delete Turnover of a business
These regulations, effective January 2022, define how to calculate business turnover for determining maximum monetary penalties under section 41 of the National Security and Investment Act 2021. They specify what constitutes 'control' of a business (including indirect control, material influence, and sole traders), establish rules for identifying relevant accounting periods when turnover figures are unavailable, and grant the Secretary of State discretionary powers to determine turnover in cases of disagreement.
These regulations are enforcement machinery for the NSIA's expansive national security investment screening regime, which represents state overreach into private commercial activity. The broad definitions of 'control' and 'material influence' create regulatory uncertainty that chills investment. The Secretary of State retains excessive discretion to determine both control and turnover figures without meaningful constraint. Penalties of up to 10% of worldwide turnover under the NSIA can devastate businesses based on vague standards. Rather than providing clarity, these regulations formalise discretionary power that could be wielded arbitrarily to penalise legitimate business activity and acquisitions.