Academic institutions and research organisations are clearly in the sights of the UK government when it comes to the UK's national security screening regime set out in the National Security and Investment Act 2021 (NSIA). Not only has the government published – and recently expanded – specific guidance for these sectors, it has also imposed remedies in three cases involving universities (out of a total of 23 cases). Academic institutions and research organisations are often active in areas targeted by the NSIA and may therefore have to consider notifying certain academic or research collaborations, intellectual property (IP) transfer agreements and other arrangements. 

1. Mandatory notification: The NSIA introduces a mandatory notification regime for notifiable acquisitions in 17 sensitive areas. It is unlawful to complete these transactions unless and until they are approved by the Secretary of State (the SoS). Regulations define specific activities within those sectors where notification by the acquirer will be mandatory. The 17 sensitive areas are: 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 technologies; suppliers to the emergency services; synthetic biology; and transport. Academic institutions and other research organisations work within many of these sensitive areas.
2. Voluntary notification: Other transactions, which the parties consider could give rise to a national security risk, may be notified to the SoS on a voluntary basis to obtain approval. These include all asset acquisitions.
3. Qualifying acquisition: The asset or entity being acquired must be from, in, or have a connection to, the UK.
   1. Qualifying entities: These include: universities; trusts; university spin-out companies; university subsidiaries; research organisations; and private companies doing contractual work with an academic institution or research organisation.
   2. Qualifying assets: These are land, tangible movable property and such IP as ideas, information or techniques which have industrial, commercial or other economic value. In particular: advanced or specialised laboratory equipment; patents, including future IP arising from collaboration with other entities; licences granting the use of assets, whether those licences are commercial or non-commercial, or relate only to research and development; and all forms of IP, such as software, algorithms and formulae.
4. Relevant thresholds: The regime applies to direct or indirect acquisitions of:
   1. certain shares, voting rights and material influence in a qualifying entity. Acquisitions of more than 25% of shares or voting rights (and possibly lower in the case of material influence, or voting rights that enable or prevent the passage of any class of resolution governing the affairs of a qualifying entity) can be subject to review; and
   2. a right or interest in a qualifying asset, where this enables the acquirer to use the asset, or direct or control how the asset is used, or do so to a greater extent than prior to the acquisition.
5. "Call-in" power: The SoS may "call in" for review any transaction (whether or not notified) to assess and address any national security risk. Parties can submit a voluntary notification for an acquisition that is not covered by mandatory notification where they want to seek assurance whether or not the government is going to "call in" the acquisition. The government is more likely to be interested in academic collaborations that are connected to, or could be used in connection with, one or more of the sensitive areas.
6. Sanctions and remedies: The SoS can block, or impose conditions on, transactions to remedy any identified national security risk. There are severe penalties for completing a notifiable acquisition without approval and any such acquisition would be legally void. The penalties include criminal charges with imprisonment for up to five years, and fines of up to £10 million (or, if higher, 5% of worldwide turnover).
7. No exemptions: There are no automatic exemptions for acquisitions involving:
   1. research collaborations and activities receiving funding from a government entity; or
   2. a licence secured through the Export Control Joint Unit.
8. Guidance: As mentioned, there is government guidance, as well as other guidance published, for example, by the National Protective Security Authority and the National Cyber Security Centre. Academic institutions and research bodies can also approach the government's Research Collaboration Advice Team.
9. Example scenarios: Acquisitions may fall within the scope of the NSIA and be subject to voluntary notification if they involve the acquisition of control over existing (or future) IP and/or laboratory equipment, or other assets (or entities). Control over assets (or entities) may arise, for example, as a result of:
   1. involvement in university research, such as through collaborative agreements, or the funding or sponsoring of research projects/positions/themes;
   2. developing or forming research centres (including centres based overseas);
   3. developing university or research organisation spin-out companies; or
   4. funding employees or students in university programmes.
10. Final Orders: To date, the SoS has imposed remedies by Final Order in 23 cases. Of these, three cases concerned UK universities and overseas acquirers:
    1. two of these cases related to the acquisition of IP under licensing arrangements;
    2. one of these two cases was the first prohibition of a transaction under the NSIA; and
    3. the third (most recent) case concerned a joint venture between a UK university and an overseas entity for the establishment of an institute to conduct research in energy and power technologies, and the potential acquisition of research and IP held by the university.