The Treasury Department is considering extending the deadline by which three U.S. allies must meet certain criteria to remain eligible for a foreign investment review exemption, the agency said last week. Treasury’s proposed rule would extend the deadline for one year to give Australia, Canada and the United Kingdom more time to cement their positions as excepted foreign states and excepted real estate foreign states, which excludes them from certain screening requirements by the Committee on Foreign Investment in the U.S. Comments on the proposal are due Dec. 15.
A Senate bill with bipartisan support would expand which deals involving sensitive personal U.S. data must be declared to the Committee on Foreign Investment in the U.S. The Protecting Sensitive Personal Data Act, introduced this month by Sens. Marco Rubio, R-Fla., and Raphael Warncok, D-Ga., would require mandatory declarations for investments that involve a range of personal data information, including genetic test results, health conditions, insurance applications, financial hardship data, security clearance information, geolocation data, private emails, data for generating government identification and credit report information. Warnock said “foreign entities” are investing in U.S. companies to “exploit” this data. “We need to strengthen CFIUS’s oversight authority of these transactions to protect Americans and mitigate this serious national security threat,” Rubbio said.
The Committee on Foreign Investment in the U.S. began another national security investigation into Beijing’s Wise Road Capital's proposed acquisition of South Korea's Magnachip Semiconductor Corporation after the companies were granted a request to refile with the committee in September (see 2109160037). CFIUS’s new investigation period began in late October and is expected to be completed by Dec. 13, Magnachip said in an Oct. 29 Securities and Exchange Commission filing. The U.S. was expected to reject the transaction before Magnachip requested to refile. CFIUS’s intervention in the deal, which wasn’t voluntarily notified to the committee, could set a new precedent for investment reviews and lead to more extraterritorial screening by U.S. trading partners (see 2110140035).
Sen. John Kennedy, R-La., reintroduced a bill that would require a review by the Committee on Foreign Investment in the U.S. for all “greenfield” investments made by certain Chinese businesses on U.S. soil. The bill, introduced last week, would specifically require CFIUS to look at any foreign investment that “involves the acquisition of real estate in the U.S. and the establishment of a U.S. business on such real estate” and that “results in China’s direct or indirect control of that U.S. business.” These investments would trigger a mandatory declaration with CFIUS if China’s government has a “substantial interest” in the deal.
Sun Life Financial, a Canadian financial services firm, plans to submit a “pre-filing draft of a notice” to the Committee on Foreign Investment in the U.S. regarding its acquisition of U.S. oral healthcare company DentaQuest. The parties will “use reasonable best efforts to provide any information requested” by CFIUS, Sun Life said in an October Securities and Exchange Commission filing. Sun Life plans to buy DentaQuest for $2.48 billion.
Export Compliance Daily is providing readers with the top stories for Oct. 11-15 in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.
The Committee on Foreign Investment in the U.S. approved the acquisition of U.S.-based GP Strategies by United Kingdom-based Learning Technologies Group (see 2108160020). CFIUS approved the deal Oct. 7, LTG said in a Securities and Exchange Commission filing. LTG, a provider of digital workplace learning technologies, completed the acquisition, it said Oct. 15. GP Strategies is a workforce solutions provider.
U.S. intervention in the transaction between South Korea’s Magnachip Semiconductor Corp. and Beijing’s Wise Road Capital could set a new precedent for investment reviews and lead to more extraterritorial screening by U.S. trading partners in Europe and elsewhere, lawyers said.
A Chinese technology company this month signed a national security agreement with the Committee on Foreign Investment in the U.S. involving the company’s 2016 acquisition of a U.S. data services firm. CFIUS and China-based Genimous Technology on Oct. 1 finalized the NSA, which outlines several conditions for Genimous’ acquisition of U.S.-based Spigot, Yicai Global, a Chinese state-run media organization, reported Oct. 8. According to the NSA, Genimous will hire a CFIUS-approved safety director and a safety compliance officer to oversee certain “data security issues,” the report said. Genimous must also store all personal data on U.S. users within the U.S. and can’t export that data to “any other associated firms” without approval from the safety director. Genimous must also restructure its “overseas associate firm” so that the majority of its board of directors -- who will be subject to CFIUS approval -- are U.S. citizens.
Lawmakers introduced a bill last week that would seek to further protect the U.S. agriculture industry from “improper” foreign investment and add the agriculture secretary to the Committee on Foreign Investment in the U.S. The Foreign Adversary Risk Management Act, introduced in the Senate by Tommy Tuberville, R-Ala., and in the House by Ronny Jackson, R-Texas, and Filemon Vela, D-Texas, would address that CFIUS “does not directly consider the needs of the agriculture industry when reviewing foreign investment and ownership in domestic businesses,” the lawmakers said.