The U.S. government continues to aggressively monitor and impose restrictions on transactions deemed to threaten U.S. national security. Continue Reading CFIUS Update: A More Refined Focus, Increased Risks
New CFIUS Guidelines Reflect Shift in Enforcement Posture
On October 20, the Committee on Foreign Investment in the United States (CFIUS) released new, non-binding Enforcement and Penalty Guidelines (Guidelines). The Guidelines follow upon last month’s Executive Order linking CFIUS reviews directly to the president’s national security prerogatives. In particular, the Guidelines detail the following:
- Categories of conduct that constitute violations.
- Sources of information CFIUS relies upon to determine whether a violation has occurred.
- The process for developing and imposing penalties.
- Aggravating and mitigating factors that CFIUS evaluates when deciding whether to impose a penalty.
Continue Reading New CFIUS Guidelines Reflect Shift in Enforcement Posture
A First! President Hones Government’s Foreign Investment Review
On September 15, President Biden announced the issuance of Executive Order (EO) 14083 to sharpen the focus of inbound investment screening by more formally tying the role of the Committee on Foreign Investment in the United States (CFIUS or the Committee) to the president’s national security prerogatives. For the first time since the Committee was established in 1975, the EO provides formal presidential direction delineating five specific factors for the Committee to consider when reviewing foreign acquisitions of U.S. companies.
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Impact of Government Shutdown on CFIUS Reviews
I commented about the impact the government shutdown is having on deals that require review and approval by the Committee on Foreign investment in the United States (CFIUS). CFIUS is the interagency committee authorized to review transactions involving foreign investment in the United States to determine the effect of such transactions on national security.
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Thad McBride Discusses New CFIUS Rules
I recently provided insight for a Bloomberg Law article on the new interim rules implementing the Foreign Investment Risk Review Modernization Act (FIRRMA). The interim rules, which went into effect on November 10, broaden the authority of the Committee of Foreign Investment of the United States (CFIUS) – an interagency committee that reviews foreign investments
Foreign Acquisition of U.S. Assets: Aggressive Actions Likely to Continue
In an article published in the November 2018 issue of the ACC Docket, I co-authored an article with Elliot Burger, senior legal counsel at Linamar Corporation in Ontario, Canada discuss the expanding role of the Committee on Foreign Investment in the United States (CFIUS). CFIUS is the U.S. government committee that reviews transactions that could result in control of a U.S. business by a foreign person in order to determine whether the transaction could harm U.S. national security.
Continue Reading Foreign Acquisition of U.S. Assets: Aggressive Actions Likely to Continue
CFIUS Pilot Program Creates New Obligations and Challenges
- Mandatory declarations of certain transactions now required
- Certain changes to pre-existing regulations also announced and effective immediately
- Mandatory declaration requirement may not ease burden on parties filing with CFIUS
On October 11, the U.S. Treasury Department took the first steps to implement the significant changes introduced under the Foreign Industrial Review and Risk Modernization Act (FIRRMA). FIRRMA broadens the mandate of the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign investments in the United States that could impact U.S. national security.
Most notably, the Treasury Department is establishing a pilot program that imposes new obligations on foreign parties making investments, even non-controlling investments, in U.S. businesses involved in 27 explicitly designated industries. The pilot program defines such investments as “pilot program investments.”Continue Reading CFIUS Pilot Program Creates New Obligations and Challenges
Potential CFIUS Interest in Tesla Privatization
I provided insight on Tesla Inc.’s recent announcement of potential Saudi Arabian funding to take the company private and how this move could draw scrutiny from the Committee on Foreign Investment in the United States (CFIUS). “The big question is whether this technology is really sensitive enough and whether if acquired by a non-U.S. company it could have some kind of negative impact on U.S. national security,” I explained. I noted that this could be possible since the Trump administration has announced possible tariffs on auto imports for national security reasons.
Continue Reading Potential CFIUS Interest in Tesla Privatization
CFIUS Reform and the Likelihood of Increased Filings
Bass, Berry & Sims attorney Thad McBride provided insight for a Bloomberg Law article on how recently enacted reforms related to the Committee on Foreign Investment in the United States (CFIUS) will spur reviews of more transactions between U.S. companies and foreign investors.
Continue Reading CFIUS Reform and the Likelihood of Increased Filings
FIRRMA Legislation Will Broaden Authority for CFIUS Review of Foreign Investment in the U.S.
In a Law360 article published on August 7, Bass, Berry & Sims attorney Thad McBride provided insight on how the Foreign Risk Review Modernization Act (FIRRMA) legislation included in this year’s National Defense Authorization Act (NDAA) would alter the Committee on Foreign Investment in the United States (CFIUS) by broadening its authority when reviewing foreign investments in the U.S.
As part of FIRRMA’s effort to broaden CFIUS’s power, the interagency committee will officially have the ability to review foreign investments in U.S. companies that hold personal information of U.S. citizens. While this has been an issue for potential foreign investors in the past (i.e. MoneyGram International Inc.), its formal inclusion in the legislation text takes it to another level.Continue Reading FIRRMA Legislation Will Broaden Authority for CFIUS Review of Foreign Investment in the U.S.