The National Security and Investment Act 2021

This guide addresses 6 key questions on call-in notices under the Act. An introductory guide to the Act is available here.

1 What is a call-in notice?

The Act applies to the acquisition of a qualifying interest in an entity or an asset that has a connection with the UK.

Under the Act, certain transactions must be pre-notified to the government for approval. Others do not need to be notified, but the government could choose to review them of its own initiative if it considers that they might give rise to national security concerns.

The first step in the government’s formal review will be the issuance of a call-in notice. It may occur if:

• the government is aware of a qualifying acquisition that is in contemplation and it has not already received from the purchaser a mandatory notice concerning the acquisition,
• a mandatory pre-notification has been received and accepted by the government, and it wishes to initiate an in-depth review of the acquisition,
• the government suspects a qualifying acquisition has occurred that should have been notified, or
• the government is aware of a qualifying acquisition that was not subject to mandatory pre-notification and it has not received from the purchaser a voluntary notification, but it reasonably suspects that the acquisition may give rise to a national security risk.

2 Who receives a call-in notice?

The purchaser, the entity purchased or to be purchased and other persons, for example, customers considered relevant will receive a call-in notice.

3 What should you do if you receive a call-in notice and you are the purchaser?

If the acquisition is in contemplation and you intended to submit a mandatory notice, you can no longer do so. Instead, you would respond to information notices issued to you by the government and engage with the government in order to seek from it a no-further action notice.

If the acquisition has completed and you should have provided a mandatory notification but did not, this means the acquisition is void. You will receive from the government an information notice. You are required to provide the information demanded in the information notice. Additional information notices may be issued and attendance at meetings with the government required. At the end of this process, you would be seeking to obtain from the government a no-further action and validation notice which means the acquisition is then deemed not to be void.

If the acquisition is not subject to mandatory notification, you will receive from the government an information notice. You are required to provide the information demanded in the information notice. Additional information notices may be issued and attendance at meetings with the government required. At the end of this process, you would be seeking to obtain from the government a no-further action notice.

4 What should you do if you receive a call-in notice and you are the target business or the seller?

You should consider the terms of the sale and purchase agreement and liaise with the purchaser. If the acquisition has completed and a mandatory notice should have been submitted but was not, then the acquisition is void. This could have serious consequences for the business, the details of which will need to be determined.

5 What should you do if you receive a call-in notice and you are not a party to the acquisition, for example, a customer?

The government likely considers the acquisition is of material relevance to you. This will be the case if a mandatory notice should have been submitted by the acquisition parties but was not, because it means the acquisition is void. This may have serious consequences for the legal basis on which you have done business with the target business and/or the purchaser. You have the right to submit a validation application.

6 How long does the process take?

From issuing the call-in notice the government has an initial assessment period of 30 working days, by which time it will either issue a no-further action notice so ending the matter or subject the acquisition to an additional assessment of up to 45 working days. By the end of this additional assessment period the government will either issue a no-further action notice, agree with the purchaser a voluntary extension in time or issue a final order blocking the acquisition or imposing conditions on the acquisition.

The time periods above are suspended at any point when the government issues an information notice and resumes when the government confirms that the notice has been complied with or the time given to comply has passed. The same applies to notices to attend meetings.