests from the ISU, a quarter of which related to proposed investments or acquisitions from China (not all triage requests will result in ongoing support from the joint team).[6] Following the NSI Act entering into
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