New national security rules for ‘sensitive’ research from 2022

Government releases guidance for universities and research institutes that plan to complete deals with private or foreign organisations in 17 “sensitive” research areas

Universities, research institutes and spin-outs in the UK must heed new rules on innovation and investments from next year, as the government obtains powers to investigate and stop acquisitions that could pose a risk to national security.

The National Security and Investment Act 2021 applies to deals that could grant private and overseas agents valuable assets or influence over “sensitive areas of the economy”.

Whitehall can impose “certain conditions” and even “unwind or block” deals of concern – but it “expects to do this rarely”, the government guidance said.

Public and private universities, trusts, spin-outs, subsidiaries, research institutions and private companies that work contractually with the HE sector are all in the scope of the rules, which come into force from 4 January 2022.

Designs, drawings, software, trade secrets, databases, source code, algorithms, formulae, land and moveable property (like laboratory equipment), are listed as valuable assets by the new government guidance.

Gaining shareholder stakes or voting rights – or obtaining the power to “materially influence the policy” of an organisation, like the right to appoint or dismiss board members – are also listed by the government as potentially sensitive acquisitions. The rules include contracts and sponsored research and research positions.

The government gains powers to investigate research deals “it reasonably suspects […] have given rise to, or may give rise to” a risk to national security. Agreements finalised before November 2020 are out of the scope of the legislation – but other deals should be referred to the government for approval.

Investors, partners and universities are legally required to inform the Department for Business, Energy and Industrial Strategy (BEIS) of “notable acquisitions” in research pertaining to robotics, AI, computing, nuclear, communications, data, defence, energy, military, space, synthetic biology and transport.

“Completing a notifiable acquisition without approval will mean the acquisition is void and may mean that the acquirer is subject to civil or criminal penalties,” government guidance says.

The new guidance offers universities examples of the sorts of deals that could be liable for investigation, listing, for example, research projects that allow foreign or private corporations intellectual and tangible property. Companies acquiring more than a quarter of shares in a subsidiary undertaking research in one of the 17 “sensitive areas” is another potentially unlawful move.

Read more: MPs ‘reservations’ at minister’s pick for UKRI chair

Leave a Reply

Free live webinar & QA

Blended learning – Did we forget about the students?

Free Education Webinar with Class

Wednesday, June 15, 11AM London BST

Join our expert panel as we look at what blended learning means in 2022 and how universities can meet the needs of ever more diverse student expectations.

Send an Invite...

Would you like to share this event with your friends and colleagues?