Citation, commencement and extent

1.—(1) These Regulations may be cited as the National Security and Investment Act 2021 (Notifiable Acquisition) (Specification of Qualifying Entities) Regulations 2021.

(2) These Regulations come into force on 4th January 2022.

(3) These Regulations extend to England and Wales, Scotland and Northern Ireland.

Notifiable acquisitions

2.—(1) Schedules 1 to 17 specify descriptions of qualifying entity for the purposes of section 6(2) of the National Security and Investment Act 2021 (notifiable acquisitions).

(2) A qualifying entity falls within a description in the Schedules by reason of the carrying on of an activity specified in the Schedules only if it carries on the activity in the United Kingdom.

Interpretation

3.  In these Regulations—

“ the Act” means the National Security and Investment Act 2021;

“ development” means all stages prior to production, including design, design research, design analyses, design concepts, assembly and testing of prototypes, pilot production schemes, design data, process of transforming design data into goods or software, configuration design, integration design, layouts;

“ production” means all production stages, including product engineering, manufacture, integration, assembly (mounting), inspection, testing and quality assurance.

Review

4.—(1) The Secretary of State must from time to time—

(a) carry out a review of the regulatory provision contained in these Regulations; and

(b) publish a report setting out the conclusion of the review.

(2) The first report must be published before the end of the period of three years beginning with the day on which these Regulations come into force for any purpose.

(3) Subsequent reports must be published at intervals not exceeding three years.

(4) Section 30(4) of the Small Business, Enterprise and Employment Act 2015( 2) requires that a report published under this regulation must, in particular—

(a) set out the objectives intended to be achieved by the regulatory provision referred to in paragraph (1)(a);

(b) assess the extent to which those objectives are achieved;

(c) assess whether those objectives remain appropriate; and

(d) if those objectives remain appropriate, assess the extent to which they could be achieved in another way which involves less onerous regulatory provision.

(5) In this regulation, “ regulatory provision” has the same meaning as in sections 28 to 32 of the Small Business, Enterprise and Employment Act 2015 (see section 32 of that Act).

Regulation 2

SCHEDULE 1 Advanced materials

Interpretation

1.  In this Schedule—

“ 2D” means two-dimensional;

“ 3D” means three-dimensional;

“advanced composites” relates to structural composite materials with either metallic or ceramic matrices and includes 3D reinforcing architectures for any matrix (polymer, metal or ceramic);

“ advanced materials” means completely new materials and materials that are developments on traditional materials, where such materials provide any of the following—

“ enabler” means any material or process which is not a material described in paragraph 2(3) or 3 but is used in the manufacture or application of such materials;

“fabrication” in sector (7) (semiconductors) of the table set out in paragraph 3 means the process of producing a microelectronic circuit on a semiconductor substrate or using other advanced materials;

“graphene and related 2D” are those materials with attributes as defined within ISO/TS 80004-13:2017( 3);

“metamaterial”—

“ metasurface” means a two-dimensional form of metamaterial which includes one or more layers of material that are intentionally patterned or textured (irrespective of whether they are periodic or not) through a rational design-led approach;

“ nanotechnology” means the manipulation and control of matter predominantly in the nanoscale to make use of size-and-structure-dependent properties and phenomena distinct from those associated with individual atoms or molecules, or extrapolation from larger sizes of the same material (where “ manipulation and control” includes material synthesis in relation to nanotechnology) with current or potential utility for defence, including nanomaterials, nanodevices, nanocomponents and nanosystems (including nanomachines) in accordance with ISO/TR 10993-22:2017( 4);

“ nanomaterials” means materials with any external dimension in the nanoscale or having internal structure or surface structure in the nanoscale and include nano-objects, dispersions or mixtures containing nano-objects, and nanostructured material (including structuring at an interface between materials, including air, and within a material) in accordance with ISO/TR 10993-22:2017;

“packaging” in sector (7) (semiconductors) of the table set out in paragraph 3 means the process of turning a microelectronic circuit on an appropriate substrate into a package suitable for use in an electronic circuit but does not include the assembly and packaging of chips and devices into circuit boards;

“photonic and optoelectronic materials and devices” in sector (8) of the table set out in paragraph 3 relate to high power lasers that are characterised by a combination of power at the output apertures (values of 1 kilowatt and above), beam quality (M²of less than 1.2), intended operating ranges (greater than 1 kilometre) and at wavelengths compatible with propagation over those distances (typically 1 micrometre to 2 micrometres wavelengths);

“ semiconductor” means—

“ technical textiles” means textiles (and their processes and enablers) specifically developed for their functional performance including additional functionality (such as integrated computing, processing or data transmission), 3D architectures, protection against blast and ballistic events but does not include sportswear or clothing that is ordinarily available to consumers or household goods.

Activities

2.—(1) A qualifying entity carrying on activities that consist of or include any of the activities set out in sub-paragraph (2) in relation to—

(a) any of the matters described in sub-paragraph (3); or

(b) any of the matters described in relation to the sectors set out in paragraph 3.

(2) The activities referred to in sub-paragraph (1) are—

(a) research;

(b) development or production;

(c) development or production of anything designed as an enabler;

(d) development or production of anything designed to be used for the purpose of production;

(e) the provision of qualified or certified designs, materials, parts or products;

(f) owning, creating, supplying or exploiting intellectual property;

(g) provision of know-how or services of enablers;

(h) recycling or re-using.

(3) The matters referred to in sub-paragraph (1)(a) are materials, the export or transfer of which is controlled by virtue of their being specified in—

(a) Schedule 2 to the Export Control Order 2008( 5); or

(b) Annex I and Annex IV to Council Regulation (EC) No 2009/428 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items( 6).

Sectors and matters

3.  The following Table sets out the sectors and matters referred to in paragraph 2(1)(b).

Regulation 2

SCHEDULE 2 Advanced robotics

Interpretation

1.  In this Schedule—

“ cognitive” means having the abilities of reasoning, perception, communication, learning, planning, problem solving, abstract thinking, decision making or organisation;

“ core components” means—

Activities – advanced robotics

2.  A qualifying entity carrying out any of the following activities—

(a) developing advanced robotics;

(b) producing advanced robotics;

(c) developing or producing core components specially designed or modified for use in advanced robotics.

Advanced robotics

3.  Subject to paragraph 6, “ advanced robotics” means a machine that meets either or both the descriptions set out in paragraph 4 and is capable of carrying out multifunctional physical actions, including positioning or orientating materials, parts, tools, special devices or itself through variable movements in three-dimensional space.

Description of advanced robotics

4.  The descriptions referred to in paragraph 3 are—

(a) having the characteristic of autonomy set out in paragraph 5; and

(b) being capable of using its sensors to carry out sophisticated surveillance and data collection in respect of any aspects of its environment in order to collect, store or communicate to the operator, significant volumes of high-fidelity data.

Characteristic of autonomy

5.—(1) Advanced robotics has the characteristic of autonomy where it is capable of performing actions—

(a) independent of human control; or

(b) independent of human control but complemented by—

(i) manual (including tele-operation) control;

(ii) pre-programmed operations or controls; or

(iii) control derived from other robotics or software control systems.

(2) The characteristics of autonomy may include either or both of the following—

(a) using physical, sensory and cognitive capabilities in combination, to decide on and implement a course of action that will vary depending on—

(i) the environment; or

(ii) the behaviour, dynamics, properties or arrangement of objects in the environment, which may include the ability to self-navigate or react to stimuli or changes in order to improve performance; or

(b) adapting or learning by carrying out actions to improve the performance of tasks from iteration and experience, which may include—

(i) the ability to self-heal;

(ii) the capability to identify and repair damaged robotics or components; or

(iii) having soft robotics capabilities (robotics made from compliant materials that mimic capabilities in living organisms that enable them to adapt or respond to their surroundings).

Exclusions

6.—(1) Subject to sub-paragraph (2), “ advanced robotics” does not include—

(a) machines containing robotic systems that are readily available for purchase by consumers, including robotic toys, domestic appliances described as “smart”, vacuum cleaning robots and consumer-focussed drones, where “ consumer” means an individual acting for purposes that are wholly or mainly outside of that individual’s trade, business or craft;

(b) industrial automation systems that use mechanical tools performing repetitive functions with very basic or no sensors or cognitive ability, including—

(i) simple sensing or imaging devices that do not confer any ability to react or change their behaviour given a change in circumstances, without human intervention;

(ii) devices that carry out functions that require pre-set sequences of actions or require pre-set sensing of the environment;

(c) smart speakers or similar devices lacking end effectors or locomotion.

(2) The description of exceptions set out in sub-paragraph (1)(a) does not include self-driving vehicles.

Regulation 2

SCHEDULE 3 Artificial intelligence

Interpretation

1.  In this Schedule—

“ artificial intelligence” means technology enabling the programming or training of a device or software to—

• with a view to achieving a specific objective;

“ advanced robotics” has the same meaning as in Schedule 2;

“ cognitive abilities” means reasoning, perception, communication, learning, planning, problem solving, abstract thinking, decision-making or organisation;

“ cyber security” means the activities necessary to protect network and information systems, the users of such systems, and other persons affected by cyber threats;

“ cyber threat” means any potential circumstance, event or action that could damage, disrupt or otherwise adversely affect network and information systems, the users of such systems and other persons;

“ network and information system” has the same meaning as in regulation 1 of the Network and Information Systems Regulations 2018( 7);

“ technology” has the same meaning as in Schedule 2 to the Export Control Order 2008( 8).

Activities – artificial intelligence

2.—(1) A qualifying entity carrying on any of the following activities for one or more of the purposes set out in sub-paragraph 2—

(a) research into artificial intelligence; or

(b) developing or producing goods, software or technology that use artificial intelligence.

(2) The purposes are—

(a) the identification or tracking of objects, people or events;

(b) advanced robotics;

(c) cyber security.

Regulation 2

SCHEDULE 4 Civil nuclear

Activity - civil nuclear

1.  A qualifying entity carrying on activities that consist of or include any of the following—

(a) subject to paragraph 2, holding a nuclear site licence granted in accordance with section 3 of the Nuclear Installations Act 1965( 9) or applying for such a licence;

(b) subject to paragraph 2, being a tenant on a site in respect of which a nuclear site licence has been granted in accordance with section 3 of the Nuclear Installations Act 1965;

(c) holding either or both Category I/II or Category III nuclear material as defined in regulation 3(3) and (4) of the Nuclear Industries Security Regulations 2003( 10);

(d) being a Class A carrier or a Class B carrier of nuclear material as approved under regulation 14 of the Nuclear Industries Security Regulations 2003( 11);

(e) being in receipt of an order granting development consent under the Planning Act 2008( 12) in relation to a nuclear reactor (as defined in section 26(1) of the Nuclear Installations Act 1965), or applying for such development consent;

(f) being, or having been, required to pay a fee to the Office for Nuclear Regulation under regulation 16(1) of the Health and Safety and Nuclear (Fees) Regulations 2021( 13), where the outcome of the assessment for which that fee is to be, or has been, paid has not been determined;

(g) holding any equipment, software or information to which regulation 2(3) or (4), of the Uranium Enrichment Technology (Prohibition on Disclosure) Regulations 2004 applies( 14);

(h) holding sensitive nuclear information as defined in section 77(7) of the Anti-Terrorism, Crime and Security Act 2001( 15);

(i) being given financial support under section 5 of the Science and Technology Act 1965( 16), or under section 93 of the Higher Education and Research Act 2017( 17), for or in relation to nuclear reactors (as defined in section 26 of the Nuclear Installations Act 1965).

Exclusion

2.  Paragraph 1(a) or (b) do not apply where the site to which the nuclear site licence relates is controlled or operated wholly or mainly for defence purposes as defined in section 70(3) of the Energy Act 2013( 18).

Regulation 2

SCHEDULE 5 Communications

Interpretation

1.  In this Schedule—

“ cable landing station” means a cable landing station for a submarine cable system;

“ electronic communications service” has the meaning given by section 32(2) of the Communications Act 2003( 19)

“ public electronic communications network” means a public electronic communications network as defined by section 151(1) of the Communications Act 2003( 20) and includes a submarine cable system that is provided for purposes which include the purpose of making electronic communications services available to the public;

“ public electronic communications service” means a public electronic communications service as defined by section 151(1) of the Communications Act 2003( 21), and includes an electronic communications service that is provided by means of a submarine cable system so as to be available for use by members of the public;

“ submarine cable system” means a system of fibre optic cables which—

Public electronic communications providers

2.—(1) A qualifying entity which—

(a) carries on activities which consist of or include either or both of the following—

(i) providing a public electronic communications network;

(ii) providing a public electronic communications service; and

(b) meets the turnover condition in sub-paragraph (2).

(2) The turnover condition is that the turnover of the entity’s relevant business for the relevant period is at least £50,000,000.

(3) In sub-paragraph (2)—

(a) “ relevant business” means so much of any business carried on in the United Kingdom by the entity in question or any of its associated entities as consists of either or both of the following—

(i) the provision of a public electronic communications network;

(ii) the provision of a public electronic communications service;

(b) “ relevant period” means—

(i) the period of one year ending with the 31st March last before the time when a person gains control of the qualifying entity, by virtue of one or more of the cases described in subsection (2), (5) or (6) of section 8 of the Act; and

(ii) in the case of an entity which at that time has been carrying on that business for a period of less than a year, the period, ending with that time, during which it has been carrying it on.

(4) For the purposes of sub-paragraph (3)(a), another qualifying entity is an associated entity of the entity in question if—

(a) the entity in question owns, or has a controlling interest in, the other qualifying entity;

(b) the other qualifying entity owns, or has a controlling interest in, the entity in question; or

(c) a person or group of persons owns, or has a controlling interest in, both entities.

(5) For the purposes of sub-paragraph (4), a person has a controlling interest in a qualifying entity if the person holds more than 50% of the shares or voting rights in the entity; and subsections (3), (4), and (7) of section 8 of the Act apply for the interpretation of this sub-paragraph.

(6) For the purposes of this paragraph—

(a) turnover is to be calculated in conformity with accounting practices and principles which are generally accepted in the United Kingdom;

(b) turnover is to be limited to the amounts derived by an entity from the relevant business after deduction of sales rebates, value added tax and other taxes directly related to amounts so derived;

(c) where the relevant business of the entity in question is carried on by two or more entities that each prepare accounts the turnover shall be calculated by adding together the turnover of each, except that no account shall be taken of any turnover resulting from the supply of goods or the provision of services between them.

Associated facilities

3.—(1) A qualifying entity carrying on activities which consist of or include the making available of anything that—

(a) is an associated facility by reference to a qualifying network or qualifying service; and

(b) is not excluded by sub-paragraph (2) or (3).

(2) An associated facility consisting of a building or an entry to a building is excluded by this sub-paragraph unless the main purpose of the building is to host a network element that is active.

(3) An associated facility other than a building or an entry to a building is excluded by this sub-paragraph if the associated facility is an element (such as a pipe, mast, duct, antenna installation, tower or pole) which—

(a) is not itself active; and

(b) is designed merely to host either or both of the following—

(i) other network elements that are not active;

(ii) cables (including strands of optical fibre).

(4) In this paragraph—

“ associated facility” has the meaning given by section 32(3) of the Communications Act 2003( 22) but as if the reference in that provision to a “facility, element or service” included a reference to a cable landing station;

“ qualifying network” means a public electronic communications network provided by a qualifying entity falling within paragraph 2;

“ qualifying service” means a public electronic communications service provided by a qualifying entity falling within paragraph 2.

Repair or maintenance of submarine cable systems or cable landing stations

4.—(1) A qualifying entity carrying on activities which consist of or include the provision of services for the repair or maintenance of—

(a) a submarine cable system (in the United Kingdom or elsewhere) forming part of a public electronic communications network that—

(i) is provided in the United Kingdom by a qualifying entity falling within paragraph 2; or

(ii) interconnects with a public electronic communications network provided in the United Kingdom by a qualifying entity falling within paragraph 2; or

(b) a cable landing station in the United Kingdom that is used in connection with a public electronic communications network or public electronic communications service provided in the United Kingdom by a qualifying entity falling within paragraph 2.

(2) In this paragraph “ interconnect” is to be read in accordance with section 151(2) of the Communications Act 2003.

Information systems

5.—(1) A qualifying entity carrying on activities that consist of or include supplying to persons in the United Kingdom services which consist of or include one or more of the following—

(a) providing a top-level domain name registry which, in any relevant 168-hour period, serviced 14 billion or more queries from devices located in the United Kingdom for domains registered within the Internet Corporation for Assigned Names and Numbers;

(b) providing a domain name system resolver service which, in any relevant 168-hour period, serviced 500,000 or more different Internet Protocol addresses used by persons in the United Kingdom;

(c) providing a domain name system authoritative hosting service servicing 100,000 or more domains registered to persons with an address in the United Kingdom.

(2) A qualifying entity which—

(a) carries on activities which consist of or include supplying to persons in the United Kingdom services which consist of or include providing an internet exchange point; and

(b) has 30% or more of the market share among operators of internet exchange points in the United Kingdom in terms of interconnected autonomous systems.

(3) In this paragraph—

“ domain name system” has the meaning given to “Domain Name System” in paragraph 10(5)(a) of Schedule 2 to the Network and Information Systems Regulations 2018( 23);

“ internet exchange point” has the meaning given in paragraph 10(5)(c) of Schedule 2 to the Network and Information Systems Regulations 2018;

“ relevant 168-hour period” means any consecutive period of 168 hours falling within the 12 months ending with the time when a person gains control of the qualifying entity by virtue of one or more of the cases described in subsection (2), (5) or (6) of section 8 of the Act;

“ top-level domain name registry” has the meaning given in paragraph 10(5)(d) of Schedule 2 to the Network and Information Systems Regulations 2018.

Regulation 2

SCHEDULE 6 Computing hardware

Interpretation

1.  In this Schedule—

“ computer processing unit” means—

“ fabrication” means the process of producing a microelectronic circuit on a semiconductor substrate or using other advanced materials;

“ packaging” means the process of turning a microelectronic circuit on an appropriate substrate into a package suitable for use in an electronic circuit but does not include the assembly and packaging of chips and devices into circuit boards;

“ roots of trust” means hardware, firmware or software components that are inherently trusted to perform critical security functions.

Activity – computing hardware

2.   A qualifying entity whose activities consist of one or more of the activities set out in paragraph 3.

3.  The activities referred to in paragraph 2 are—

(a) the ownership, creation, supply or exploitation of intellectual property relating to any of the following—

(i) computer processing units;

(ii) architectural, logical or physical designs for such units;

(iii) the instruction set architecture for such units;

(iv) code, written in a low-level language, that can control how such units operate;

(v) integrated circuits with the purpose of providing memory;

(b) the design, maintenance or delivery of a service for the secure provisioning or management of either or both of the following—

(i) roots of trust of computer processing units;

(ii) code, written in a low level language, that can control how such units operate;

(c) the fabrication or packaging of either or both of the following—

(i) computer processing units;

(ii) integrated circuits with the purpose of providing memory.

Regulation 2

SCHEDULE 7 Critical suppliers to government

Interpretation

1.  In this Schedule—

“ government” has the same meaning as “ contracting authorities” in regulation 2 of the Public Contracts Regulations 2015( 24);

“ relevant public contract” means a contract for pecuniary interest between one or more persons and government, where the contract has as its object the execution of works, the supply of products or the provision of services.

Activity – critical suppliers to government

2.  A qualifying entity being a party to a relevant public contract where the contract contains one or more of the features set out in paragraph 2.

3.  The features referred to in paragraph 1 are—

(a) either or both the processing or storage of material to which a security classification of SECRET or TOP SECRET has been applied in accordance with the document titled “Government Security Classifications Version 1.1 – May 2018”( 25) published by the Cabinet Office;

(b) a requirement to have List X accreditation as described in the document titled “Security Requirements for List X Contractors Version 10.0 – April 2014” published by the Cabinet Office( 26);

(c) a requirement for employees of the qualifying entity to be vetted at or above ‘Security Check’ level as described in guidance titled “National security: vetting clearance levels” published on 12 February 2020( 27) by the United Kingdom Security Vetting.

Regulation 2

SCHEDULE 8 Cryptographic authentication

Interpretation

1.  In this Schedule—

“ consumer” means an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession;

“ authentication” means verifying—

“ cryptography” means the discipline which embodies principles, means and methods for the transformation of data in order to hide its information content, prevent its undetected modification or prevent its unauthorised use and is limited to the transformation of information using one or more secret parameters or associated key management;

“ secret parameter” means a variable, constant or key kept from the knowledge of others or shared only within a group.

Activity – cryptographic authentication

2.  A qualifying entity carrying on activities consisting of or including research into, developing or producing, any product which—

(a) has authentication as a primary function;

(b) employs cryptography in performing that function; and

(c) is not ordinarily supplied to or made available for acquisition by consumers.

Regulation 2

SCHEDULE 9 Data infrastructure

Interpretation

1.  In this Schedule—

“ administrative access” refers to either or both authorisation or access granted via either or both logical or administrative access controls by virtue of which an entity may access relevant data infrastructure or control access to relevant data infrastructure where such access would otherwise be restricted or compartmented and where such access would permit the modification of the relevant data infrastructure in a way that was not authorised;

“ electronic communications network” has the meaning given in section 32(1) of the Communications Act 2003( 28);

“ public electronic communications network” has the meaning given in section 151(1) of the Communications Act 2003;

“ public electronic communications service” has the meaning given in section 151(1) of the Communications Act 2003;

“ public sector authority” means an authority listed in paragraph 2;

“ relevant activity” means storing, processing or transmitting data in digital form which are used in connection with the administration and operation of a public sector authority;

“relevant data infrastructure” is physical or virtualised infrastructure, which—

“ specialist or technical services” means either or both—

“ submarine cable system” means a system of fibre optic cables which—

Interpretation – public sector authority

2.  The authorities referred to in the definition of a “public sector authority” in paragraph 1 are set out in the following Table.

Activity – data infrastructure

3.  A qualifying entity carrying on any of the activities set out in paragraph 4.

4.  The activities referred to in paragraph 3 are—

(a) owning or operating relevant data infrastructure;

(b) managing relevant data infrastructure on behalf of other entities;

(c) managing facilities where relevant data infrastructure is located;

(d) providing specialist or technical services to entities carrying on activities described in sub-paragraphs (a), (b) or (c), which give the entity providing those specialist or technical services physical access to relevant data infrastructure;

(e) providing services where the provision of such services gives the entity providing those services administrative access to relevant data infrastructure;

(f) producing or developing software designed for use in the services in sub-paragraph (e) which configures or manages the provision of administrative access.

Regulation 2

SCHEDULE 10 Defence

Interpretation

1.  In this Schedule—

“ defence” has the meaning given to it by section 2(4) of the Official Secrets Act 1989( 29); and

“ government contractor” has the meaning given to it by section 12 of the Official Secrets Act 1989.

Activity - defence

2.  A qualifying entity carrying on activities that comprise or include the research, development, production, creation or application of goods or services which are used or provided for defence or national security purposes where that entity meets a condition in paragraph 3.

3.  The conditions referred to in paragraph 2 are that the entity—

(a) is a government contractor or any sub-contractor in a chain of sub-contractors which begins with the government contractor which provides goods or services within the scope of paragraph 2; or

(b) has been notified by or on behalf of the Secretary of State of information, documents or other articles of a classified nature which the entity or an employee of the entity may hold or receive relating to the activities within the scope of paragraph 2.

Regulation 2

SCHEDULE 11 Energy

Interpretation

1.  In this Schedule—

“ aggregation” means combining multiple customer loads or generated electricity for sale, purchase or auction in the electricity market of Great Britain;

“ downstream oil activity” means any of the following activities—

“ existing upstream petroleum facility” means an upstream petroleum facility that began operating before the first day of the month that is 12 calendar months before the month in which a person gains control, by virtue of one or more of the cases described in subsection (2), (5) or (6) of section 8 of the Act, of the qualifying entity;

“ gas” means any substance which is or (if it were in a gaseous state) would be gas within the meaning set out in section 48(1) of the Gas Act 1986;( 30)

“ gas interconnector” has the meaning set out in section 5(8) of the Gas Act 1986( 31);

“ gas processing facility” has the meaning set out in section 90(1) of the Energy Act 2011( 32);

“ gas processing operation” has the meaning set out in section 90(2) of the Energy Act 2011;

“ generate” in relation to electricity means carrying on an act within section 4(1)(a) of the Electricity Act 1989( 33);

“ generating asset” means an asset used to generate electricity;

“ group undertaking” has the meaning set out in section 1161(5) of the Companies Act 2006( 34);

“ LNG import or export facility” has the meaning set out in section 12(6) of the Gas Act 1995( 35) but does not include facilities in the territorial sea adjacent to Great Britain or the sea in any area designated under section 1(7) of the Continental Shelf Act 1964( 36);

“ new upstream petroleum facility” means an upstream petroleum facility that had not begun operating before the first day of the month that is 12 calendar months before the month in which a person gains control, by virtue of one or more of the cases described in subsection (2), (5) or (6) of section 8 of the Act, of the qualifying entity;

“ oil equivalent” means petroleum and, for the purposes of assessments of throughput, where petroleum is in a gaseous state 1,100 cubic meters of this petroleum at a temperature of 15 degrees Celsius and pressure of one atmosphere is counted as equivalent to one tonne;

“ petroleum” has the same meaning as in Part 1 of the Petroleum Act 1998( 37), and includes petroleum that has undergone any processing;

“ petroleum licence” means a licence granted under section 3 of the Petroleum Act 1998( 38) or section 2 of the Petroleum (Production) Act 1934( 39);

“ petroleum production project” has the meaning set out in section 90(2) of the Energy Act 2011;

“ terminal” has the meaning set out in section 90(2) of the Energy Act 2011, but does not include gas processing facilities in the United Kingdom or LNG import or export facilities;

“ upstream petroleum facility” means a terminal, upstream petroleum pipeline or unit of infrastructure that is or will be necessary to a petroleum production project;

“ upstream petroleum pipeline” has the meaning set out in section 90(2) of the Energy Act 2011, but does not include gas interconnectors.

Activity - energy

2.   A qualifying entity carrying on any of the activities set out in paragraph 3.

3.  The activities referred to in paragraph 2 are—

(a) in respect of any existing upstream petroleum facility that meets the conditions set out in paragraph 4(2)—

(i) owning;

(ii) operating;

(iii) holding a petroleum licence in respect of; or

(iv) where the qualifying entity meets the condition set out in paragraph 4(3), enabling the operation of;

(b) in respect of any new upstream petroleum facility that meets the conditions set out in paragraph 4(4)—

(i) owning;

(ii) operating;

(iii) holding or applying for a petroleum licence in respect of; or

(iv) where the qualifying entity meets the condition set out in paragraph 4(5)—

(aa) developing;

(bb) enabling the operation of; or

(cc) enabling the development of;

(c) holding a transmission licence, distribution licence or interconnector licence under section 6 of the Electricity Act 1989( 40) or carrying on any activity in pursuance of an exemption from section 4(1)(b), 4(1)(bb) or 4(1)(d) of the Electricity Act 1989 granted to the qualifying entity by order under section 5(1) of the Electricity Act 1989( 41);

(d) where the qualifying entity meets the condition set out in paragraph 4(6)—

(i) holding a generation licence under section 6 of the Electricity Act 1989 or carrying on any activity in pursuance of an exemption from section 4(1)(a) of the Electricity Act 1989 granted to the qualifying entity by order under section 5(1) of the Electricity Act 1989; or

(ii) carrying on aggregation;

(e) holding a licence under section 7 or 7ZA of the Gas Act 1986( 42) or carrying on any activity in pursuance of an exemption from sections 5(1)(a) or 5(1)(aa) of the Gas Act 1986 ( 43) granted to the qualifying entity by order under section 6A(1) of the Gas Act 1986( 44);

(f) owning or operating—

(i) any gas processing facility in Great Britain that meets the condition set out in paragraph 4(8); or

(ii) any LNG import or export facility that meets the condition set out in paragraph 4(9);

(g) where the qualifying entity meets the conditions set out in paragraph 4(10), supplying petroleum-based road, aviation or heating fuels (including liquefied petroleum gas) to persons in the United Kingdom.

Conditions

4.—(1) This paragraph sets out the conditions referred to in paragraph 3.

(2) The conditions referred to in paragraph 3(a) are that the existing upstream petroleum facility—

(a) has a throughput of greater than 3,000,000 tonnes of oil equivalent over the 12 calendar months preceding the month in which a person gains control, by virtue of one or more of the cases described in subsection (2), (5) or (6) of section 8 of the Act, of the qualifying entity; and

(b) is—

(i) situated in whole or in part in the United Kingdom; or

(ii) used in connection with the supply of petroleum to persons in the United Kingdom.

(3) The condition referred to in paragraph (3)(a)(iv) is that the qualifying entity is an owner or operator of the existing upstream petroleum facility.

(4) The conditions referred to in paragraph 3(b) are that the new upstream petroleum facility—

(a) has an expected throughput of greater than 3,000,000 tonnes of oil equivalent in its first 12 calendar months of operation; and

(b) is or will be—

(i) situated in whole or in part in the United Kingdom; or

(ii) used in connection with the supply of petroleum to persons in the United Kingdom.

(5) The condition referred to in paragraph 3(b)(iv) is that the qualifying entity is or will be an owner or operator of the new upstream petroleum facility.

(6) The condition referred to in paragraph 3(d) is that—

(a) the qualifying entity is an owner or operator of any individual generating asset that has a total installed capacity equal to or greater than 100 megawatts; or

(b) the relevant capacity of the qualifying entity is equal to or greater than one gigawatt.

(7) For the purposes of sub-paragraph (6)(b), the “relevant capacity” of the qualifying entity is the total of—

(a) the total installed capacity of any generating assets owned or operated by the qualifying entity;

(b) the total installed capacity of any generating assets owned or operated by the acquirer or group undertakings of the acquirer;

(c) the amount of customer load and generated electricity available to the qualifying entity for aggregation; and

(d) the amount of customer load and generated electricity available to the acquirer or group undertakings of the acquirer for aggregation.

(8) The condition referred to in paragraph 3(f)(i) is that the gas processing facility has the technological capacity to carry on gas processing operations in relation to greater than 6 million cubic metres of gas per day.

(9) The condition referred in paragraph 3(f)(ii) is that the LNG import or export facility has the technological capacity to carry on the importation, regasification or liquefaction of greater than 6 million cubic metres of gas per day.

(10) The conditions referred to in paragraph 3(g) are that—

(a) the qualifying entity carries on any downstream oil activity; and

(b) the qualifying entity—

(i) has capacity of greater than 500,000 tonnes; or

(ii) owns a facility in the United Kingdom that has capacity of greater than 50,000 tonnes.

(11) For the purposes of sub-paragraph (10)—

(a) a qualifying entity “has capacity of greater than” a specified number of tonnes if any downstream oil activity was carried on in the United Kingdom by that qualifying entity in relation to greater than that number of tonnes of oil in at least one of the three calendar years preceding the year in which a person gains control, by virtue of one or more of the cases described in subsection (2), (5) or (6) of section 8 of the Act, of the qualifying entity; and

(b) a facility “has capacity of greater than” a specified number of tonnes if it was used for the purposes of any downstream oil activity in relation to greater than that number of tonnes of oil in at least one of the three calendar years preceding the year in which a person gains control, by virtue of one or more of the cases described in subsection (2), (5) or (6) of section 8 of the Act, of the qualifying entity.

Regulation 2

SCHEDULE 12 Military and dual-use

Interpretation

1.  In this Schedule—

“restricted goods” and “restricted technology” are respectively goods and technology, including software or information (other than information in the public domain), the export or transfer of which is controlled by virtue of their being specified in the relevant export control legislation;

“ relevant export control legislation” means—

Activity - military and dual-use

2.  A qualifying entity carrying on activities that consist of or include researching, developing or producing restricted goods or restricted technology.

Regulation 2

SCHEDULE 13 Quantum technologies

Interpretation

1.  In this Schedule—

“ quantum technology” means—

“ quantum communications” means—

“ quantum connectivity” means the ways in which quantum coherence, during processes such as transmission, propagation or amplification, is preserved;

“ quantum imaging” means using the phase or amplitude properties of quantum mechanics, specifically superposition, entanglement, the use of sub-Poissonian sources or detectors of photons or a combination of these, to create images of objects;

“ quantum information processing, computing or simulation” means—

“ quantum navigation” means using phase properties of quantum mechanics, specifically measurements of atoms or ions, or atom-ion interferometry, to establish the location or inertia of, and to guide, objects;

“ quantum resistant cryptography” means methods of securing information or data being transmitted or stored, with a view to resisting attack by a quantum computing or simulation device;

“ quantum sensing” means utilising the phase properties of quantum mechanics, specifically measurements of atoms or ions or atomic spin systems, to determine a property or rate of change in the property of an object, or the effect of an object on a measurable quantity;

“ quantum timing” means using the phase properties of quantum mechanics, specifically measurements of atoms or ions or atomic gases, and the application of associated hardware including stable frequency mixers, optical or microwave sources, crystal oscillators and frequency combs, to provide a timing or synchronisation signal, or frequency reference.

Activity - quantum technology

2.  A qualifying entity carrying on activities that consist of developing or producing quantum technology.

Regulation 2

SCHEDULE 14 Satellite and space technology

Interpretation

1.  In this Schedule—

“ defence” has the meaning given to it by section 2(4) of the Official Secrets Act 1989;

“ infrastructure” includes any of the following—

“ outer space” has the meaning given to it by section 13(1) of the Outer Space Act 1986( 47);

“space activity” and “sub-orbital activity” have the meaning given to them by section 1(4) of the Space Industry Act 2018( 48);

“ spacecraft” has the meaning given to it by section 2(6) of the Space Industry Act 2018;

“ space derived data” means data obtained from space activity or from ground stations receiving data from outer space or from both space activity and ground stations receiving data from outer space, including data relating to—

“ space situational awareness” includes surveillance and tracking of satellites in outer space, monitoring and forecasting of weather in outer space, and mapping or detection of near earth objects or debris in outer space;

“ testing” includes any service that provides quality assurance assessment of—

Activity – satellite and space technology

2.  A qualifying entity carrying on activities that consist of or include operating, developing, producing, creating or using facilities for any of the activities set out in paragraph 3.

3.  The activities referred to in paragraph 2 are—

(a) management of debris in outer space, including sending an object into outer space to remove debris;

(b) the provision of—

(i) in-orbit servicing, maintenance or manoeuvring of satellites;

(ii) in-orbit capabilities, including inspection services or life extension services, including refuelling, repair or relocation services; or

(iii) any technology or system—

(aa) that performs any of the activities set out in sub-paragraphs (a), (b)(i) and (b)(ii); or

(bb) which is designed to, or may be used to, disrupt, modify or interfere with satellites;

(c) the provision of satellite communications links, including radio frequency or optical links—

(i) between satellites in orbit;

(ii) between spacecraft and satellites in orbit;

(iii) between satellites in orbit and celestial bodies; or

(iv) from earth to outer space, and from outer space to earth;

(d) operating or maintaining the capability of secure infrastructure related to—

(i) space activity; or

(ii) sub-orbital activity;

(e) the manufacture or testing of spacecraft, launch vehicles, satellites, planetary probes, orbital stations, ground support equipment, or component parts of, or materials used in, any equipment set out in this sub-paragraph;

(f) the use of space-derived data for a defence purpose;

(g) the operation or control of infrastructure;

(h) the provision or processing of space situational awareness data by activity on earth or by space activity or by means of infrastructure for any of the following—

(i) sub-orbital activity;

(ii) orbital activity;

(iii) a defence purpose.

Regulation 2

SCHEDULE 15 Suppliers to the emergency services

Interpretation

1.  In this Schedule—

“ ambulance services provider” means—

“ associated facility” has the meaning given in section 32(3) of the Communications Act 2003( 54);

“ the British Transport Police Force” means the police force established by Part 3 of the Railways and Transport Safety Act 2003( 55);

“ the Civil Nuclear Constabulary” means the constabulary established under section 52(1) of the Energy Act 2004 (the Civil Nuclear Constabulary)( 56);

“ emergency service” means—

“a fire and rescue authority” is—

“ electronic communications network” has the meaning given in section 32(1) of the Communications Act 2003( 63);

“ electronic communications service” has the meaning given in section 32 of the Communications Act 2003;

“ fuel card” means a card, the production of which enables the person to whom it is issued to discharge his obligation to a supplier of fuel in respect of payment for that fuel, the supplier being reimbursed by a person other than the person producing the card;

“ Ministry of Defence Police” means the police force established under the Ministry of Defence Police Act 1987( 64);

“ National Crime Agency” means the agency established under the Crime and Courts Act 2013( 65);

“ personal data” has the meaning given in section 3(2) of the Data Protection Act 2018( 66);

“ police body” means—

“ public electronic communications network” has the meaning given in section 151(1) of the Communications Act 2003( 69);

“ public electronic communications service” has the meaning given in section 151(1) of the Communications Act 2003;

“ unmanned aircraft” means any aircraft operating or designed to operate autonomously or to be piloted remotely without a pilot on board.

Activity – suppliers to emergency services

2.  A qualifying entity which supplies directly to—

(a) an emergency service of one or more of the goods and services set out in paragraph 3;

(b) an ambulance services provider of one or more of the goods and services set out in paragraph 4.

Good and services – emergency services

3.  The goods and services referred to in paragraph 2(a) are the following—

(a) unmanned aircraft, any component, part or product of an unmanned aircraft, and any equipment, including an electronic device, relating to an unmanned aircraft;

(b) equipment designed to disrupt the operational system of an unmanned aircraft;

(c) equipment designed to detect, track or identify unmanned aircraft;

(d) firearms as defined in section 57(1) of the Firearms Act 1968 (interpretation: firearm)( 70);

(e) ammunition as defined in section 57(2) of the Firearms Act 1968 (interpretation: ammunition);

(f) certification, maintenance, support or repairs to vessels operated by Border Force for frontline operational purposes;

(g) maintenance or repairs of unmanned aircraft, any component, part or product of an unmanned aircraft, and any equipment, including an electronic device, relating to an unmanned aircraft;

(h) an electronic communications network, electronic communications service or associated facility, that—

(i) is not a public electronic communications network or public electronic communications service; and

(ii) is used by the emergency service for the purposes of—

(aa) the prevention or detection of crime; or

(bb) fulfilling the functions of a fire and rescue authority;

(i) hardware, systems or platforms to facilitate the storage of electronic data, used exclusively or primarily by the emergency service for the purposes of—

(i) the prevention or detection of crime;

(ii) fulfilling the functions of a fire and rescue authority; or

(iii) the storage of personal data, including personnel data;

(j) the maintenance and repair of the goods and services referred to in sub-paragraphs (g) and (h);

(k) fuel cards;

(l) services to control systems relating to access and security of buildings;

(m) front line operational delivery of firefighting services in the event of strike action.

Goods and services – ambulance services provider

4.  The goods and services referred to in paragraph 2(b) are an electronic communications network or electronic communications service that—

(a) is not a public electronic communications network or a public electronic communications service; and

(b) is used by the ambulance services provider for the purposes of fulfilling its functions.

Regulation 2

SCHEDULE 16 Synthetic biology

Interpretation

1.  In this Schedule—

“ basic scientific research” means experimental or theoretical work undertaken principally to acquire new knowledge of the fundamental principles of phenomena or observable facts and not primarily directed towards a specific practicable aim or objective;

“ medicine” means—

“ services” means routine synthetic biology processes that are outsourced to specialist providers for completion before being re-integrated into the original work stream to assemble into an experiment or goods, including making a specific strand of DNA or running a proprietary algorithm on a dataset.

Activities

2.  Subject to the exceptions referred to in paragraphs 5 and 6, a qualifying entity carrying on activities that consist of or include any of the following—

(a) carrying on basic scientific research into synthetic biology;

(b) the development of synthetic biology;

(c) the production of goods using synthetic biology;

(d) the formulation of synthetic biology to enable the degradation of materials;

(e) the provision of services that enable the activities in paragraphs (a) to (d).

Meaning of synthetic biology

3.  In this Schedule, “ synthetic biology” means the process of applying engineering principles to biology to design, redesign or make biological components or systems that do not exist in the natural world.

4.  Synthetic biology includes but is not limited to—

(a) the design and engineering of biological-based parts of—

(i) enzymes;

(ii) genetic circuits and cells;

(iii) novel devices and systems;

(b) redesigning existing natural biological systems;

(c) using microbes to template materials;

(d) cell-free systems;

(e) gene editing and gene therapy;

(f) the use of DNA for data storage, encryption and bio-enabled computing.

Exceptions - general

5.  Exceptions to the activities described in paragraph 2 are—

(a) general services or servicing not related to core synthetic biology, where “ core” means those activities without which experiments cannot be conducted, such as DNA synthesis or cloning;

(b) the use of microorganisms to remove harmful contaminants, pollutants or toxins from the environment (known as bioremediation), including bio-based reagents that allow for testing for contaminants;

(c) any approach used to gather clinical information for the purpose of making a clinical decision or making a diagnosis (known as diagnostics) but not the storage or ownership of sensitive human genetic information that enables the identification of an individual;

(d) industrial biotechnology research, development or production using enzymes or organisms that have not been modified through the application of synthetic biology;

(e) the production of substances ordinarily consumed as food or used as feed, including any ingredient or component of such substances;

(f) gene therapy, where it is used solely for the purpose of replacing missing or defective genes to restore phenotypes to achieve a therapeutic effect;

(g) cell therapy, where cells are modified by genetic engineering and then introduced into a patient to treat disease.

Exceptions – human or veterinary medicines or immunomodulatory approaches

6.—(1) Exceptions to the activities described in paragraph 2 are the ownership, ownership of intellectual property or development of the matters set out in sub-paragraph (2) that employ synthetic biology at any stage of the development or production, unless the circumstances set out in sub-paragraph (3) apply.

(2) The matters referred to in sub-paragraph (1) are—

(a) human or veterinary medicines;

(b) immunomodulatory approaches.

(3) The circumstances referred to in sub-paragraph (1) are where the matter described in sub-paragraph (2)—

(a) has a synthetic biology technology that could be employed or modified to produce, deliver or produce and deliver—

(i) toxic chemicals to achieve an incapacitating or lethal effect on humans or animals;

(ii) materials restricted under Schedule 5 to the Anti-terrorism, Crime and Security Act 2001( 71); or

(b) uses substances or pathogens set out in Schedule 5 to the Anti-terrorism, Crime and Security Act 2001.

Regulation 2

SCHEDULE 17 Transport

Interpretation - ports and harbours

1.  In paragraph 2—

“ harbour” is to be construed in accordance with section 313(1) of the Merchant Shipping Act 1995( 72);

“ infrastructure” means infrastructure, facilities and equipment within a port or harbour directly related to the movement of freight, passengers or seafarers;

“ operating” means controlling the functioning of the port, harbour, terminal, wharf or other infrastructure;

“ port” means an area of land and water made up of infrastructure which permits—

“ ship” is to be construed in accordance with section 313(1) of the Merchant Shipping Act 1995.

Activity – ports and harbours

2.  A qualifying entity carrying on activities that consist of or include—

(a) owning or operating a port or harbour in the United Kingdom that handled 1 million tonnes or more of cargo as recorded in the Port Freight Annual Statistics( 73) published by the Department for Transport, in the year preceding the year in which the acquisition is due to be completed; or

(b) owning and operating terminals, wharves or other infrastructure situated in a port or harbour described in sub-paragraph (a).

Interpretation -airports and air traffic control

3.—(1) In paragraph 4—

“ airport” has the meaning set out in section 66(1) of the Civil Aviation Act 2012( 74);

“en route air traffic control services” mean services provided pursuant to a licence under section 6 of the Transport Act 2000( 75);

“ operating an airport” means having overall responsibility for its management;

“ parent undertaking” has the meaning set out in section 1162 of the Companies Act 2006( 76);

(2) The entities that are to be regarded as owning an airport for the purposes of paragraph 4 are—

(a) a company which owns the airport (“ C”); and

(b) any parent undertaking of C ;

(3) The entities that are to be regarded as owning a provider of en route air traffic control services for the purposes of paragraph 4 are—

(a) a company which owns such a provider (“ C”); and

(b) any parent undertaking of C.

Activity – airports and air traffic control

4.  A qualifying entity carrying on activities that consist of or include—

(a) owning or operating an airport in the United Kingdom that handled at least six million passenger movements or 100,000 tonnes of freight in 2018, as recorded in the UK Airports Annual Statements of Movements, Passengers and Cargo published by the Civil Aviation Authority( 77);

(b) providing en route air traffic control services in the United Kingdom;

(c) owning a provider of en route air traffic control services in the United Kingdom.

EXPLANATORY NOTE

(This note is not part of the Regulations)

Under section 6(2) of the National Security and Investments Act 2021 (“ the Act”), a notifiable acquisition takes place when a person gains control of a qualifying entity of a specified description, by virtue of one or more of the cases described in section 8(2), (5) or (6) of the Act. These Regulations specify the descriptions of such qualifying entities.

Section 6(4) provides that a description of a qualifying entity that is specified must include provision that the entity carries on activities in the United Kingdom which are of a specified description and these Regulations specify the activities of the qualifying entities.

Regulation 2 provides that the description of a qualifying entity and the description of activities carried on in the United Kingdom by a qualifying entity are specified in Schedules 1 to 17.

Regulation 3 sets out the definition of terms used in these Regulations.

Regulation 4 requires the Secretary of State to carry out a review of the Regulations and publish a report setting out the conclusions of the review within three years of the Regulations coming into force. Subsequent reports must be published at intervals not exceeding three years.

Schedules 1 to 17 specify the description of qualifying entities and activities of a qualifying entity. Each Schedule describes entities and activities in particular sectors: advanced materials, advanced robotics, artificial intelligence, civil nuclear, communications, computing hardware, critical suppliers to government, cryptographic authentication, data infrastructure, defence, energy, military and dual-use, quantum technologies satellite and space technology, suppliers to emergency services, synthetic biology and transport.

Schedules 1 (Advanced materials), 7 (Critical suppliers to government) and 17 (Transport) refer to documents produced in digital form. Printed versions of the documents are available on request from the Department for Business, Energy and Industrial Strategy, 1 Victoria Street, London SW1H 0ET.

An impact assessment has not been produced for this instrument. An impact assessment was produced for the National Security Investment Bill which considered the impact of the national security and investment regime set out in the Act.