Review of National Security Law Aims to Cut Red Tape for Investors
Under the government’s newly published industrial strategy, ministers have unveiled plans to overhaul the National Security and Investment Act 2021 (NSIA) with the aim of making the UK’s foreign-investment rules more “predictable and proportionate” for businesses.
Published: June 27th, 2025
3 min read
The NSIA provides the government with the pre-emptive authority to examine and, if required, intervene during the acquisition of businesses whose operations might endanger national security. In 17 economically sensitive sectors it instituted a mandatory notification requirement for “trigger events”.
Earlier this year, a cross-Whitehall audit of the UK-China relationship concluded that the current definitions of the 17 sensitive sectors covered by the NSIA are too general in nature and prone to legal ambiguity. In response, the Foreign Secretary declared on 24 June that a 12-week consultation would be held to update those definitions and implement several new exemptions to the mandatory notification regime.
“China’s rise has shaped the geopolitical landscape over the past decade”, the Foreign Secretary informed MPs. “This Government conducted an audit of our most complex bilateral relationship to deliver a long-term strategy, moving beyond cheap rhetoric to a data-driven, cross-Government approach… We are launching a 12-week consultation on updating the definitions covering the 17 sensitive areas under the Investment Act”.
In industries ranging from advanced robotics and artificial intelligence to defence and energy, the NSIA has required mandatory pre-notification of deal activity since it came into effect in January 2022. 847 notifications and 37 in-depth reviews were made in the year to 2024 which resulted in several high-profile interventions. The most notable were the blocking of Nexperia’s proposed acquisition of Newport Wafer Fab and the scrutiny of Vodafone’s merger negotiations with Three.
Companies considering UK-based transactions in any of the 17 sectors are urged to engage with the consultation to help shape the final rules. The government has pledged to update its guidance alongside the review to ensure “clarity for investors on how the Act works, including decision-making processes,” while maintaining robust safeguards to protect national security.
For more information on the NSIA and the impact it may have on your business, please contact Harry Hazelwood in the Corporate team.
For further information please contact Harry Hazelwood
