On November 26, 2019, the U.S. Department of Commerce issued a proposed rule that could change how you procure IT goods and services.
The rule
Timely Updates and Analysis on Key International Trade Law Issues
On November 26, 2019, the U.S. Department of Commerce issued a proposed rule that could change how you procure IT goods and services.
The rule
My VC Fund has U.S. and non-U.S. General Partners, will I need to file CFIUS declarations for every investment I want to make in tech, …
Continue Reading Who’s the Boss? The CFIUS “Control” Definition for Global Venture Capital Funds
By now, you have skimmed through the proposed FIRRMA regulations issued on September 17 2019, and you have very likely read a dozen summaries of…
Continue Reading The Golden Ticket: Will Your Company be Excepted from New CFIUS Regulations?
Key Takeaways:
Over the past year, the impact of international political risks on the global tech industry has been unprecedented.”
– Tung Tzu-hsien, Chairman of iPhone’s Chinese assembly company, Pegatron
Technology investment is getting harder. A few years ago, strategic and private equity technology acquisitions, multinational joint venture creation, and cross-border R&D collaboration were not only relatively straightforward, they were an economic engine driving the global technology economy.
Now, U.S. export controls, technology transfer restrictions, CFIUS and other investment reviews, and tariffs and non-tariff barriers have begun to limit the options for successful transactions in the tech sector. In this article, we examine the new and emerging challenges and suggest a strategies for navigating the changing currents of global trade and politics to get your deal done despite the shifting landscape.…
Continue Reading INTERNATIONAL TECH INVESTMENT ISSUE – Threats to Technology Investment from Global Politics: How to Succeed as Borders Tighten
The Committee on Foreign Investment in the United States, CFIUS, is the U.S. government agency that conducts national security reviews of foreign direct investment in the United States. The CFIUS rules have been significantly tightened over time, which has created major obstacles, particularly to technology investments, and particularly for Chinese investors.
But as investors turn elsewhere looking for more a more streamlined investment process, they may be disappointed. Around the world, countries are creating new laws, or dusting off old ones, to allow their governments to examine and restrict foreign investment.
This article presents an overview of the emerging (or reemerging) foreign investment legal regimes in the EU – including domestic laws in France, Germany, Italy and the UK – Canada, Norway, South Korea, Japan, Australia, and New Zealand. For brevity in this article, we summarize our analysis in graphics and tables. However, we recommend that investors obtain a thorough legal analysis from local counsel before proceeding with an investment in any of the countries discussed here.…
Continue Reading INTERNATIONAL TECH INVESTMENT ISSUE – Investments With Borders: CFIUS-Style Foreign Investment Review Goes Global
Finally, the much awaited harmonized screening framework of foreign investments into the EU (Regulation 2017/0224) has been agreed upon on 20 November 2018 by the EU Parliament, the Council and the Commission.
The agreed package will ensure that the EU and its Member States are equipped to protect their “essential interests” while remaining “one of the most open investment regimes” in the world. Protecting an open economy may sound like a comical oxymoron, but the press release of the European Commission on this topics does make for an amusing read!
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Continue Reading The Traps of a CFIUS Like EU FDI Screening Mechanism
Key Takeaways:
Export controls and other regulations often lag a step or two behind the times. That trend has accelerated with the pace of technological advancement. As a result, for many years, technical know-how in many cutting-edge technical fields has not been subject to export controls. This has meant that many commercial technical innovations could be freely exported without significant restrictions. As long as they were not designed for a military application, and no encryption technology involved, many new ideas developed in the United States were simply unaccounted for in the U.S. Export Administration Regulations (EAR).
But the U.S. Department of Commerce, Bureau of Industry and Security (BIS) is about to make up a lot of ground in a single, large leap.…
Continue Reading The Little Regulation That Will Make a Big Change in How You Do Business: Department of Commerce to Establish New Export Controls on Emerging Technologies
Background
On August 13, 2018, President Trump signed FIRRMA into law. FIRRMA is a transformational expansion of the authority of the Committee on Foreign Investment in the United States (CFIUS) to review certain transactions that previously eluded the Committee’s jurisdiction (discussed in our blog, here). Congress left many critical aspects of the FIRRMA framework to be addressed through regulations promulgated by the Department of Treasury. Although we do not expect final rules to be forthcoming until late 2019 or early 2020, Congress empowered the Department of Treasury to “test-drive” parts of FIRRMA through Pilot Programs. Those programs can be implemented simply, taking effect 30 days after publication of the program requirements in the Federal Register. The adoption and implementation of the Pilot Program for critical technologies represents the Department of Treasury’s first attempt to implement substantive parts of FIRRMA prior to issuing formal regulations.…
Continue Reading FIRRMA Takes Form as CFIUS Enacts a New Pilot Program Targeting “Critical Technologies”
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 Expanding CFIUS: New Law Strengthens And Slows Investment Review
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