(1) Subject to section 43(1), the Secretary of State may give a notice imposing a monetary penalty on a person if the Secretary of State is satisfied, beyond reasonable doubt, that the person has committed an offence under—
(a) section 32 (completing notifiable acquisition without approval),
(b) section 33 (failing to comply with interim or final order), or
(c) section 34 (offences in relation to supplying information and attendance of witnesses),
(including where the person is liable to be proceeded against by virtue of section 36).
(2) A notice under this section is referred to in this Act as a penalty notice.
(3) In this Act “monetary penalty” means a requirement to pay to the Secretary of State a penalty of an amount determined by the Secretary of State.
(4) For an offence under section 33 or 34(1)(a), a monetary penalty may be—
(a) a fixed amount (“a fixed penalty”),
(b) an amount calculated by reference to a daily rate (“a daily rate penalty”), or
(c) a combination of a fixed penalty and a daily rate penalty.
(5) For an offence under section 32 or for any other offence under section 34, the monetary penalty may be a fixed penalty only.
(6) The amount of the monetary penalty is to be such amount as the Secretary of State considers appropriate but it may not exceed the permitted maximum, as set out in section 41.
(7) When determining a monetary penalty under this section, the Secretary of State must have regard, in particular, to—
(a) the seriousness of the offence,
(b) the desirability of deterring both the person on whom the penalty is imposed and others from committing the offence to which the penalty relates,
(c) the possibility, and desirability, of rectifying any failure to which the offence relates,
(d) any steps taken by the person on whom the penalty is imposed towards rectifying any failure to which the offence relates, and
(e) the ability of the person on whom the penalty is imposed to pay the penalty.
(8) A penalty notice must include information as to—
(a) the grounds for imposing the monetary penalty,
(b) whether the penalty is a fixed penalty, a daily rate penalty or a combination of both and how it is calculated,
(c) in the case of a fixed penalty, the amount of the penalty,
(d) in the case of a daily rate penalty, the amount of the daily rate, the day on which the amount first starts to accumulate and the day on which, or the circumstances in which, it ceases to accumulate,
(e) how the amount of the penalty was determined,
(f) how payment may be made,
(g) the period within which payment is to be made (which must be at least 28 days),
(h) rights of appeal,
(i) the consequences of non-payment.
(9) For the purposes of a daily rate penalty—
(a) the first day on which the amount may start to accumulate is the day after the day on which the penalty notice is given,
(b) unless the Secretary of State determines an earlier date, the daily rate ceases to accumulate at the beginning of the earliest of—
(i) the day on which the requirement to comply to which the offence relates is satisfied,
(ii) the day on which that requirement no longer applies.
(10) A monetary penalty imposed under this section is to be paid out of—
(a) the partnership assets where imposed on a partnership, and
(b) the funds of the association where imposed on an unincorporated association other than a partnership.
(1) The following are the permitted maximum fixed penalties for an offence under section 32 or 33—
(a) if the offence is committed by a business, the higher of 5% of the total value of the turnover of the business (both in and outside the United Kingdom and including any business owned or controlled by the business) and £10 million,
(b) if the offence is committed otherwise than by a business, £10 million.
(2) The following are the permitted maximum amounts per day for a daily rate penalty for an offence under section 33—
(a) if the offence is committed by a business, the higher of 0.1% of the total turnover of the business (both in and outside the United Kingdom and including any business owned or controlled by the business) and £200,000,
(b) if the offence is committed otherwise than by a business, £200,000.
(3) The permitted maximum fixed penalty for an offence under section 34(1)(a) is £30,000.
(4) The permitted maximum amount per day for a daily rate penalty for an offence under section 34(1)(a) is £15,000.
(5) The permitted maximum fixed penalty for an offence under section 34(1)(b) is £30,000.
(6) The permitted maximum fixed penalty for an offence under section 34(2) is £30,000.
(7) The permitted maximum fixed penalty for an offence under section 34(3) or (4) is £30,000.
(8) The Secretary of State may by regulations—
(a) provide that a person of a description specified in the regulations is or is not a business for the purposes of this section,
(b) make provision for determining when a business is to be treated as controlled by another business for the purposes of this section,
(c) make provision for determining the turnover (both in and outside the United Kingdom) of a business for the purposes of this section,
(d) amend subsection (1) or (2) so as to alter the percentage for the time being specified there,
(e) amend any of subsections (1) to (7) by substituting a different sum for any sum for the time being specified there.
(9) The regulations may in particular—
(a) include by virtue of subsection (8)(c) provision as to the amounts which are, or which are not, to be treated as comprising the turnover of a business, or provision as to the date or dates by reference to which the turnover of a business is to be determined,
(b) make provision for the Secretary of State to determine matters of a description specified in the regulations (including the matters mentioned in paragraph (a)).
42 Review, variation and revocation of monetary penalties
(1) The Secretary of State must keep a monetary penalty imposed by a penalty notice under review and may vary or revoke the penalty notice as the Secretary of State considers appropriate.
(2) If a penalty is revoked under this section, the Secretary of State must, as soon as practicable, give a notice to the person upon whom the penalty was imposed.
(3) If a penalty, or the period within which a penalty is to be paid, is varied under this section, the Secretary of State must, as soon as practicable, give a notice to the person on whom the penalty was imposed which—
(a) states the variation and the reasons for the variation,
(b) includes information about rights of appeal and consequences of non-payment.
(4) A notice under subsection (3) is referred to in this Act as a penalty variation notice.
43 Monetary penalties: criminal proceedings and convictions
(1) A penalty notice may not be given to a person in respect of an offence if—
(a) criminal proceedings have been instituted but not concluded in respect of the offence, or
(b) the person has been convicted of the offence.
(2) Where a person has paid, or is required to pay, a monetary penalty under a penalty notice, no criminal proceedings may be instituted against the person in respect of the offence to which the notice relates.
(1) Subsections (2) to (8) apply if all or part of a monetary penalty imposed by a penalty notice is unpaid by the time it is required to be paid.
(2) The unpaid balance carries interest from time to time at the rate for the time being specified in section 17 of the Judgments Act 1838.
(3) Where the Secretary of State considers it appropriate to do so, the Secretary of State may require so much of the penalty as has not already been paid to be paid immediately.
(4) The Secretary of State may recover any of the penalty and any interest that has not been paid if—
(a) no appeal relating to the penalty has been brought under section 50 during the period within which such an appeal may be brought, or
(b) an appeal has been determined or withdrawn.
(5) In England and Wales, and in Northern Ireland, the penalty is recoverable as if it were payable under an order of the High Court.
(6) In Scotland, the penalty may be enforced in the same manner as an extract registered decree arbitral bearing a warrant for execution issued by the sheriff court of any sheriffdom in Scotland.
(7) Where action is taken under this section for the recovery of a sum payable under a penalty notice, the penalty is—
(a) in relation to England and Wales, to be treated for the purposes of section 98 of the Courts Act 2003 (register of judgments and orders etc) as if it were a judgment entered in the High Court, and
(b) in relation to Northern Ireland, to be treated for the purposes of Article 116 of the Judgments Enforcement (Northern Ireland) Order 1981 (S.I. 1981/226 (N.I. 6)) (register of judgments) as if it were a judgment in respect of which an application has been accepted under Article 22 or 23(1) of that Order.
(8) Any sums received by the Secretary of State by way of a monetary penalty, or interest in respect of such a penalty, under this Act must be paid into the Consolidated Fund.
(1) The Secretary of State may give a notice to a person requiring the person to pay to the Secretary of State the costs incurred by the Secretary of State in relation to the imposition of a monetary penalty on that person under section 40.
(2) A notice under subsection (1) is referred to in this Act as a cost recovery notice.
(3) The reference to “costs” in subsection (1) includes, in particular—
(a) investigation costs,
(b) administration costs,
(c) costs of obtaining expert advice (including legal advice).
(4) A cost recovery notice must specify the amount to be paid and include information as to—
(a) the grounds for giving the notice,
(b) how payment may be made,
(c) the period within which payment is to be made (which must be at least 28 days),
(d) rights of appeal,
(e) the consequences of non-payment.
(5) A person required to pay an amount to the Secretary of State under this section may require the Secretary of State to give a detailed breakdown of that amount.
(6) Costs imposed under this section are to be paid out of—
(a) the partnership assets where imposed on a partnership, and
(b) the funds of the association where imposed on an unincorporated association other than a partnership.
46 Review, variation and revocation of cost recovery notice
(1) The Secretary of State must keep a cost recovery notice under review and may vary or revoke it as the Secretary of State considers appropriate.
(2) If a cost recovery notice is revoked under this section, the Secretary of State must, as soon as practicable, give a notice to the person to whom the cost recovery notice was given.
(3) If the costs, or the period within which the costs are to be paid, is varied under this section, the Secretary of State must, as soon as practicable, give a notice to the person to whom the cost recovery notice was given which—
(a) states the variation and the reasons for the variation,
(b) includes information about rights of appeal and consequences of non-payment.
(4) A notice under subsection (3) is referred to in this Act as a cost variation notice.
(1) Subsections (2) to (8) apply if some or all of the costs payable under a cost recovery notice are unpaid by the time when they are required to be paid.
(2) The unpaid balance carries interest from time to time at the rate for the time being specified in section 17 of the Judgments Act 1838.
(3) Where the Secretary of State considers it appropriate to do so, the Secretary of State may require so much of the costs as have not already been paid to be paid immediately.
(4) The Secretary of State may recover from the person any of the costs and any interest as has not been paid if—
(a) no appeal relating to the costs has been brought under section 51 during the period within which such an appeal may be brought, or
(b) an appeal has been determined or withdrawn.
(5) In England and Wales, and in Northern Ireland, the costs are recoverable as if they were payable under an order of the High Court.
(6) In Scotland, the costs may be enforced in the same manner as an extract registered decree arbitral bearing a warrant for execution issued by the sheriff court of any sheriffdom in Scotland.
(7) Where action is taken under this section for the recovery of a sum payable under a cost recovery notice, the costs are—
(a) in relation to England and Wales, to be treated for the purposes of section 98 of the Courts Act 2003 (register of judgments and orders etc) as if they were a judgment entered in the High Court, and
(b) in relation to Northern Ireland, to be treated for the purposes of Article 116 of the Judgments Enforcement (Northern Ireland) Order 1981 (S.I. 1981/226 (N.I. 6)) (register of judgments) as if they were a judgment in respect of which an application has been accepted under Article 22 or 23(1) of that Order.
(8) Any sums received by the Secretary of State by way of costs, or interest in respect of such costs, under this Act must be paid into the Consolidated Fund.
(1) A person's duty to comply with a requirement to which the person is subject under or by virtue of an information notice, an attendance notice, an interim order or a final order is enforceable by civil proceedings by the Secretary of State for an injunction, or for specific performance of a statutory duty under section 45 of the Court of Session Act 1988, or for any other appropriate relief or remedy.
(2) Subsection (1) applies whether or not the person is in the United Kingdom.
49 Procedure for judicial review of certain decisions
(1) This section applies to a claim for judicial review of a relevant decision.
(2) A “relevant decision” means—
(a) a decision or action under or by virtue of any of the following provisions, but not including any such decision or action that is directly related to a Part 3 function of the Secretary of State—
(i) section 19,
(ii) section 20,
(iii) section 21,
(iv) section 54(1) and (2)(a),
(v) section 54(6) to (8), insofar as the decision or action is related to the disclosure of information under section 54(2)(a),
(vi) section 55(1) and (3), insofar as the decision or action is related to the disclosure of information under section 54(2)(a),
(vii) section 56,
(viii) section 57, other than a decision or action related to the disclosure of information under section 54(2)(b) to (f) or (3),
(b) a decision or action under or by virtue of section 54(9), insofar as the decision or action is related to a decision or action falling within paragraph (a)(iv) or (v),
(c) a decision or action under or by virtue of—
(i) any provision of Part 1 of this Act not mentioned in paragraph (a),
(ii) Part 2 of this Act,
(iii) section 53, or
(iv) section 62,
and “action” includes a failure to act.
(3) A “Part 3 function” means a function under or by virtue of this Part of this Act.
(4) The court may entertain proceedings for a claim to which this section applies only if the claim form is filed before the end of the period of 28 days beginning with the day after the day on which the grounds to make the claim first arose, unless the court considers that exceptional circumstances apply.
(5) In the application of this section to Scotland—
(a) subsection (1) has effect with the substitution of “ an application to the supervisory jurisdiction of the court in respect ” for “a claim for judicial review”,
(b) subsection (4) has effect with the substitution of—
(i) “an application” for “a claim”,
(ii) “application is made” for “claim form is filed”,
(iii) “the application” for “the claim”.
(6) In the application of this section to Northern Ireland—
(a) subsection (1) has effect with the substitution of “ an application ” for “a claim”,
(b) subsection (4) has effect with the substitution of—
(i) “an application” for “a claim”,
(ii) “application for leave to apply for judicial review” for “claim form is filed”,
(iii) “the application” for “the claim”.
(7) In this section “the court” means—
(a) the High Court in England and Wales,
(b) the Court of Session in Scotland, and
(c) the High Court in Northern Ireland.
(1) A person who is given a penalty notice or a variation notice may appeal to the court.
(2) A person may not appeal under this section after the end of the period of 28 days beginning with the day after the day on which the notice is given to the person.
(3) On an appeal against a penalty notice the court may—
(a) confirm or quash the decision to impose the monetary penalty,
(b) confirm or reduce the amount of the penalty,
(c) confirm or vary the period within which all or part of the penalty is to be paid.
(4) On an appeal against a variation notice the court may confirm, vary or quash the variation but may not increase the amount of the monetary penalty.
(5) In this section “the court” means—
(a) the High Court in England and Wales,
(b) the Court of Session in Scotland, and
(c) the High Court in Northern Ireland.
(6) Where an appeal is brought under this section, the monetary penalty is not payable until the appeal is determined or withdrawn, unless the court orders otherwise.
(1) A person given a cost recovery notice or a cost variation notice may appeal to the court.
(2) A person may not appeal under this section after the end of the period of 28 days beginning with the day after the day on which the notice is given to the person.
(3) On an appeal against a cost recovery notice the court may—
(a) confirm or quash the decision to impose costs,
(b) confirm or reduce the amount payable,
(c) confirm or vary the period within which payment is to be made.
(4) On an appeal against a cost variation notice the court may confirm, vary or quash the variation but may not increase the amount payable.
(5) In this section “the court” means—
(a) the High Court in England and Wales,
(b) the Court of Session in Scotland, and
(c) the High Court in Northern Ireland.
(6) Where an appeal is brought under this section, the costs are not payable until the appeal is determined or withdrawn, unless the court orders otherwise.
52 Extra-territorial application and jurisdiction to try offences
(1) Sections 32, 33, 34 and 35 apply—
(a) whether the offence is committed in the United Kingdom or elsewhere,
(b) if the offence is committed by an individual, whatever the nationality of the individual committing the offence,
(c) if the offence is committed otherwise than by an individual, regardless of whether the body corporate or unincorporated association is formed or recognised under the law of a country or territory outside the United Kingdom.
(2) Where an offence under this Part is committed outside the United Kingdom—
(a) proceedings for the offence may be taken at any place in the United Kingdom, and
(b) the offence may for all incidental purposes be treated as having been committed at any such place.
(3) In the application of subsection (2) to Scotland, any such proceedings against a person may be taken—
(a) in any sheriff court district in which the person is apprehended or is in custody, or
(b) in such sheriff court district as the Lord Advocate may determine.
(4) In subsection (3) “sheriff court district” is to be read in accordance with the Criminal Procedure (Scotland) Act 1995 (see section 307(1) of that Act).
(1) The Secretary of State may by regulations make provision for the procedure which must be followed when a provision of or made under this Act requires or allows a notice, order, notification or document of any kind to be given or served.
(2) The regulations may, in particular, make provision—
(a) as to the manner in which a document must be given or served,
(b) as to the address to which a document must be sent,
(c) requiring, or allowing, a document to be sent electronically,
(d) for treating a document as having been given, received or served on a date or at a time determined in accordance with the regulations,
(e) as to what must, or may, be done if a sender or an intended recipient is not an individual,
(f) as to what must, or may, be done if a person is treated by virtue of Schedule 1 as holding an interest or right for the purposes of this Act,
(g) as to what must, or may, be done if a sender or an intended recipient is outside the United Kingdom.
(3) Section 7 of the Interpretation Act 1978 (service of notice by post) has effect in relation to provisions made under this Act subject to any provision made by regulations under this section.
(1) A public authority may disclose information to the Secretary of State for the purpose of facilitating the exercise by the Secretary of State of functions under this Act.
(2) The Secretary of State may disclose information received under this Act to a public authority or an overseas public authority—
(a) for the purpose of facilitating the exercise by the Secretary of State of functions under this Act,
(b) for the prevention or detection of crime,
(c) for the purposes of a criminal investigation,
(d) for the purposes of criminal proceedings,
(e) for the purposes of civil proceedings under this Act, or
(f) for the purpose of protecting national security.
(3) The Secretary of State may also disclose such information to an overseas public authority for the purpose of the exercise of corresponding functions of overseas public authorities.
(4) A person who receives information under subsection (2) or (3) may not—
(a) use the information for a purpose other than the purpose for which it was disclosed, or
(b) further disclose the information,
except with the consent of the Secretary of State (which may be general or specific).
(5) Subsection (4) does not apply to information to which section 55 applies (information received from HMRC).
(6) In deciding whether to disclose information under this section, the Secretary of State must consider whether the disclosure would prejudice, to an unreasonable degree, the commercial interests of any person concerned.
(7) In deciding whether to disclose information to an overseas public authority under this section, the Secretary of State must have regard, in particular, to the following considerations—
(a) whether the law of the country or territory to whose authority the disclosure would be made provides protection against self-incrimination in criminal proceedings which corresponds to the protection provided in any part of the United Kingdom, and
(b) whether the matter in respect of which the disclosure is sought is sufficiently serious to justify making the disclosure.
(8) Except as provided by section 57, the disclosure of information under this section does not breach—
(a) any obligation of confidence owed by the person making the disclosure, or
(b) any other restriction on the disclosure of information (however imposed).
(9) In this section—
“overseas public authority” means a person in any country or territory outside the United Kingdom which appears to the Secretary of State to exercise functions of a public nature which—
correspond to the functions of the Secretary of State under this Act, or
relate to any of the purposes mentioned in paragraphs (b) to (f) of subsection (2),
“public authority” has the same meaning as in section 6 of the Human Rights Act 1998.
(1) A person who receives information disclosed under section 54 by Her Majesty's Revenue and Customs (or anyone acting on their behalf) may not—
(a) use the information for a purpose other than the purpose mentioned in section 54(1), or
(b) further disclose the information,
except with the consent of the Commissioners for Her Majesty's Revenue and Customs (which may be general or specific).
(2) If a person discloses information in contravention of subsection (1)(b) which relates to a person whose identity—
(a) is specified in the disclosure, or
(b) can be deduced from it,
section 19 of the Commissioners for Revenue and Customs Act 2005 (offence of wrongful disclosure) applies in relation to that disclosure as it applies in relation to a disclosure of information in contravention of section 20(9) of that Act (and, accordingly, section 35 of this Act does not apply to that disclosure).
(3) Except as provided by section 57, the disclosure of information under this section does not breach—
(a) any obligation of confidence owed by the person disclosing the information, or
(b) any other restriction on the disclosure of information (however imposed).
56 Duty of CMA to provide information and assistance
The Competition and Markets Authority must give the Secretary of State—
(a) such information in its possession as the Secretary of State may by direction reasonably require to enable the Secretary of State to exercise functions under this Act,
(b) any other assistance which the Secretary of State may by direction reasonably require for the purpose of facilitating the exercise by the Secretary of State of functions under this Act and which it is within the power of the Authority to give.
(1) This section applies to a duty or power to disclose or use information where the duty or power is imposed or conferred by or under any provision of Parts 1 to 4 of this Act.
(2) A duty or power to which this section applies does not operate to require or authorise the disclosure or use of information if the disclosure or use—
(a) would contravene the data protection legislation (but the duty or power is to be taken into account in determining whether the disclosure or use would contravene that legislation), or
(b) is prohibited by any of Parts 1 to 7 of, or Chapter 1 of Part 9 of, the Investigatory Powers Act 2016.
(3) In this section “data protection legislation” has the same meaning as in the Data Protection Act 2018 (see section 3 of that Act).
For the purposes of the law relating to defamation, absolute privilege attaches to any notice or direction given, or decision, report or order made, by the Secretary of State or the Competition and Markets Authority in the exercise of functions under or by virtue of this Act.
(1) The Secretary of State must, in relation to each relevant period—
(a) prepare a report in accordance with this section, and
(b) lay a copy of it before each House of Parliament as soon as is practicable after the end of that period.
(2) Each report must provide details of—
(a) the expenditure incurred by the Secretary of State in giving, or in connection with giving, financial assistance falling within section 30,
(b) the amount of the actual or contingent liabilities of the Secretary of State at the end of the relevant period in respect of such financial assistance,
(c) the number of mandatory notices accepted,
(d) the number of mandatory notices rejected,
(e) the average number of working days—
(i) from receipt of a mandatory notice to notification of a decision to accept that notice, and
(ii) from receipt of a mandatory notice to giving written reasons for a decision to reject that notice,
(f) the sectors of the economy in relation to which mandatory notices were given,
(g) the number of voluntary notices accepted,
(h) the number of voluntary notices rejected,
(i) the average number of working days—
(i) from receipt of a voluntary notice to notification of a decision to accept that notice, and
(ii) from receipt of a voluntary notice to giving written reasons for a decision to reject that notice,
(j) the sectors of the economy in relation to which voluntary notices were given,
(k) the number of call-in notices given,
(l) the sectors of the economy in relation to which call-in notices were given,
(m) the number of final notifications given,
(n) the number of final orders made,
(o) the number of final orders varied,
(p) the number of final orders revoked.
(3) “Relevant period” means—
(a) the period beginning with the day on which this section comes into force and ending with the following 31 March, and
(b) each subsequent period of 12 months.
62 Transitional and saving provision in relation to the Enterprise Act 2002
(1) Nothing in this Act has effect in relation to anything that took place before 12 November 2020.
(2) Subsections (3) and (4) apply in relation to events which constitute a trigger event described in section 2(4), unless any action has been taken under this Act in relation to the events.
(3) If, disregarding the effect of any amendment made by this Act to the Enterprise Act 2002, the Secretary of State could, in relation to the events—
(a) give an intervention notice under section 42(2) of that Act,
(b) give a special intervention notice under section 59(2) of that Act, or
(c) give a European intervention notice under section 67(2) of that Act,
the Secretary of State may give the notice on or after the day on which this section comes into force.
(4) If any such notice is given in relation to events to which this section applies—
(a) before the day on which this section comes into force, or
(b) by virtue of subsection (3), on or after the day on which this section comes into force,
nothing in this Act has effect in relation to the events (and, accordingly, the Enterprise Act 2002 continues to have effect in relation to the events, disregarding the effect of any amendment made by this Act to that Act.)
(5) Regulations under section 66(4)(b) may make further provision for the purposes of this section.
(1) This section applies to regulations under this Act other than regulations under section 66 (commencement regulations).
(2) Regulations are to be made by statutory instrument.
(3) Regulations may contain consequential, transitional, transitory or saving provision.
(4) Subject to subsection (5), a statutory instrument containing regulations is subject to annulment in pursuance of a resolution of either House of Parliament.
(5) A statutory instrument containing (whether alone or with other provision) regulations under any of the following may not be made unless a draft of it has been laid before Parliament and approved by a resolution of each House—
(a) section 6(1),
(b) section 11(3),
(c) section 41(8).
In this Act—
“acquirer” has the meaning given by section 5(2),
“assessment period” has the meaning given in section 23,
“attendance notice” means a notice given under section 20(1),
“business” includes—
a professional practice,
an undertaking which is carried on for gain or reward,
an undertaking in the course of which goods or services are supplied otherwise than free of charge, and
references to a person carrying on business include references to a person carrying on business in partnership with one or more other persons,
“call-in notice” means a notice given under section 1(1),
“cost recovery notice” means a notice given under section 45(1),
“cost variation notice” means a notice given under section 46(3),
“final notification” has the meaning given by section 26(2),
“final order” means an order made under section 26(3),
“information notice” means a notice given under section 19(1),
“interim order” means an order made under section 25(1),
“mandatory notice” means a notice given under section 14(1),
“monetary penalty” has the meaning given by section 40(3),
“notifiable acquisition” has the meaning given by section 6(2) (and see subsection (3) of that section),
“notifiable acquisition regulations” means regulations made under section 6(1),
“penalty notice” means a notice given under section 40(1),
“penalty variation notice” means a notice given under section 42(3),
“qualifying asset” has the meaning given by section 7(4),
“qualifying entity” has the meaning given by section 7(2),
“Secretary of State” includes the Chancellor of the Duchy of Lancaster,
“the territorial sea” means the territorial sea adjacent to the United Kingdom,
“trigger event” has the meaning given by section 5(1) and includes, where the context requires, a trigger event that has not yet taken place,
“United Kingdom national” means an individual who is—
a British citizen, a British overseas territories citizen, a British National (Overseas) or a British Overseas citizen,
a person who under the British Nationality Act 1981 is a British subject, or
a British protected person within the meaning of that Act,
“validation application” has the meaning given by section 16(2),
“validation notice” means a notice given under section 15(2)(b), 16(7)(b)(ii) or 17(2) (and see section 15(3)),
“voluntary notice” means a notice given under section 18(2),
“working day”, in relation to a part of the United Kingdom, means a day other than—
a Saturday or Sunday, or
a day which is a bank holiday under the Banking and Financial Dealings Act 1971 in that or any other part of the United Kingdom.
(1) This Act may be cited as the National Security and Investment Act 2021.
(2) This Part of this Act and the following provisions of this Act (which contain powers to make regulations) come into force on the day on which this Act is passed—
(a) section 6(1),
(b) section 11(3),
(c) section 14(4),
(d) section 16(3),
(e) section 18(4),
(f) section 36(5),
(g) section 41(8),
(h) section 53(1).
(3) The rest of this Act comes into force on such day as the Secretary of State may by regulations made by statutory instrument appoint.
(4) Regulations under subsection (3) may—
(a) appoint different days for different purposes;
(b) make transitional, transitory or saving provision.
(5) This Act extends to England and Wales, Scotland and Northern Ireland, except that the amendment or repeal of any enactment has the same extent as the enactment amended or repealed.
SCHEDULE 1 Trigger events: holding of interests and rights
Section 10
Joint interests
1 If two or more persons each hold an interest or right jointly, each of them is treated as holding that interest or right.
Joint arrangements
2 (1) If interests or rights held by a person and interests or rights held by another person are the subject of a joint arrangement between those persons, each of them is treated as holding the combined interests or rights of both of them.
(2) A “joint arrangement” is an arrangement between the holders of interests or rights that they will exercise all or substantially all the rights conferred by their respective interests, or their respective rights, jointly in a way that is pre-determined by the arrangement.
Indirect holdings
3 (1) An interest or right held indirectly by a person is to be treated as held by the person.
(2) A person holds an interest or right “indirectly” if the person has a majority stake in an entity and that entity—
(a) holds the interest or right, or
(b) is part of a chain of entities—
(i) each of which (other than the last) has a majority stake in the entity immediately below it in the chain, and
(ii) the last of which holds the interest or right.
(3) For these purposes, A has a “majority stake” in B if—
(a) A holds a majority of voting rights in B,
(b) A is a member of B and has the right to appoint or remove a majority of the board of directors of B,
(c) A is a member of B and controls alone, pursuant to an agreement with other shareholders or members, a majority of the voting rights in B, or
(d) A has the right to exercise, or actually exercises, dominant influence or control over B.
(4) In the application of this paragraph to the right to appoint or remove a majority of the board of directors, an entity is to be treated as having the right to appoint a director if—
(a) a person's appointment as director follows necessarily from that person's appointment as director of the entity, or
(b) the directorship is held by the entity itself.
(5) In this paragraph—
(a) the reference to the right to appoint or remove a majority of the board of directors of an entity is to the right to appoint or remove directors holding a majority of the voting rights at meetings of the board on all or substantially all matters,
(b) the reference to the board of directors, in the case of an entity that does not have such a board, is to be read as a reference to the equivalent management body of that entity,
(c) references to “voting rights” are to be read in accordance with section 8(7).
Interests held by nominees
4 An interest held by a person as nominee for another is to be treated as held by the other (and not by the nominee).
Rights treated as held by person who controls their exercise
5 (1) Where a person controls a right, the right is to be treated as held by that person (and not by the person who in fact holds the right, unless that person also controls it).
(2) A person “controls” a right if, by virtue of any arrangement between that person and others, the right is exercisable only—
(a) by that person,
(b) in accordance with that person's directions or instructions, or
(c) with that person's consent or concurrence.
Rights exercisable only in certain circumstances etc
6 (1) Rights that are exercisable by a person only in certain circumstances are to be treated as held by the person only—
(a) when the circumstances have arisen, and for so long as they continue to obtain, or
(b) when the circumstances are within the control of the person.
(2) But rights that are exercisable by an administrator or by creditors while an entity is in relevant insolvency proceedings are not to be regarded as held by the administrator or creditors even while the entity is in those proceedings.
(3) “Relevant insolvency proceedings” means—
(a) administration within the meaning of the Insolvency Act 1986,
(b) administration within the meaning of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)), or
(c) proceedings under the insolvency law of another country or territory during which an entity's assets and affairs are subject to the control or supervision of a third party or creditor.
(4) Rights that are normally exercisable but are temporarily incapable of exercise are not for that reason to be treated as not being held.
Rights attached to shares held by way of security
7 Rights attached to shares held by way of security provided by a person are to be treated as held by that person—
(a) where apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in accordance with that person's instructions, and
(b) where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in that person's interests.
Connected persons
8 Two or more persons who are connected with each other (within the meaning given by paragraph 9 or 10) are each to be treated as holding the combined interests or rights of both or all of them.
9 (1) Two or more undertakings are connected if they are group undertakings in respect of each other.
(2) In sub-paragraph (1), “undertaking” and “group undertaking” have the same meanings as in the Companies Act 2006 (see section 1161 of that Act).
10 (1) An individual, A, is connected with another individual, B, if—
(a) A is B's spouse, civil partner or cohabitee,
(b) A is a relative of B,
(c) A is the spouse, civil partner or cohabitee of a relative of B,
(d) A is a relative of B's spouse, civil partner or cohabitee, or
(e) A is the spouse, civil partner or cohabitee of a relative of B's spouse, civil partner or cohabitee.
(2) For the purposes of sub-paragraph (1)—
(a) two persons who are living together as if they were a married couple or civil partners are cohabitees,
(b) references to a spouse, civil partner or cohabitee include a former spouse, civil partner or cohabitee, and
(c) “relative” means a brother, sister, uncle, aunt, nephew, niece, lineal ancestor or descendant (the stepchild of any person, or anyone adopted by a person, whether legally or otherwise, as their child, being regarded as a relative or taken into account to trace a relationship in the same way as that person's child).
Common purpose
11 (1) Two or more persons who share a common purpose in relation to an asset or entity are each to be treated as holding the combined interests or rights of both or all of them.
(2) The cases in which persons share a common purpose in relation to an entity include (but are not limited to) cases in which the persons co-ordinate their influence on the activities, operations, governance or strategy of the entity.
(3) The cases in which persons share a common purpose in relation to an asset include (but are not limited to) cases in which the persons co-ordinate their influence on the way in which the asset is used, and section 9(2) applies for the purposes of this sub-paragraph.
Arrangements
12 (1) In this Schedule “arrangement” includes—
(a) any scheme, agreement or understanding, whether or not it is legally enforceable, and
(b) any convention, custom or practice of any kind.
(2) But something does not count as an arrangement unless there is at least some degree of stability about it (whether by its nature or terms, the time it has been in existence or otherwise).
SCHEDULE 2 Minor and consequential amendments and revocations
Section 58
1 The Enterprise Act 2002 is amended in accordance with paragraphs 2 to 10.
2 (1) Section 23 (relevant merger situations) is amended as follows.
(2) For subsections (1) and (2) substitute—
(1) For the purposes of this Part, a relevant merger situation has been created if—
(a) two or more enterprises have ceased to be distinct enterprises at a time or in circumstances falling within section 24; and
(b) the value of the turnover in the United Kingdom of the enterprise being taken over exceeds £70 million.
(2) For the purposes of this Part, a relevant merger situation has also been created if—
(a) two or more enterprises have ceased to be distinct enterprises at a time or in circumstances falling within section 24; and
(b) as a result, one or both of the conditions mentioned in subsections (3) and (4) below prevails or prevails to a greater extent.
(3) Omit subsections (2A), (4A) and (4B).
(4) In subsection (5), for “(3), (4), (4A) or (4B)” substitute “ (3) or (4) ”.
(5) In subsection (6), for “(3), (4), (4A) and (4B)” substitute “ (3) and (4) ”.
(6) Omit subsection (10).
3 Omit section 23A.
4 In section 35(7) (questions to be decided in relation to completed mergers), for “, for the purposes of section 23(2)(b), the share of supply test is met,” substitute “ any such result as is mentioned in section 23(2)(b) has arisen, ”.
5 In section 36(6) (questions to be decided in relation to anticipated mergers), for “, for the purposes of section 23(2)(b), the share of supply test will be met,” substitute “ any such result as is mentioned in section 23(2)(b) will arise, ”.
6 In section 48(3) (cases where references or certain questions need not be decided), for “, for the purposes of section 23(2)(b), the share of supply test is or will be met,” substitute “ any such result as is mentioned in section 23(2)(b) has arisen or the question whether any such result will arise, ”.
7 In section 58 (specified considerations), omit subsections (1) and (2).
8 In section 59 (intervention by Secretary of State in special public interest cases), omit subsections (3)(b)(i), (3B), (8) and (9).
9 In section 153 (specified considerations), omit subsection (2).
10 In paragraph 20(1) of Schedule 8 (national security) omit “(within the meaning of section 58(1))”.
11 In consequence of the preceding paragraphs, the following are revoked—
(a) the Enterprise Act 2002 (Share of Supply Test) (Amendment) Order 2018 (S.I. 2018/578),
(b) the Enterprise Act 2002 (Turnover Test) (Amendment) Order 2018 (S.I. 2018/593),
(c) the Enterprise Act 2002 (Share of Supply) (Amendment) Order 2020 (S.I. 2020/748), and
(d) the Enterprise Act 2002 (Turnover Test) (Amendment) Order 2020 (S.I. 2020/763).