Media Coverage
Source: Bloomberg BNA's Mergers & Acquisitions Law Report
Media Coverage
Press Contacts: Erik Cummins, Matt Hyams, Taina Rosa, Olivia Thomas
07.30.18
Final language of a new law reforming national security reviews of foreign investments may make it possible for the Committee on Foreign Investment in the U.S. (CFIUS) to effectively create a “black list” of countries and individuals whose investment activity receives extra scrutiny, Bloomberg reports.
The legislation is a result of House and Senate negotiations and is designed to enact reforms to the CFIUS deal review process by defining which foreign persons or countries will receive the most scrutiny. The bill also authorizes CFIUS to review more types of deals than it does presently, “including those in which a ‘foreign person’ would gain access to critical U.S. technologies or infrastructure,” according to Bloomberg.
Matthew Rabinowitz, a senior associate in Pillsbury’s International Trade practice and frequent contributor to the firm’s Global Trade & Sanctions blog, says the bill’s language puts the onus on CFIUS to determine its definition of a foreign person.
“[The language] isn’t as clear as some of the earlier versions that were circulating,” he told Bloomberg. It’s a compromise version that sort of punts the issue to CFIUS and kicks the can down the road a little bit.”
Regardless of the final approach CFIUS takes, Rabinowitz says there’s no question the review process reforms will impact Chinese investments.
“There’s no way CFIUS would issue regulations that aren’t targeted at making sure China [is scrutinized],” he said.