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DOJ is helping to oversee more cases before the Committee on Foreign Investment in the U.S., particularly those involving sensitive U.S. personal data, said Matthew Olsen, the agency’s assistant attorney general for national security. He said DOJ is now “co-leading” with the Treasury Department about one-fourth of CFIUS reviews, “if not more,” a significant increase from previous years.
Both outbound and a new approach for the Committee for Foreign Investment in the U.S. drew attention at a recent hearing of the House Select Committee on the Chinese Communist Party, and the chairman of the committee suggested that limiting investment screening to active investors, such as venture capital firms, is not enough.
The Committee on Foreign Investment in the U.S. is mitigating more investment deals and is hiring more staff to manage its increasing workload, said Paul Rosen, head of CFIUS. Rosen also said the committee is assessing more violations for breaches of mitigation agreements and is “for the first time” beginning to receive voluntary self-disclosures.
The Group of 7 countries likely will discuss sanctions, trade and a host of other issues at the upcoming summit in Japan, but the most consequential topic may surround the group’s emerging “de-risking” policy toward China, experts said this week. Several said they expect the G-7 countries to end the summit by releasing more information on the approach, although they also noted that not all Europeans yet agree with the strategy.
A bill recently passed by a Texas Senate committee could allow the Texas attorney general to submit information about non-notified investment transactions to the Committee on Foreign Investment in the U.S., Squire Patton said in a May 12 client alert. SB-2142, passed unanimously by the Texas Senate Committee on State Affairs April 25, is the “first of its kind creating a monitoring mechanism at the state level” for foreign direct investments, the firm said.
The Biden administration’s upcoming executive order on outbound investment is “likely to be coming in the next few weeks,” said Jeannette Chu, vice president for national security policy at the National Foreign Trade Council. Chu, speaking during a May 11 Materials and Equipment Technical Advisory Committee meeting, said she expects the new screening tool to be unveiled around or soon after the G-7 meetings in Japan next week.
Catherine Hein, former acting principal deputy assistant general counsel of enforcement and intelligence at the Treasury Department, has joined Latham & Watkins in its Washington, D.C.-based Committee on Foreign Investment in the U.S. and U.S. National Security Practice. While at Treasury, Hein also worked as the CFIUS managing counsel helping review cases before the committee. Her practice will focus on "matters involving CFIUS and US national security regulatory regimes," the firm said.
The Treasury Department is proposing to add eight military bases that would fall under the jurisdiction of the Committee on Foreign Investment in the U.S., including an Air Force base in North Dakota that was the subject of a controversial CFIUS decision last year. The proposed rule, released May 4 by Treasury’s Office of Investment Security, also would amend the definition for “military installation” to include six additional U.S. states. Comments on the changes are due June 5.
The Senate will work over the next several months to build a bill Majority Leader Chuck Schumer, D-N.Y., sees as a sequel to its China package -- also known as the Chips Act -- that could expand China-related export controls and investment restrictions.