Recommendation 8

HM Government Accepted

8.1 We are clear on our intent to grow the UK’s Science and Technology ecosystem as set out in the Integrated Review, the R&D Roadmap and Innovation Strategy. International research collaboration is central to our position as a science superpower, and our research sector needs to be both open and secure. As an open economy, we welcome foreign trade and investment where it supports UK growth and jobs. However, we will not accept collaborations or investments which compromise our national security. It has always been the case that where we have concerns, we raise them, and where we need to intervene, we will. 8.2 The Government has taken significant steps to ensure the UK’s international partnerships remain as secure as necessary, while remaining as open as possible. The National Security and Investment Act (NSI) fully entered into force on 4 January 2022 and gives the Government powers to identify and intervene in acquisitions of control over entities and assets in or linked to the UK that could create risks to national security. This marks the biggest upgrade of investment screening in the UK in 20 years and brings the government’s powers in line with many other countries such as the US, Germany and Australia. This Act supports the UK’s world-leading reputation for being an attractive place to invest and is about ensuring investment in the UK can continue with predictability and transparency while protecting national security. 8.3 In the first three months of operation 17 transactions were called in by the Business Secretary for detailed assessment. This includes the first transaction to be blocked under NSI, Beijing Infinite Vision Technology’s acquisition of intellectual property from the University of Manchester. The Secretary of State found that, on the balance of probabilities, the acquisition presented national security risks relating to the dual-use applications of the technology and the potential that the technology could be used to build defence or technological capabilities which may present a national security threat to the UK. 8.4 The Department for Business, Energy and Industrial Strategy (BEIS) leads on administration of the Act, and the process involves collaboration with a number of government departments, including the FCDO, in order to bring sector expertise and wider knowledge to the assessment of cases. The FCDO considers the national security implications of planned deals and provides advice on foreign policy implications and diplomatic engagement. A dedicated FCDO team has been established to lead this work. The team coordinates input from overseas posts, policy leads, and the UK Intelligence Community (UKIC) to inform investment screening decisions. The team also engages on wider strategic issues such as economic security, human rights and emerging technology. 8.5 Across His Majesty’s Government we are stepping up our engagement with a range of allies and like-minded international partners to safeguard our shared security from hostile investment and ensure the NSI regime represents global best practice. We have a long history of close international cooperation in this area. Measuring FCDO progress in delivering on the Government’s leadership ambitions