On 15 November 2021, the UK Department of Business, Energy, and Industrial Strategy published the Guide for Notifiable Acquisitions under the National Security and Investment Act (“Guide”), which will come into effect on 4 January 2022.
The Guide emphasizes that the National Security and Investment Act requires organizations to notify the government about acquisitions of entities involved in seventeen areas of the economy which are deemed as "sensitive,". these sensitive areas are advanced materials, advanced robots, artificial intelligence (“AI”), civil nuclear, communications, computing hardware, critical suppliers to government, cryptographic authentication, data infrastructure, defense, energy, military and dual-use, quantum technologies, satellite and space technology, suppliers to the emergency services, synthetic biology, and transport. More specifically, the Guide defines and expands on specific considerations for each of these areas of the economy and the situations that necessitate notifying the government (“Mandatory Notification”).
While the Guide observes that the research and usage of advanced materials are quickly expanding in both defense and civilian sectors, its relevance to assist in the transformation of key industrial sectors and supporting key areas of high-value manufacturing are emphasized. In addition, while highlighting the substantial benefits that advanced materials provide to military capabilities, it is argued that the national security risk it poses is obvious.
According to the Guide, the intersectional and dual-use character of advanced materials would also mean that developing technologies based on advanced materials would have defense and security applications and ramifications independent of the application or industry that enables them to emerge.
It has been evaluated that the intersectional and dual-use nature of advanced materials would also mean that emerging technologies using advanced materials may have defense and security applications and implications regardless of the application or the industry that enables them to develop.
Further, while it was mentioned that those engaged in activities related to advanced materials would be legally compelled to make a Mandatory Notification to the government, a statement was made regarding the goods and activities that are considered as advanced materials.
Additionally, it is stated that robots are no longer limited to factory or laboratory environments, with increasingly capable, mobile, and autonomous robots providing new services and capabilities on land, in the air, on or under the sea, and in space. To this extent, it is assessed that these capabilities, including the ability to operate autonomously and safely collaborate with humans, have the potential to unlock significant commercial and public-interest applications even where an organization develops or manufactures robots or services specifically for civilian applications, potentially in the military, or can be adapted for use in national security-related applications.
While defining advanced robotics, the situations in which a legally compelled Mandatory Notification must be made are also explained.
While it has been mentioned that AI is dual-use by nature and potentially easy to reuse, attention has been drawn to the increasing interest of military and law enforcement agencies in advancing the use of AI in their fields. Other actors can use AI applications for malicious and harmful purposes. This implies that technologies designed for the commercial market and consumers can be reused and used in ways that raise national security concerns. The opportunity to employ AI positively in the UK economy exists only if sensitive and critical AI applications can be safeguarded. Additionally, it was highlighted that this Guide would apply to firms that are not necessarily identified as "AI companies," as AI technology is frequently general-purpose and employed across industries.
The Guide also outlines two methods that organizations should use to assess if a qualifying entity they are interested in acquiring fits within the scope of the National Security and Investment Act. First, organizations should confirm the usage of AI by determining whether the qualifying entity conducts research into, develops, or produces goods, software, or technology that uses AI. Second, organizations should confirm the use of AI by examining whether the qualifying entity's AI work is utilized for identification or tracking, on the one hand, or advanced robotics or cybersecurity, on the other.
While highlighting the need for a strong defense sector for national security, it has been emphasized that it provides defense capabilities important to national security and prosperity, sustains jobs and skills, contributes to R&D programs, supports production, and provides export opportunities. Given its importance for national security, it was said in this context that the defense sector should stay robust to a wide range of developing threats and that all Ministry of Defense suppliers would be subject to the relevant regulations. Moreover, a statement was made regarding the situations in which a legally compelled Mandatory Notification to be made to the government.
Military and Dual-use
First and foremost, it has been explained in the Guide that military and dual-use products can constitute an immediate and direct threat to the UK if they fall into the hands of the wrong parties.
The Guide, which provides definitions for dual-use products, explains that the military and dual-use part of the regulations is purposely tied to goods and technologies that are now "controlled" under the export control regime due to their military or dual-use features.
Further, it has been clarified that qualified entities who conduct research, develop, or manufacture restricted goods or technology subject to aspects of export control legislation about national security controls must file a legally compelled Mandatory Notification.
Satellite and Space Technology
Noting that all space-based services are cross-cutting and affect other critical national infrastructure sectors, the Guide explains that the ease with which satellite and space technology can be used for both civilian and military purposes is a growing concern that the government would closely monitor. Moreover, this concern has been characterized as complex, with the underlying issue being the ability for adversaries to employ what appear to be largely civilian capabilities to achieve military aims.
Further, it has been evaluated that qualified entities who carry out activities that consist of or include operating, developing, producing, creating, or using activities such as space debris management, in-orbit activities, satellite communication links, secure facilities, manufacture or testing, space-derived data for any defense purpose, space infrastructure operational control facilities, provision or processing of space situational awareness data.
Suppliers to the Emergency Services
Another sensitive area mentioned under the Guide is the suppliers to the emergency services. Noting the importance of emergency services for citizen safety and security, the Guide stated that the government deems certain services provided in the sector are sufficiently sensitive to warrant a Mandatory Notification to be made. With this respect, it is evaluated that those who purchase all or part of a qualified organization providing emergency services, as well as one or more items and services used in the operational provision of this emergency service, must file Mandatory Notification.
The Guide also provides detailed information on unmanned aircraft, firearms, and other goods and services such as maintenance and supply, fuel cards, security access to buildings, communications and storage of electronic data, ambulance service providers, contingency labor against strike action.
Şafak Herdem, Esra Temur