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The United States has a well-established process for conducting national security-focused reviews of proposed foreign investments through the Committee on Foreign Investment in the United States, or CFIUS, the interagency committee responsible for vetting inbound foreign direct investment. The parameters for such reviews have changed significantly with the passage of the Foreign Investment Risk Review Modernization Act, or FIRRMA, on August 13, 2018. New regulations implementing FIRRMA have just been issued and are effective February 13, 2020. Notably, the new framework provides for mandatory filings for certain transactions, a change from what had previously been an all voluntary regime. In addition, the Export Control Act of 2018, passed at the same time as FIRRMA, established an interagency process for identifying and controlling “emerging and foundational” technologies. The Bureau of Industry and Security of the Department of Commerce, or BIS, issued an advance notice of proposed rulemaking seeking guidance on identifying emerging technologies, and has now begun the process of developing controls for discrete emerging technologies. An advance notice of proposed rulemaking for “foundational” technologies is expected to be issued soon. Foreign and domestic parties, along with their counsel, will need to understand the reach and implications of both of these new laws to any transaction that involves foreign investment.
In this presentation, seasoned practitioners Greta Lichtenbaum, partner with O’Melveny & Myers LLP, and Anne W. Salladin, partner in the International Trade Group of Hogan Lovells US LLP, will discuss:
- The basics of foreign investment and the role of CFIUS;
- The key provisions of FIRRMA and implications;
- Summary of the FIRRMA rules effective on February 13, 2020;
- Implications of new rules for foreign and domestic companies; and
- The status of BIS’s rulemaking.
Program Level: Overview
Intended Audience: In-house counsel, outside attorneys, board members, corporate officers, and other allied professionals involved in foreign transactions
Prerequisites: Interest in foreign transactions, foreign relations issues and compliance
Advanced Preparation: None