BIA blog | Government defines Synthetic Biology for National Security and Investment regime

The National Security and Investment Bill, which the BIA has been working on in recent months, received Royal Assent and became legislation on 29 April 2021. This new law gives the UK Government powers to intervene in and scrutinise certain business transactions to protect national security. Since becoming law, the BIA has been working with Government officials on the outstanding aspects of the regime, like the definitions of the sectors it would apply to and the guidance associated.

The UK Government has now announced the regime will come into force on 4 January 2022 and apply retrospectively to transactions that have taken place on and since 12 November 2020. It has also published a raft of new documents setting out new details on how the regime will operate.

Sector definitions

Following on from the consultation on the draft definitions of the sensitive sectors of the economy the mandatory aspect of the regime would apply to, the sector definitions have now been published. The definition of Synthetic Biology has been significantly narrowed since the first draft was published following feedback from the BIA, but not all concerns raised have been addressed.

The BIA has continued to stress that the wide-reaching nature of the definition will capture many companies in the life sciences sector whose work will have no implication on national security, though the inclusion of lists of exemptions from this draft is welcome. The main exclusion included which would hopefully prevent many life sciences companies falling within the scope of the regime is the exception of companies who use Synthetic Biology “at any stage of the development or production” of human or veterinary medicines or immunomodulatory approaches, unless it can be “employed or modified to produce, deliver or produce and deliver”, a) “toxic chemicals to achieve an incapacitating or lethal effect on humans or animals”, or b) materials restricted in anti-terrorism legislation.

This exclusion is key and could be accompanied by additional exclusions which would further support the sector. Capturing companies which have no implication on national security may delay or deter vital investment in the sector and could lead to the Investment Security Unit overseeing this regime becoming overwhelmed with notifications.

The definitions could potentially change further, with the final definitions expected to be published in secondary legislation when Parliament returns in the Autumn.

Guidance for investors and businesses

Alongside the legislation and the sector definitions, guidance is being produced by the Government to help companies understand their obligations and self-certify whether they need to submit a notification under the regime when going through a transaction. The BIA was appointed to an Expert Panel by the Department for Business, Energy and Industrial Strategy (BEIS) to be consulted on this guidance, alongside a number of other key stakeholders.

BEIS has published its first tranche of guidance to complement the legislation, which we, on behalf of our members, fed back on to highlight where it could be improved, and are pleased to see some of our comments taken on board. The guidance published includes:

In the coming months, we’re expecting further guidance to be published, including guidance to accompany each sector definition. The BIA has provided comments on the guidance for the definition of Synthetic Biology, but has not seen updated guidance following our input.

Consultation on the use of call-in powers

The legislation required the Secretary of State to publish a statement to outline how his call-in powers would be used for parties to an acquisition to be able to understand whether their acquisition is likely to be called-in. The statement outlines the three key risk factors that will be considered: target risk, acquirer risk and control risk.

A draft version of this statement has been published alongside a consultation on its contents. Over the coming weeks, the BIA will be working with members to represent their views in the response to this consultation.

Member support

We’ve been working with members to help them understand their obligations under the new regime and ensure their concerns are heard by Government. We recently hosted Jacqui Ward, Director of National Security at BEIS at our Life Sciences Leadership Summit to speak to members and answer questions about the specific workings of the new regime.

In the lead up to the commencement of the regime, we’ll be looking to facilitate more opportunities for members to speak to BEIS officials and have their questions answered. In the meantime, you can read more about the regime and what it might mean for your company here.  If you have any questions or comments about the regime or the BIA’s work on this, please do email me.

Zainab Gulamali

Policy and Public Affairs Advisor

BIA

Zainab joined the BIA in March 2021 as a Policy and Public Affairs Advisor. She previously was Public Affairs and Communications Manager for the Muslim Council of Britain, and prior to this, Zainab worked in the House of Commons where she was the Head of Parliamentary Affairs for Plaid Cymru, coordinating voting and advising on policy.

Outside work, Zainab has recently been with local councils and public health bodies on the rollout of the COVID-19 vaccine in London’s faith and ethnic minority communities. In her spare time, she is an avid baker of bread and biscuits.