The Committee on Foreign Investment in the U.S. has asked a Ukrainian businessman and his technology company to sell its stake in Texas-based Firefly Aerospace due to national security concerns, Bloomberg reported Dec. 29. CFIUS is concerned that valuable U.S. technology could be transferred from Firefly to Ukraine or Russia via tech entrepreneur Max Polyakov and his firm Noosphere Venture Partners, the report said, and has asked the firm to sell its 50% stake in Firefly. Noosphere told CFIUS it plans to follow through with the request and sell its stake, the report said. Firefly, which develops commercial space launch vehicles, subsequently announced it would pause preparations for its next launch, according to a Dec. 30 report from SpaceNews. Noosphere told Bloomberg that it understands “CFIUS’s actions come amid rising tensions between Ukraine and Russia,” adding that the firm is “working diligently to address CFIUS’s concerns in the most efficient and appropriate manner possible.” Polyakov in 2020 agreed to step down from the company’s board and Firefly’s day-to-day activities “to help make it easier for the company to win U.S. government and military contracts and ease some of the underlying tensions,” Bloomberg said. Firefly, Noosphere and the Treasury Department, which chairs CFIUS, didn’t immediately respond to requests for comment.
The Defense Department recently issued a document outlining its procedures for reviewing transactions filed with the Committee on Foreign Investment in the U.S. The 45-page document, issued Dec. 16, “establishes policy, assigns responsibilities, and provides procedures for DoD participation” in CFIUS, including its national security investigations, the non-notified transaction process and communication with other committee members.
Beijing’s Wise Road Capital and South Korea's Magnachip Semiconductor Corporation terminated their merger, the two companies said this week. They received permission to withdraw their filing with the Committee on Foreign Investment in the U.S. after being told that CFIUS would not approve Wise Road’s acquisition of Magnachip.
Export Compliance Daily is providing readers with the top stories for Nov. 29 - Dec. 3 in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.
Several companies disclosed their filings with the Committee on Foreign Investment in the U.S. or updated the status of their ongoing CFIUS reviews this month. The filings describe one CFIUS notification involving a Taiwanese technology company, three CFIUS clearances, a transaction involving a U.S. email encryption company and more.
Export Compliance Daily is providing readers with the top stories for Nov. 15-19 in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.
The Treasury Department changed its comment period for a proposed rule issued this week that could extend a deadline related to the Committee on Foreign Investment in the U.S.’s excepted state provision (see 2111120017). In a correction issued Nov. 17, Treasury shortened the comment period deadline from Dec. 15 to Dec. 10. The agency is seeking feedback on whether it should give Australia, Canada and the United Kingdom more time to cement their positions as excepted foreign states and excepted real estate foreign states, which would exclude them from certain CFIUS screening requirements. A Treasury spokesperson didn’t comment.
The United Kingdom’s new foreign investment screening law may draw more industry filings than first expected, Baker McKenzie lawyer Sunny Mann said. Although the U.K.’s new National Security and Investment Act doesn’t officially take effect until Jan. 4, Mann said many companies are already showing signs they plan to be careful and notify the U.K. before closing investment deals, rather than waiting for the government to intervene.
The Senate is “likely” to vote on the annual defense policy bill this week, which could include the Senate-passed U.S. Innovation and Competition Act of 2021, Senate Majority Leader Chuck Schumer, D-N.Y., said. In a Nov. 14 letter to lawmakers, Schumer said “there seems to be fairly broad” bipartisan support for adding USICA to the National Defense Authorization Act, which would allow a USICA negotiation with the House “to be completed alongside” the NDAA before the end of the year. The House plans to write its own version of USICA.
The U.S. should closely review the planned acquisition of Ports America by the Canada Pension Plan Investment Board, which would cede U.S. control over the largest terminal operator in North America, the Federal Maritime Commission said in a letter to Treasury Secretary Janet Yellen. The acquisition would allow minority investor CPP Investments to hold “exclusive interest in a strategic United States enterprise,” the FMC said, and could allow Canada to increase diversion of U.S.-bound cargo through Canadian ports.