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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
United Kingdom | Publication | June 2024
The current government’s approach to AI regulation draws on non-binding, cross-sectoral principles. These were to be enforced by sectoral and cross-sectoral regulators using their existing legislative powers. There were no immediate plans to introduce legislation on AI.
Both the incumbent, Conservative government and Labour’s shadow cabinet have indicated some support for legislation imposing obligations on the most powerful AI models.
The current government confirmed in its White Paper response in February that binding measures would be likely to be required in the future for “highly capable general-purpose AI”. It would not “rush to regulate” at that stage, because ”introducing binding measures too soon, even if highly targeted, could fail to effectively address risks, quickly become out of date, or stifle innovation”.
Since then, however, the Financial Times reported that the government was beginning to craft legislation imposing obligations on the most sophisticated models, though the scope and release date of the proposed legislation was uncertain.
In terms of Labour’s position, MLex reported that Labour’s Bill Esterton, Shadow Minister for Roads, recently commented that Labour wanted to adopt regulation “for the small group of companies developing the most powerful AI models.”
And indeed, the cross- party House of Commons Science, Innovation and Technology Committee took the view in its final report of the last Parliamentary session that “The next Government should stand ready to introduce new AI-specific legislation, should an approach based on regulatory activity, existing legislation and voluntary commitments by leading developers prove insufficient to address current and potential future harms associated with the technology.”
A private member’s Artificial Intelligence (Regulation) Bill, beginning in the House of Lords, had reached the House of Commons before parliament was prorogued. However, as the Bill had not passed when Parliament was dissolved, it will not progress.
Lord Chris Holmes, who submitted the Bill, has indicated he intends to resubmit it in the next parliamentary session.
Regulators will continue play a key role in enforcement and providing guidance, whichever policy direction the next government chooses to take. The Digital Regulation Cooperation Forum members the Competition and Markets Authority, Financial Conduct Authority, and Information Commissioner’s Office, and Ofcom are likely to continue to play a leading role, with other sectoral and cross-sectoral regulators providing influential input within their remits. Regulators’ recent updates on their strategic approaches to AI are likely to continue to be informative for organisations, regardless of whether or when we see legislation on AI from the next government.
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Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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On February 2, 2024, the Belgian Presidency of the Council of the European Union confirmed that the Committee of Permanent Representatives had signed the Artificial Intelligence (AI) Regulation, referred to as the AI Act. Approval by the EU Parliament followed on 13 March 2024, and the AI Act is likely to appear in the EU’s Official Journal around May 2024. The AI Act aims to establish a stringent legal framework governing the development, marketing, and utilisation of artificial intelligence within the region, thereby marking a significant advancement in the regulation of this burgeoning domain.
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In the recent decision of Euronav Shipping NV (Euronav) v Black Swan Petroleum DMCC (BSP) [2024] EWHC 986 (Comm) (the Judgment), the English Commercial Court has underscored the role of comity in international disputes.
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