National Security and Investment Act 2021

Scope of the Act

The Act grants the UK Government the right to scrutinise and intervene in acquisitions of entities or assets made that could harm the UK's national security.

In a university context, an entity would ordinarily be a spin out company and an asset would ordinarily be technology in the form of intellectual property acquired by a third party or shared via licensing agreements. Other acquisitions under the Act are the assignment of intellectual property to a third party through a research contract.

The government will be able to impose certain conditions on acquisitions. In rare instances, the government may unwind or block an acquisition completely. The government can assess acquisitions up to 5 years after they have taken place, however it cannot call in and assess acquisitions completed before 12 November 2020.

Operation of the Act: entities

The University is required to make mandatory notifications in respect of the acquisition of entities in the following security-sensitive areas:

• Advanced Materials
• Advanced Robotics
• Artificial Intelligence
• Civil Nuclear
• Communications
• Computing Hardware
• Critical Suppliers to Government
• Cryptographic Authentication
• Data Infrastructure
• Defence
• Energy
• Military and Dual-Use
• Quantum Technologies
• Satellite and Space Technologies
• Suppliers to the Emergency Services
• Synthetic Biology
• Transport

Qualifying entities include but are not limited to:

• universities
• trusts
• university subsidiaries
• university spin-outs
• unincorporated associations, such as a research consortium
• research organisations
• private companies or corporations doing contractual work with a higher education institution or research organisation

Operation of the Act: assets

The University is able to make voluntary notifications in respect of the acquisition of assets in the same security-sensitive areas listed above.

Qualifying assets include but are not limited to:

• designs
• plans, drawings and specifications
• software
• patents
• trade secrets
• databases
• source code
• algorithms
• formulae
• land
• laboratory equipment

Example scenarios

Useful examples of how the Act relates to university research can be found on the Government web pages.

NSI Act at the University of Sheffield

The University of Sheffield undertakes due diligence in respect of research collaborations as outlined on its due diligence webpages. Due diligence includes an assessment of both the NSI Act and export control.

As part of its due diligence processes, the University will work with PIs to assess whether any acquisitions forming part of a research/partnership project fall under the Act.  However, if you have any questions relating to NSI Act as part of prospective, new or existing relationships, please contact the Export Control team at exportcontrol@sheffield.ac.uk.

Whilst the onus is on the party acquiring the entity to make the notification, the University will nonetheless seek to advise parties acquiring University assets of their obligations under the Act.