LONDON, UK: Britain is reevaluating its approach to screening foreign takeovers for national security concerns to alleviate the regulatory burden on businesses.

Deputy Prime Minister Oliver Dowden made this announcement less than two years after introducing stricter rules.

Under the 2022 National Security and Investment Act, the government is authorized to scrutinize foreign investments and take measures to safeguard assets deemed crucial to the nation's security. However, companies have voiced concerns about the act's broad scope, which mandates the notification of deals across 17 sectors, from advanced materials to transportation.

In the initial year since the act came into force, eight out of 15 interventions were related to takeovers with Chinese links, leading to criticism from the Chinese embassy in London. Notably, the law was employed to compel the Chinese-owned tech firm Nexperia to divest Newport Wafer Fab, the largest microchip factory in Britain, which it had acquired in 2021.

Dowden stressed the need to ensure that the screening powers remain current, proportionate, and transparent while safeguarding national security. He indicated that semiconductors and critical minerals might be designated as separate sectors under the act to reflect their growing significance.

The government plans to engage businesses, investors, and advisors in consultations to optimize the screening process, aiming for a seamless and effective approach. Stakeholders have the opportunity to provide input to the government until January 15.

"The best way to foster economic security is through a strong and open economy," Dowden said. "That is why we have been using the powers effectively so far, only intervening when absolutely necessary to protect national security."