On 11 July 2023 the National Security Act 2023 (the Act) received royal assent and became law. The Act addresses trade secret misappropriation in the context of industrial espionage by a foreign government, making the unauthorised conduct of obtaining, copying, recording or retaining a trade secret, or disclosing or providing access to a trade secret, under certain circumstances, a criminal offence. The maximum penalty is 14 years imprisonment and/or a fine (section 2 of the Act).
The trade secrets provision is part of a broader regime introduced by the UK government to address national security threats such as espionage, sabotage and foreign interference.
One of the conditions that has to be met in relation to the person’s conduct is the “foreign power condition”. The foreign power condition is defined in section 31(1) of the Act as:
(a)the conduct in question, or a course of conduct of which it forms part, is carried out for or on behalf of a foreign power, and
(b)the person knows, or having regard to other matters known to them ought reasonably to know, that to be the case.
In order for section 31(1) to be triggered it is for example sufficient if the conduct is under direction or control of the foreign power or even just carried out with the financial or otherwise assistance provided by a foreign power for that purpose.
It will be interesting to see how the foreign power condition will be applied in practice, in particular where governments have extensive control and ownership over corporations.