Asian Legal Business: CFIUS – Upping the Ante

CFIUS – Upping the Ante

Article written by Sarah Wong of Asian Legal Business. Republished with consent of journalist.

As the United States and China remain locked in a trade standoff, U.S. President Joe Biden has ushered in a fresh set of criteria on foreign investment review on the grounds of national security in a thinly veiled attempt to stymie China’s access to core U.S. technology, critical infrastructure, and sensitive data. Lawyers urge investors to come prepared for heightened regulatory scrutiny and steeper challenges ahead.

Ambitions of geopolitical influence and a race for technological supremacy have pitted the United States against China for some time now, but China’s burgeoning economic and military clout has only intensified this competition with the world’s top economy in recent years.

The White House under the Biden administration has continued with past U.S. administrations’ hawkish stance against Beijing by viewing everything, from academic and cultural exchange to capital and data flows, through the lens of national security. With China’s paramount leader Xi Jinping emphasizing the need for domestic technological capabilities, Chinese strategic investment in perceived “high-risk” areas is keeping policymakers in Washington up at night.

With a watchful eye on “competitors” and “adversarial nations,” U.S. President Joe Biden in September issued an executive order underscoring the “critical role” of the committee on Foreign Investment in the United States, or CFIUS.

Established in 1975, the interagency committee has been authorized to evaluate certain transactions involving foreign investment to determine whether such transactions put America’s national security in peril and if blockage or fencing in of the deal should follow. “CFIUS maintains fairly broad jurisdiction to review foreign acquisitions of U.S. businesses. It also has jurisdiction over controlling as well as certain types of non-controlling investments in the U.S.,” says Daanish Hamid, a partner and CFIUS specialist at Rimon Law.

Read the full article here: CFIUS – Upping the Ante

Daanish Hamid is a partner in Rimon’s Washington DC office with over 20 years’ experience. He advises clients on national security reviews conducted by the Committee on Foreign Investment in the United States (CFIUS) and has led several successful CFIUS filings with respect to corporate deals. Mr. Hamid also handles compliance and investigations involving the Foreign Corrupt Practices Act (FCPA), anti-money laundering laws, economic sanctions, and fraud. Read more here. 

Our attorneys have extensive experience representing clients before the Committee on Foreign Investment in the United States (CFIUS) with respect to national security reviews of their M&A, PE/VC/CVC, joint venture, and real estate deals. U.S. as well as foreign companies and investors regularly seek our user-friendly guidance on navigating complex CFIUS laws and regulations, including the Foreign Investment Risk Review Modernization Act (FIRRMA) and its implementing rules. Read more about our CFIUS/National Security practice.