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Clifford Chance

Clifford Chance


The Evolving Concept of National Security – Chapter in GCR Foreign Direct Investment Regulation Guide, 2nd Edition

7 December 2022

In recent years, the regulation of foreign investments under national security and foreign investment regimes has grown exponentially, with sectoral coverage expanding to unprecedented levels. In the context of mergers and acquisitions, foreign investment regimes broadly fall into two categories: (1) those that apply only to investments made directly in domestic companies and which aim to give domestic businesses in certain sectors a degree of protection from foreign competition (e.g., Indonesia, Malaysia and the United Arab Emirates); and (2) those that apply also to indirect investments (e.g., the acquisition of a foreign parent company that has a subsidiary in the jurisdiction in question).

The second type of regime, which is the focus of this chapter, tends to concentrate on the national security implications of foreign investments, and has historically recognised defence and critical infrastructure (such as energy and transport) as being fundamental to national security.

In the past decade, however, the concept of ‘national security’ has expanded to include everything from defence and critical infrastructure to artificial intelligence, communications and advanced technology sectors, healthcare, nanotechnology, the media, healthcare, food security and water, to name but a few examples. It is clear that the concept of national security has begun to drift into national interest and may continue to be blurred further still. This chapter examines this shift by looking at the evolution of foreign investment regimes in Australia, the European Union, the United Kingdom and the United States.

The authors are Emily Xueref-Poviac, counsel and Jennifer Storey, Mark Currell and Renée Latour, partners at Clifford Chance LLP.

This chapter is an extract from GCR’s Foreign Direct Investment Regulation Guide - Second Edition. The whole publication is available at

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