Expanding CFIUS: New Law Strengthens And Slows Investment Review

This week, you have likely heard about FIRRMA, the Foreign Investment Risk Review Modernization Act, the law that will expand CFIUS. We have written about a number of aspects of the new law as it was being made, including the following:

In this alert, we provide a quick overview of the major points of that law. Continue Reading

Life in the Fast Lane: CFIUS-Free Investments, if You’re From the Right Country

All this past week, you have been hearing about FIRRMA, the new legislation that will increase the powers of the Committee on Foreign Investment in the United States that is expected to be signed into law in the coming weeks. As we predicted here and here, FIRRMA will authorize CFIUS to review non-controlling investments by foreign companies, to enhance restrictions on investment in certain “critical technology,” to target real estate deals in proximity to sensitive U.S. Government sites, and to require mandatory filings for certain investments by foreign government-owned entities. Continue Reading

Of Course You Know, This Means War: A Strategic Update on the Trump Trade War

This article suggests steps you should take to survive the current trade war. We are now in a trade war regardless of the fact that Treasury Secretary Steven Mnuchin would rather we call it “a situation of trade disputes.” Trade disputes are what we had from approximately 1945 to 2017: a relatively stable world trading order in which differences over unfair trade practices were mostly worked out under existing remedies, such as the antidumping and countervailing duties regimes. What we have now is a period of escalating tit-for-tat tariff increases in which the old trading norms are being increasingly rejected, exempted, and undermined. And it is those very norms that kept us out of trade wars for the last 70 years. Continue Reading

Stuck in the Middle With You: EU Blocking Statutes, Iran Sanctions, and the Thousands of Businesses Caught In Between

Imagine telling your company’s Board of Directors that the company will have to knowingly violate the law. Further, you might note, the American Law Institute’s Principles of Corporate Governance state that, with very limited exceptions, a director who knowingly causes the corporation to disobey the law violates his duty of care. The protections of the Business Judgement Rule may not be available to a board member who, charged with navigating the Scylla and Charybdis of a conflict of laws, steers right into the shoals of noncompliance.

Beginning August 6, that will be the situation facing the thousands of companies that are subject to U.S. sanctions on Iran and to EU regulations blocking those sanctions. While it appears to be a stark choice, some nuances to the regulations may make navigating the narrow straights of the conflict of laws a less Odyssean and more practically manageable. Continue Reading

5 Weird Things About the Trump Trade Agenda: Disruptive Innovation On a Global Scale

We’ll give him this: President Trump has an ambitious trade agenda. This fire has many irons in it, and some of them are getting hot. Here at the Global Trade Law Blog, we’ve been following trade law for approximately 250 years and we’ve never seen anything like it in breadth or scale. The administration asks us to trust that there is a disruptive and innovative grand strategy behind it, but to some of us it looks (particularly in comparison to a mostly orderly international trading system in place since 1945) like madness. The question of whether “yet there is method in’t” may only be answered by future historians. For the time being, herewith is our snapshot of the Trump trade agenda, late June 2018 edition. Continue Reading

On FIRRMA Ground: Congress to Restrict Foreign Investment and Expand Export Controls

This week, 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

Another Day Another Tariff… and Other Recent Restrictions on China

In what has become his trademark Trumpian manner, the President announced last Friday that new tariffs and trade restrictions against China are on again, at the same moment that his senior Commerce and Treasury Department negotiators were trying to work out a deal in Beijing. This came just a handful of days after Department of Treasury Secretary Steven Mnuchin announced that the trade war with China was “on hold.” The President has declared again in a tweet Saturday that America “can’t lose” a trade war with China. We’ve debunked that fallacy here. But even if one accepts the premise that we should prosecute a trade war, it’s well established that a micromanaging general quickly loses the confidence of his ground troops. Wars have been lost for less. On trade, the President’s conflicting directives have everyone a little confused. Here are the highlights for the time being: Continue Reading

Your Way-Too-Early Guide to North Korean Investment: Big Opportunities, Big Risks, and the Regulatory Guidance to Identify Both

I spent last week in Seoul talking to clients about the latest changes to U.S. trade and sanctions policy (as South Korea is one of Iran’s largest trading partners, it is understandable that some concerns have arisen there in May). Interestingly, a topic that came up often was how to reenter the North Korean market. The people with whom I spoke, in industries ranging from financial, to manufacturing, to technology, to legal, were sanguine on the possibility of a détente and the resulting opportunities for investment, growth, and profit in a reopened North Korea. Continue Reading

Client Alert: Iran Sanctions Return

Key Points

1. All sanctions on Iran that were in place before January 2016 will be re-imposed no later than November, 4 2018.

2. Secondary sanctions that penalize non-U.S. persons doing business with Iran will be reinstated.

3. General License H, allowing non-U.S. subsidiaries of U.S. companies to do business in Iran, will be revoked.

4. In some cases, companies may take payments or repayments for sales, loans, or credits to Iran after November 4, 2018 Continue Reading

Five Things You Must Know About Trade Wars

On April 3, 2018, President Trump’s U.S. Trade Representative released a list of 1300 categories of Chinese goods that will be subject to 25% tariffs. That followed a tit-for-tat exchange in which President Trump announced a round of steel and aluminum tariffs on March 8, and China announced tariffs on U.S. imports worth around $3 billion on April 2 (including American pork, fruit, wine and steel pipes). On April 5, China responded with a list of $50 billion of U.S. goods that will be subject to increased tariffs (including aircraft, automobiles, and soybeans). That same day, Mr. Trump announced that he is looking for $100 billion additional Chinese goods to tax. Continue Reading

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