U.S. President Biden signed the first-ever Executive Order (E.O.) on CFIUS – the Committee on Foreign Investment in the United States – on September 15, 2022. While the E.O. does not substantively change CFIUS’s jurisdiction or the legal process, the Biden Administration provides some explicit guidance on certain national security priorities and factors for CFIUS to consider when evaluating transactions – focusing in on protecting U.S. technological advantage, supply chain resiliency, and sensitive data from U.S. adversaries. No doubt, the E.O. will impact certain cross-border transactions and investments as CFIUS develops strategies to incorporate the E.O. into practice and align national security priorities with other national security tools.
Fatema Merchant is a partner in the Governmental and White Collar Defense and Corporate Investigations Practice Groups in the firm's Washington, D.C. office. Fatema is the Office Managing Partner of the firm's Washington, D.C. office and leads the Sanctions Team at Sheppard Mullin.
HERE WE ANSWER A FEW OF THE QUESTIONS THAT YOU MAY HAVE
What does decertification mean?
For the time being, decertification is a solely U.S. issue. Under the Iran nuclear agreement (known as the Joint Comprehensive Plan of Action, or JCPOA), Iran agreed to limits on its nuclear program in exchange for relief from U.S. and UN sanctions. Soon after the JCPOA was signed, the U.S. Congress passed the Iran Nuclear Agreement Review Act (INARA). That law requires the president to certify to Congress every 90 days that Iran is meeting the terms of the nuclear agreement and that continuing to waive sanctions on Iran is vital to the security interests of the United States. President Trump has stated that on October 15, he will decertify Iran under INARA on the grounds that continuing to waive sanctions is not in the national security interests of the United States.
Continue Reading President Trump’s Decertification of the Iran Nuclear Agreement: What It Means and What’s Next
On June 16, 2015, IAP Worldwide Services Inc., a private defense and government contracting company, agreed to pay $7.1 million to settle criminal charges of the U.S. Foreign Corrupt Practices Act (FCPA) related to bribing Kuwaiti government officials to secure a Kuwaiti government contract. On the same day, James Michael Rama, IAP’s Former Vice President of Special Projects and Programs also pleaded guilty to FCPA charges. For U.S. government contractors, the opportunities to provide services and expertise to foreign governments are lucrative, but this enforcement action also highlights the risks associated with obtaining such contracts.
Continue Reading Government Contracting Abroad: Beware Compliance Risks