On April 29, 2022, the UK introduced new measures to prevent the provision of internet services to or for the benefit of designated persons. These measures apply to the whole territory of the UK and to conduct by UK persons where that conduct is wholly or partly outside the UK. The designated entities or individuals (“Designated Persons”) can be found on the regularly updated UK Sanctions List with the tag “Internet Sanctions List”. To date, only V-Novosti and Rossiya Segodnya are designated under those authorities.
Updated as of March 3, 2022
Key Takeaways of EU and UK Recent Actions Against Russia and Ukraine Breakaway Regions
- The EU adopted sanctions restrictions targeting financial institutions, other entities, and individuals, and imposing territorial restrictions on Donetsk and Luhansk. The sanctions also include broad export restrictions to Russia detailed below.
- In the UK, Prime Minister Boris Johnson has promised and adopted a “massive package of economic sanctions” including asset freeze restrictions; potential exclusion of Russian banks from the UK financial system, including preventing access by such banks to GBP and clearing services in the UK; and dual-use export restrictions to Russia.
A new framework for foreign direct investments in the United Kingdom
- The United Kingdom Government has adopted a CFIUS-style National Security and Investment Act (“the Act”).
- The new law takes effect in later in 2021, but UK Government may look back at deals from November 2020 onward.
- The Act is considered one of the most far-reaching systems in the world, carrying civil and criminal penalties for a failure to notify.
- A notifiable acquisition completed without the approval of the Secretary of State is void (of no legal effect).
- The UK Government has stated that it will work closely with investors to help ease the market into the new framework of investment rules.
→ The new National Security and Investment Bill expands the UK government’s powers to intercede in acquisitions of UK companies where it determines there is a potential national security threat.
→ The Bill creates a new government agency, the Investment Security Unit (ISU) to oversee foreign direct investment review, removing the power from the competition/antitrust regulator, the CMA.
→ Regulators will be able to “call in” transactions that were not notified but that the Secretary of State determines may pose a national security risk.
→ A mandatory notification will be introduced for certain sectors, including penalties for failure to notify, but the details of those requirements have not been completed.
Continue Reading CFIUK: The United Kingdom Introduces a New Mechanism for Foreign Direct Investment Screening
The UK government has now made a show of force in its foreign direct investment (FDI) reviews.
For the first time, the UK Secretary of State issued an order to prevent a transaction for raising public interest considerations. Specifically, the UK Government blocked the prospective deal on national security grounds. In the September 5, 2020 notice, the UK Government accepted commitments from Gardner Aerospace Holdings Limited (Gardner) to not proceed with its proposed acquisition of Impcross Limited (Impcross), a UK-based manufacturer of components for the aerospace and military aircraft industry.
Continue Reading CFIUK? The UK Brings Heavier Scrutiny to Its Foreign Investment Reviews
On the morning of June 24, 2016, we woke up to a headline that had been much discussed, but still added a jolt to many people’s morning coffee: Britain to Leave the European Union.
The first response, almost inevitably, was fear and confusion. Global markets dropped precipitously (as did the Pound Sterling and the Euro) until the Bank of England spoke up to reassure investors, and even then the exchanges appeared jittery. Nevertheless, after bolting from bed in the first shocking instant, we propose a calmer moment to reflect on the new reality. Over breakfast (English breakfast tea with that, perhaps?), we may carefully examine how Brexit will impact global business.
To begin, we have taken that moment to analyze the implications of the UK’s separation from the European Union in the realm of sanctions, export controls, and foreign investment in the United States. We address those implications in the four questions below.
Continue Reading The Morning After: Waking up to Brexit and Its Impact on Your Business