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Key Takeaways:

  • Technology Infrastructure and Data. CFIUS will focus its review on investments in critical Technology, critical Infrastructure, and sensitive personal Data (“TID Businesses”).
    • Critical technologies is defined to include certain items subject to export controls along with emerging and foundational technologies under the Export Control Reform Act of 2018.
    • CFIUS provides a very helpful list of critical infrastructure and functions to help assess whether any business is a TID Business. We reproduce most of this list at the end of this blog article. (Sneak preview: telecom, utilities, energy, and transportation dominate the list.)
    • The proposed regulations provide much-needed guidance on what constitutes sensitive personal data and also seek to limit the reach of the definition so it does not cast too wide a net over transactions in which CFIUS really should have no national security concern.
  • Exceptions for Certain Countries. Investors from certain countries may be excepted from CFIUS jurisdiction when making non-controlling investments.
  • New Set of Rules for Real Estate. In a companion piece, CFIUS proposed for the first time a detailed set of rules related to investments in real estate. We will cover this in a separate blog article to be published in the near future.
  • Expansion of Short-Form Declaration Use. The proposed rules provide parties the choice to use a short-form declaration for any transaction under CFIUS jurisdiction in lieu of a long-form notice.
  • Comments Due by October 17, 2019. Members of the public may submit comments on the proposed regulations any time between now and October 17, 2019. Final regulations must be adopted by CFIUS and become effective no later than February 13, 2020.

Continue Reading CFIUS Proposes Rules to Implement FIRRMA

“A free and open economy is the foundation of global peace and prosperity.”
– Prime Minister Shinzo Abe, G20 summit, June 2019.

On July 1, 2019, only few days after Japanese Prime Minister Shinzo Abe opened the G20 summit with a speech endorsing an open global economy, the Japanese government announced that it will impose tighter controls on technology-related exports from Japan to South Korea for reasons of national security. The controls may have a devastating effect on trade between the two countries and will create further drag on the world economy.
Continue Reading A Chinese Export License to Get a Smart Phone? Tech-Tonic Changes in World Export Controls

An updated version of this article was posted on January 16, 2020.

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.

** Updated as of September 3, 2019 **Continue Reading China Trade War Scorecard: Keeping Track of Tariffs

On May 16, 2019, a sweeping U.S. export control rule went into effect that will impact the U.S. tech industry, but may also create an outsized risk for non-U.S. manufacturers. The rule, issued by the U.S. Department of Commerce, Bureau of Industry and Security (BIS) adds Huawei Technologies Co., Ltd. (Huawei) and 68 of its affiliates to the Entity List. That designation effectively prohibits the export, reexport, and retransfer of all U.S.-origin “items subject to the Export Administration Regulations (EAR)” to those entities. The designation arises from a U.S. government finding that the restrictions are warranted on U.S. national security and foreign policy grounds.
Continue Reading Hua-Wait a Minute: Entity Designation Affects Non-U.S. Manufacturers’ Exports to China Tech Giant

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

This article originally appeared in Risk & Compliance magazine in the UK, a publication of Financier Worldwide. The piece includes UK spelling and grammar.

Key Takeaways:

A wave is coming. An enormous wave of regulation will soon crash on Silicon Valley, Boston and other tech centres around the United States, and very few people have their surfboards ready.

Major technologies in exciting emerging fields (among them, biomedicines, virtual reality, and robotics) will soon be subject to strict export controls that will limit who can receive the technologies, who can use them, and even who can research them.

Forthcoming export controls will disrupt logistics planning, information sharing, R&D, and acquisition strategies for companies in the United States and all around the world.
Continue Reading INTERNATIONAL TECH INVESTMENT ISSUE – A Wave of Export Regulation to Hit US Technologies

On March 8, the U.S. government signaled regulatory changes that may create new opportunities for international collaboration on satellite development, global sales of satellite and launch equipment, and even sharing launch technology.

. . . and the Government wants you to weigh in.
Continue Reading Clear for More Takeoffs: Now is the Time to Have Your Voice Heard on New Satellite and Launch Regulations

Picture your company being hauled into U.S. court to defend litigation for your Cuba business that is lawful in your home country. That is the scenario that the Trump administration and Cuba hawks in Congress are aiming to arrange. The Trump administration is preparing to part the practice of past presidents to allow U.S. persons to sue non-U.S., non-Cuban companies for doing business in Cuba, dealing in property seized by the Cuban government since the 1959 revolution.
Continue Reading The New Suits of Havana: How Non-U.S. Companies May Soon Be Sued for Their Business in Cuba