November 13, 2020 | International, Aerospace, Naval, Land, C4ISR, Security
By: Andrew Chuter
LONDON – Defense and space industries are among nearly twenty sectors named by the British government in the introduction of new legislation Nov. 11 aimed at tightening regulations allowing it to block potentially hostile direct foreign investment.
The government said the National Security and Investment Bill will strengthen its ability to investigate and intervene in mergers, acquisitions and other types of deals potentially posing a threat to British national security.
Artificial intelligence, robotics, military or dual-use technologies, satellite and space technologies, defense and critical suppliers to the government were among 17 industry sectors included in the new legislation.
The new powers allow the government to act against investors from any country, including the United States.
“Under the National Security and Investment Bill, the government will be taking a targeted, proportionate approach to ensure it can scrutinize, impose conditions on or, as a last resort, block a deal in any sector where there is an unacceptable risk to national security,” said the Department for Business, Energy and Industrial strategy in a statement.
The acquisition of sensitive assets and intellectual property, as well as the acquisition of companies is covered by the legislation.
The government said the move brings British legislation into the 21st century.
Reporting of deals in the sectors covered by the legislation will be mandatory and companies could face heavy fines and the transactions made void if they fail to get approval from the Business department.
Britain's effort to shut the door on unwelcome investors like the Chinese is part of a growing trend among Western nations.
Earlier this year the United States introduced mandatory notification requirements for transactions concerning specified types of businesses as part of a broader program of reform.
The Australian government have also introduced legislation requiring foreign investors to seek approval to acquire a direct interest in sensitive national security businesses.
The powers pending before parliament are similar to those already in place with allies like France, Germany and Italy, said the government.
Paul Everitt , the chief executive of the defense, aerospace and security lobby group ADS, welcomed the move but said it was important the government didn't deter overseas investors.
“The government's plans must strike an appropriate balance between putting protections in place and continuing to ensure the UK remains an attractive environment for international investment,” said Everitt.
Consultant Howard Wheeldon, of Wheeldon Strategic Advisory, also supported the government action, but he cautioned: “Does it [the legislation] have sufficient teeth? We certainly need to protect our specialist industry but we must also ensure and expect the playing field to be kept level.”
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Budget has $9.8 billion for cyber security and cyber warfare; $3.2 billion for hypersonics; and $800 million for artificial intelligence (AI) research. THE MIL & AERO COMMENTARY – The 2021 U.S. Department of Defense (DOD) budget proposal is out, and it looks like several years of consistent growth driven by the Trump Administration may be leveling off. A closer look, however, may indicate a pivot to new leading-edge technologies and away from legacy systems. DOD leaders in their fiscal 2021 budget request to Congress, which was released last month, are asking for $705.4 billion, which is down about 1 percent from this year's level of $712.6 billion. Before you conclude that the Pentagon budget has turned flat, however, take a look at where the money's going. First, the bad news: procurement. This is where big-ticket items like aircraft, combat vehicles, and ships get funding. The DOD's procurement budget request for 2021 is $136.9 billion, down nearly 7 percent from this year's level of $147.1 billion. Contained in the DOD budget for procurement, moreover, are aggressive cuts to legacy weapons systems. The U.S. Air Force, for example, will retire 24 RQ-4 Block 20 and Block 30 Global Hawk Battlefield Airborne Communications Node (BACN) unmanned aerial vehicles (UAVs) and Block 30 multi-intelligence aircraft UAVs next year. Related: Army researchers eye fuel cells to provide power for infantry wearable electronics on the leading edge The U.S. Navy, meanwhile, will retire four Ticonderoga-class missile cruisers. The U.S. Army plans to eliminate 13 programs involving munitions, fires, protection, sustainment, mobility, mission command, and cyber programs that no longer are priorities. Additional cuts are expected. Next year the Navy plans no additional purchases of P-8A Poseidon maritime patrol aircraft; the MQ-4 Triton long-range maritime patrol UAV; or the MQ-25 Stingray UAV. The counterweight to these procurement cuts, however, is in the DOD's budget for research, development, test, and evaluation (RDT&E). As procurement spending is going down, the research budget is headed in the other direction. The Pentagon is asking for $106.6 billion, which is up about 1 percent from this year's research budget of $106.6 billion. Revealing is money is going. The DOD next year plans to spend $9.8 billion for cyber security and cyber warfare -- up 81 percent from $5.4 billion this year; $3.2 billion for hypersonics; $1.5 billion for military microelectronics and 5G networking; and $800 million for artificial intelligence (AI) research. Related: The new era of high-power electromagnetic weapons The Pentagon hypersonics budget will pay for research and development initiatives to develop the Army Long-Range Hypersonic Weapon; Navy Conventional Prompt Strike (CPS); and Air Force Advanced Rapid Response Weapon (ARRW). Research money also would include $1.1 billion for the Navy's next-generation frigate; $4.4 billion for the future Columbia-class ballistic missile submarine; and $464 million for two Large Unmanned Surface Vessels. The U.S. Defense Advanced Research Projects Agency (DARPA) is asking for $3.6 billion in 2021, a 3 percent increase from the $3.5 billion the agency received this year. DARPA has asked for $322.7 million for electronics research in 2021 -- a 1.7 increase from the 317.2 million the agency received this year. For sensors research, DARPA is asking for $200.2 million in 2021 -- a 26 percent increase over the $158.9 million the agency received this year. Related: Military researchers host industry day briefings for artificial intelligence (AI) and machine learning So, in short, it sounds like out with the old, and in with the new at the Pentagon. Four Navy cruisers that are at least 30 years ago are heading for retirement. Large, slow, and vulnerable Global Hawk UAVs are to be taken out of service, and Army programs no longer relevant amid today's global threats will be taken off the board. At the same time, enabling technologies considered crucial for today's military needs are on the upswing: hypersonic munitions and aircraft, cyber security and cyber warfare, 5G networking, and artificial intelligence. Perhaps the DOD has been due for a house cleaning like this for a while. Getting rid of obsolescent weapons systems makes sense because they're past the point of diminishing returns. Pumping more money into technologies for tomorrow's battlefield makes sense, too. These kinds of realignments are painful, yet essential. https://www.militaryaerospace.com/defense-executive/article/14168362/dod-budget-leadingedge-technologies-research