Fearing the China-Russia threat, Britain will increase its ability to deter foreign investment

The British government plans to improve its ability to prevent foreign investors from acquiring strategic assets. There are growing concerns about the threat to Britain’s national security posed by potentially hostile countries such as China and Russia.

The British government on Wednesday unveiled a legislative bill that would require companies to notify authorities of foreign investments in sensitive sectors such as defense, transport, communications and technology. A new regulator will have 30 days to review potential deals, either blocking or imposing conditions on those deemed to pose a risk to national security.

Previously, similar action has been taken by British allies such as the United States, Australia and Germany. They fear the influence of foreign investors like Chinese tech giant Huawei (Huawei). A stock market drop triggered by the neo-coronavirus pandemic has undervalued many companies and heightened fears of international takeovers.

“The U.K. remains one of the world’s most attractive investment destinations and we want to keep it that way,” Business Secretary Alok Sharma said in a statement. “But there should be no doubt that hostile actors – there is no back door into the UK.”

The bill applies to deals that give foreign investors access to British technology and intellectual property, as well as business acquisitions.

Fines for violating the new rules will be steep, including fines of up to 10 million pounds ($13.3 million), or the equivalent of 5 percent of a company’s global revenue, whichever is higher.

After leaving the EU, the British government is under pressure to attract foreign investment as well as protect its strategic national interests.

Sharma said the legislation should not act as a barrier to foreign investment.

Foreign investment created more than 46,000 jobs across the UK in the last financial year.