M&A into the UK: the list of ‘essential functions’ which may be caught by the proposed new controls on inward investment in the tech, defence and energy sectors

Written on 20 Oct 2017

In Part 1 of this article, we discuss the government’s latest proposals on increased scrutiny of inwards investment into the UK, and what they could mean for businesses. In Part 2, we explore the proposals in more depth.  In this Part 3, we set out the sectors that are proposed to come within the scope of the proposed new standalone regime.

Civil nuclear sector

  • The operation of civil nuclear reactors for the primary purpose of electricity generation.
  • Civil nuclear fuel production, specifically:

·                     enrichment; and

·                     fuel fabrication.

  • Reprocessing, waste storage and disposal facilities for Category I-III nuclear material.
  • The transportation of Category I and II nuclear material.
  • The decommissioning and clean-up of civil nuclear facilities.

Communications sector

  • The provision of infrastructure in the UK relating to voice or data networks if the impairment of such infrastructure could cause the loss of a voice or data network to more than one million end users.
  • The provision of an Internet Exchange Point in the UK which facilitates the exchange of internet traffic, where that Internet Exchange Point connects three or more of the following electronic communication networks: a network that, if its infrastructure was impaired, could cause the loss of an electronic communication service to more than one million end-users.
  • Provision of the UK country code Top Level Domain (ccTLD) registry and the associated authoritative name servers.
  • The provision of emergency services networks.
  • The operation of broadcast infrastructure that carry national radio or television services.
  • The provision of Satellite infrastructure required for safety of life communications.
  • The provision of a submarine cable which conveys signals of any description.

Defence sector

  • Those companies with facilities on List X and/or issued with a Security Aspects Letter.

Energy sector

  • Upstream gas and petroleum infrastructure which has a throughput of more than 20million barrels of oil equivalent per annum. Including production, transport, storage or processing of oil and gas.
  • Energy networks that deliver secure, reliable electricity and gas to customers, ensuring continued supply as far as possible on the supply chain.
  • Gas and electricity interconnectors, long range gas storage and Gas Reception Terminals, including Liquefied Natural Gas that contributes to the security of supply.
  • Organisations owning large scale power generation of greater than 2GW with the capacity to significantly impact balancing of the electricity system if disrupted.
  • Energy suppliers that provide energy to significant customer bases.
  • The supply of petroleum-based road, aviation or heating fuels (including liquefied petroleum gas) to the UK market, by companies who provide or handle more than 500,000 Tonnes per annum, through at least one of the following activities:
  • the import of any of crude oil, intermediates, components and finished fuels;
  • the storage of any of crude oil, intermediates, components and finished fuels;
  • the production of intermediates, components and finished fuels through a range of refining or blending processes;
  • the distribution of petroleum-based fuels to other storage sites throughout the UK by road, pipeline, rail or ship; and
  • the delivery of petroleum-based fuels to retail sites, airports or end users.

Where:

  • “intermediates” are petroleum or biomass derived substances which are intermediate products in the processing of crude oil and other feedstocks to fuels or fuel components;
  • “components” are petroleum or biomass derived substances (e.g. biodiesel and ethanol) which are mixed with other components to produce finished fuels.

Transport sector

  • The ownership and operation of statutory harbour authorities which account for more than 5% of UK traffic.
  • The operation of airports classed as dominant airports for economic regulation purposes as defined in the Civil Aviation Act 2012.
  • The provision of en route air traffic control services.

Emergency services sector

  • The provision of emergency services control room services.
  • The provision of main national IT systems to enable police operations (this currently covers the Police National Network, the Police National Database and the Police National Computer).

Government sector

  • Functions relating to the need for resilient, secure means to oversee co-ordination of response in times of emergency, provide for UK national security and support to Defence and ensure the continued functioning of the state including protection of UK citizens.