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.
Reid is the Managing Partner of Sheppard Mullin's London office, practicing in international trade regulations and investigations.
On October 15, 2020, CFIUS will officially tie mandatory filings to U.S. export control regimes, including the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR). While that change may draw a clearer line of what constitutes a mandatory filing, it also pulls your CFIUS review into the complex (and somewhat nerdy) world of export regulations.
Continue Reading Lend Me Your EARs: CFIUS Makes Export Controls a Trigger for Mandatory Filings
With round after round of tariffs on Chinese goods, announcements, removals, exclusions, delays, increases and, of course, tweets regarding all of the above, it can be easy to get lost on where, exactly, things stand with respect to Tariffs implemented under Section 301 of the Trade Act. Below we provide a brief overview and reference chart, complete with links to the relevant notices. We will update the chart as the U.S. government adds, removes, or changes the tariffs.
** This is an update to our August 19, 2019 post. **
Almost two years into the trade war, the United States and China have reached a preliminary agreement. On January 15, 2020, the United States Trade Representative published that agreement. The agreement includes provisions on intellectual property, technology transfer, agriculture, currency, and expanding trade.
Per that agreement, the USTR will reduce duties on List 4A, which is roughly $120 billion worth of Chinese goods, from 15 to 7.5 percent effective on February 14, 2020.
Continue Reading UPDATED: China Trade War Scorecard: Keeping Track of Tariffs
In late June, there were reports that the Trump Administration would use emergency powers to restrict Chinese investment in the United States. On Wednesday, the White House backed away from that position after the House of Representatives passed a bill on Tuesday expanding and increasing the powers of the Committee on Foreign Investment in the United States (CFIUS). The bill is called the Foreign Investment Risk Review Modernization Act (FIRRMA).
Continue Reading On FIRRMA Ground: Congress to Restrict Foreign Investment and Expand Export Controls
KEPCO is at the heart of an inquiry into the alleged repeated import of North Korean coal into the Republic of Korea. Reportedly, 8 other Korean companies and 2 other banks may also be involved and may also be under investigation.
The story may have come as a shock to some, who saw President Trump’s visit with the North Korean leader Kim Jung Un as a sign of a coming détente. However, that meeting resulted in very little substantive change by the DPRK or the United States, and UN and U.S. sanctions remain in place.
Continue Reading Coal Hard Facts: North Korea Sanctions Remain in Place and Remain a Risk
‘Tis the season to wonder, what will 2018 bring? We may speculate on things like a private company making a moon landing or a peace accord with North Korea. We may be certain of things like well-intentioned gym memberships and a host of new-you products.
Somewhere between speculation and certainty we find the U.S. Government’s scrutiny of foreign direct investment in the United States. The recently proposed Committee on Foreign Investment in the United States (CFIUS) reform introduced in Congress sheds some light on the future of CFIUS reviews.
Continue Reading The Future of CFIUS: Perhaps Not So Happy a New Year
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
CFIUS has the power to unwind your M&A deal. That power will likely expand. That is the headline.
The Committee on Foreign Investment in the United States (CFIUS) reviews acquisitions by foreign parties of “critical industries” and “critical infrastructure” in the United States. The inter-agency committee’s actions warrant plenty of explanation, and you can find much of it here.…
- A President Trump will have authority to reinstate sanctions lifted by the Iran Nuclear Deal as well as revoke certain authorizations provided for business with Iran.
- Several economic and geopolitical factors may cause Mr. Trump to reconsider or mitigate his approach to the Iran Nuclear Deal.
- Companies should prepare to respond quickly to any changes.
Maybe you’ve seen it before, the series of characters that represents upsetting the whole game, flipping the table:
These days, where words fail, we have emojis. And here they describe what a President Trump may do to the carefully planned Iran Nuclear Deal. One year after the implementation of the Iran Nuclear Deal (much discussed, at least in our blog), Mr. Trump will take office. At that time, we will see whether his campaign rhetoric against Iran becomes policy action or whether it will be tempered by geopolitical and business realities.…
- Non-U.S. banks can do business with Iran and continue their relationships with U.S. banks.
- Non-U.S. companies may use proceeds from Iran transactions more freely, including in the United States.
- OFAC draws a clearer line with respect to the use of Iran-related funds.
After the Iran nuclear agreement, as non-U.S. companies entered into newly-permitted business in Iran, they faced the difficult question of where they could put the money from their Iran business. U.S. law still prohibits U.S. persons (including U.S. banks) from conducting most business with Iran. Among other rules, OFAC regulations and guidance provided that “Iran-related” funds could not transit the U.S. financial system. But the guidance did not state clearly what constituted “Iran-related” funds. For that reason, foreign financial institutions (FFIs) hesitated, even feared, to process Iran-related transactions because of the risks of sending Iran-related funds into the U.S. financial system in violation of U.S. sanctions. However, a new clarification in the OFAC guidance could change all of that (and change it in the way we proposed right here in this blog).…
On February 29, 2016, the European Commission and United States released the terms of the much-anticipated renewed framework for the transfer, sharing, and processing of European individuals’ data to the United States. The framework replaces the “Safe Harbour” mechanism, which enabled U.S. to transfer data from the EU to the United States by self-certifying that their practices ensured an adequate level of protection for personal data under the EU Data Protection Directive. In October, the “Safe Harbour” framework was declared invalid by the European Court of Justice in the Schrems decision covered earlier in this blog.…