Lawmakers are again expressing concern about the U.S. national security review of TikTok (see 2211230033), saying they fear the Committee on Foreign Investment in the U.S. will allow the app to continue operating in the U.S. without divesting itself from its Chinese owner Bytedance.
Sen. Marco Rubio, R-Fla., criticized the U.S. decision not to intervene in the purchase of North Dakota farm land by China-based Fufeng Group, saying the acquisition threatens U.S. national security. “The Chinese Communist Party should not be allowed to purchase land near our military bases. It is dangerous and dumb,” Rubio said in a Dec. 14 statement. “Congress mandated that [the Committee on Foreign Investment in the U.S.] protect America’s national security and that should be its first priority, not making it easier for Chinese businesses, with ties to Beijing, to operate in the United States.”
The Committee on Foreign Investment in the U.S. recently cleared a U.S.-Singapore acquisition in the real estate industry, Squire Patton said in a Dec. 12 alert. CFIUS cleared the $14 billion acquisition of U.S.-based STORE Capital by Singapore-based GIC Private Limited and U.S.-based Blue Owl Capital. STORE Capital is an “internally managed net-lease real estate investment trust,” and GIC and Blue Owl are investors.
Mike Walsh, former chief of staff and acting general counsel at the Commerce Department, has joined Shearman & Sterling as a partner in the Washington, D.C., office's litigation wing, the firm announced. His practice will center on the national security elements of cross-border transactions, including matters involving the Committee on Foreign Investment in the U.S., export controls, Office of Foreign Assets Control sanctions and other cross-border investment proceedings. From 2018 to 2021, Walsh oversaw "legal initiatives" at Commerce, including CFIUS, export enforcement functions and appellate litigation. Most recently, Walsh was a partner at Foley & Lardner.
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The Treasury Department is seeking public comments on an information collection involving the Committee on Foreign Investment in the U.S.’s expanded jurisdiction under the Foreign Investment Risk Review Modernization Act of 2018. FIRRMA expanded CFIUS jurisdiction to allow it to review certain non-controlling foreign investments, certain real estate transactions involving foreign parties and more. Comments on the collection are due by Dec. 27.
Zendesk, a U.S.-based software-as-a-service provider, said it received U.S. approval regarding its acquisition by an investor group led by investment firms Permira in the U.K. and Hellman & Friedman, headquartered in California. The company had submitted a voluntary notice to the Committee on Foreign Investment in the U.S. and received “written notice” from CFIUS Nov. 17 that it “had concluded its review and cleared the transaction,” Zendesk said in a Nov. 17 SEC filing. The company expects the acquisition to be completed Nov. 22.
Days after President Joe Biden said the U.S. may investigate billionaire Elon Musk’s purchase of Twitter for national security reasons, Treasury Secretary Janet Yellen said she sees “no basis” for doing so, CBS reported Nov. 15. Yellen told CBS that she wasn’t “sure precisely what [the president] had in mind, but we are -- we have really no basis -- to the best of my knowledge -- to examine his finances of his company. I'm not aware of concerns that would cause us” to investigate. Yellen’s comments came less than a month after Bloomberg reported that the administration was weighing whether it should subject the deal to a review by the Committee on Foreign Investment in the U.S. (see 2210210018).
The U.S.’s best option to address potential national security risks arising from TikTok is through a foreign investment review rather than an outright ban, said James Lewis, a technology policy expert with the Center for Strategic and International Studies.
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