Foreign Direct Investment Review Regimes in Europe

United Kingdom – Current position (2)

• Lower jurisdictional thresholds introduced for mergers in certain sensitive sectors (2018)
• Target turnover threshold: £1m in the UK for businesses involved in:
• Development or production of military or dual use items subject to export control
• Design and maintenance of aspects of computing hardware, or
• Development and production of quantum technology
• “Share of supply test” broadened so transfer of a share of 25% or more is sufficient
• On 22 June 2020, UK Government announced application of the lower thresholds to:
• Artificial intelligence, cryptographic authentication technology, and advanced materials

United Kingdom – Proposed new FDI regime

• UK to adopt a new FDI regime
• Proposals set out in July 2018 White Paper: draft Bill awaited
• White Paper proposals reportedly being strengthened
• UK needs to establish own FDI regime before it strikes new trade deals
• “We can be an open market for exchange, a broker to the world, and still protect the crown jewels of our knowledge economy”
• Tom Tugendhat, Chair of House of Commons Foreign Affairs Committee, 23 May 2020
• “The UK is open for investment but not for exploitation”
• The Rt Hon Alok Sharma MP, Secretary of State for Business, 21 June 2020
• When considering the Bill, the Foreign Affairs Committee intervened to prevent alleged attempts by Imagination Technologies to transfer technology to its ultimate owners in China

United Kingdom – White Paper (1)

• NB: the following is subject to change:
• White Paper targets “hostile actors”
• Voluntary notification, with call-in powers
• 200+ reviews per year?
• Broad definition of national security. ‘Core areas’ include:
• Civil nuclear, communications, defence, energy
• AI and machine learning, autonomous robotic systems, computing hardware, cryptographic technology, materials and manufacturing science, nanotechnologies, networking/data communication, quantum technology, synthetic biology
• Critical suppliers to the Government and emergency services sector
• Military or dual-use technologies