The UK Government has published its first ‘Annual Report’ on the workings of the National Security and Investment Act 2021 (“NSI Act”). 

As the report helpfully notes, the purpose of the NSI Act is to allow the Secretary of State to review acquisitions that may give rise to a risk to national security, particularly in relation to acquisitions of entities that carry out sensitive work in the 17 areas of the economy identified in the legislation.  These include not just areas such as the obvious defence, civil nuclear, and critical supplies to government but also data infrastructure, communications, energy and transport.

If you would like more general information on the NSI Act, please refer to the briefing prepared by my colleagues Chris Worrall, Shachi Nathdwarawala and Sandra Mapara.

It’s not really an ‘Annual Report’ as it only covers 4 January 2022 to 31 March 2022, but the idea is for future reports to cover whole years from April 2022.

The document is useful as it sets out how the UK’s new FDI regime has been performing through its first three months of operation in the absence of public individual case reports.

Numbers of notifications and call-ins

Broadly speaking, there have been fewer notifications than anticipated (222 in three months) as against their Impact Assessment estimate of 1,000 to 1,830 per year.  However, the report recognises that M&A activity might have been impacted by a surge in COVID Omicron variant cases.  The vast majority have been mandatory notifications in the 17 sectors, with only 25 voluntary notifications having been made.

Similarly, there have been fewer ‘call-ins’ (that is, when the Department for Business, Energy and Industrial Strategy (“BEIS”) needs more time to investigate as it suspects there may be national security concerns).  There have only been 17 call-ins in three months as against the Impact Assessment estimate of 70 to 95 call-ins per year.  However, while this is lower – reflecting the lower number of transactions notified – it is a marginally higher percentage of transactions than anticipated.

So far, all notifications have been considered within the statutory timescales, with decisions on whether to call-in the transaction seeming to be taken in around 24 working days from acceptance (which takes around 3-4 working days where there are no issues). 


By some way the most mandatory notifications have involved companies operating in the defence and military and dual use items sectors.  These include those companies either directly supplying or part of the supply chain for supplying the Ministry of Defence.

The next largest category of mandatory notifications have involved critical suppliers to government and the emergency services (including police, ambulance and fire and rescue services).

Other significant sectors in terms of proportions of notifications so far have included: Artificial Intelligence, Data Infrastructure, Advanced Materials and Energy.  The fewest mandatory notifications have been in relation to Synthetic Biology.

Voluntary notifications have shown a different distribution pattern, with Professional, Scientific and Technical Activities heading the list, followed by Data Infrastructure.


The sector notification statistics are unsurprisingly reflected in the proportions of call-ins by sector, with military and dual use, defence and critical supplies to government at the top of the list.

So far, only three cases have completed the call-in process and all of these have been cleared to proceed without any conditions.  The other 14 call-ins remained ongoing cases as at 31 March 2022.


It’s early days yet, but the NSI notification systems seems to be functioning relatively well (subject to some issues with the online notification portal) and our own experience is that the BEIS team dealing with the notifications has been responsive and helpful (within the constraints of their own internal procedures).  It will be interesting to see whether things continue to be running so smoothly when we get a full year’s reporting next year.