By Dan Byrne for AMLi
A PROPOSED LAW in the United Kingdom would give the British Government increased power of probing foreign investments.
Provisions are contained in the National Security and Investment Bill 2020 which would allow authorities to investigate any investment made by foreign entities in UK business to determine whether or not they are a threat to national security.
“We welcome the vast majority of foreign direct investment,” said Secretary of State for Business Alok Sharma. “In just ten years, investment from overseas has created more than 600,000 jobs in Britain benefiting every corner of the country.”
“But we must also be clear that under no circumstances will we allow deals to be made that compromise this country’s national security. That’s why I am introducing new laws to shore up our fortifications against malicious investment.”
The powers would mostly fall in the hands of Alok’s Department for Business, Energy and Industrial Strategy (BEIS). They would upgrade laws which are over 20 years old, and mirror similar efforts in the US and Canada, Alok said.
Specifics of the bill revolve around three risk factors that the Secretary of State will consider before deciding whether to ‘call in’ investments or purchases of potentially threatening businesses.
These risk factors concern whether the investment is linked to an at-risk part of the British economy, what types of control the investment is subject to, and the jurisdiction or entity the investment is coming from.
The bill will likely be part of the UK’s efforts to clean up its foreign investment reputation following revelations that highlighted it as a weak link.
Lax oversight of foreign investment has been seen to open the country up as a channel for financial foul play, allowing criminals use the country as a base for their business.
It is evidenced by multiple findings of high-value property by individuals linked to laundering or terror financing schemes. Other properties have also been found to serve as listed addresses for shell companies attached to the same.
Additionally, the FinCEN files leak contained one document which said the US regarded the UK as a ‘higher risk’ jurisdiction for doing business – on par with other nations like Cyprus.
“Our economy’s success and our citizens’ safety rely on the government’s ability to protect national security while keeping the U.K. open for business with the rest of the world,” BEIS said in a statement about the new law.
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