One of the largest impacts felt from the drastic change in mandate and reach of the Committee on Foreign Investment in the U.S. in the last few years is how lawyers, business people and investors are viewing the committee. Speaking at a Capitol Forum webinar on Feb. 4, three CFIUS industry experts highlighted how far more resources are being exerted on CFIUS compliance measures than at any time since its inception. This is largely due to the Foreign Investment Risk Review Modernization Act of 2018, which greatly overhauled CFIUS's responsibilities, including introducing certain mandatory filings for certain foreign transactions (see 1910310053).
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More foreign investors are opting to submit a filing with the Committee on Foreign Investment in the U.S. out of an abundance of caution, even when there is no mandatory filing requirement, George Grammas, a trade lawyer with Squire Patton, said. Grammas said “sophisticated” investors are especially likely to file before the investment is complete, particularly as CFIUS continues a trend of reviewing years-old investments.
The Committee on Foreign Investment in the U.S. will maintain its focus on Chinese investment, prioritize enforcement and continue to tweak its jurisdiction under the Joe Biden administration (see 2009170017 and 2010270050), trade lawyers said. CFIUS also will likely continue to see an increase in filings, the lawyers said.
As China continues to gain ground in technology competition with the U.S., Congress should pursue more investment and visa restrictions to prevent China from accessing sensitive U.S. technologies, the U.S.-China Economic and Security Review Commission said in a Dec. 1 report. Commissioners said China’s access to U.S. technologies is helping it innovate and export surveillance tools and other advanced technologies globally.
Taiwan wants to continue the momentum from its November economic dialogue with the U.S. to begin negotiating a trade deal and collaborate more on investment screening, Taiwan’s representative to the U.S. said. Bi-khim Hsiao, an official with Taipei’s Economic and Cultural Representative Office, said the island is particularly interested in boosting its screening mechanisms for foreign investments.
Freshfields hired Colin Costello, previously acting director of the National Intelligence Council’s Investment Security Group in the Office of the Director of National Intelligence, the law firm said in a news release. Costello worked closely with the Committee on Foreign Investment in the U.S. process while in government and will be a CFIUS client adviser, the firm said.
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Dorsey & Whitney added international lawyer Justin Huff, previously with Jones Day, as a partner. He has experience with technology, telecom and other sectors in analyzing transactions for the Committee on Foreign Investment in the United States (CFIUS) reviewing national security matters, Dorsey said in a news release.
The Committee on Foreign Investment in the U.S. is placing more of an emphasis on enforcement and outreach after the committee’s jurisdiction was expanded earlier this year, trade lawyers said. The lawyers also said they are noticing more transactions being notified to CFIUS, especially those that involve personal data and critical technologies.