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.
The U.S.’s new export restrictions over certain biological equipment software could have a major impact on life science companies, universities and research organizations, and could present significant foreign investment screening hurdles, law firms said. While the restrictions were issued multilaterally and will only seek to stop certain software exports that can be exploited for biological weapons purposes, firms warned that the new restrictions could still be difficult to manage.
Brian Egan joined Skadden Arps as a partner in its Council on Foreign Investment in the U.S., National Security and International Trade Group, the firm announced. Egan, who joins the firm from Steptoe & Johnson, formerly served as the senior-most lawyer at the State Department and the White House's National Security Council. At Skadden, Egan will advise on “all aspects of export controls,” and will counsel clients on CFIUS reviews and foreign investment matters, the firm said.
Jonathan Wakely was promoted to partner in Covington & Burling's practice on foreign investment and national security issues, with a focus on transactions before the Committee on Foreign Investment in the U.S., the firm said. Wakely regularly represents clients before CFIUS and other national security-related matters, the firm said.