The Committee on Foreign Investment in the U.S. is “demanding” that TikTok’s owner, China-based ByteDance, sell its shares in the app or face a potential U.S. ban of the app, The Wall Street Journal reported March 15. The CFIUS demand, which the report said came “recently,” is a major shift in policy for the Biden administration, which has been reviewing TikTok for months (see 2209260008). It also comes amid pressure from Congress to quickly conclude the review with strong restrictions between the app and ByteDance (see 2302220024). The Treasury Department didn’t comment.
The Committee on Foreign Investment in the U.S. should “be prepared to carefully review” any investments related to the closures of Silicon Valley Bank and Signature Bank, Sen. Marco Rubio, R-Fla., said in a March 15 letter to Treasury Secretary Janet Yellen. Rubio said he’s concerned China and its companies may be looking to “exploit this moment for their own” benefit after both banks collapsed this week.
The Committee on Foreign Investment in the U.S. is placing a significant focus on investments that could present data or cybersecurity risks, said CFIUS head Paul Rosen and FBI official Cynthia Kaiser. Rosen also said CFIUS continues to actively pursue non-notified deals and said the administration is still discussing the idea of an outbound investment review regime.
Although the Committee on Foreign Investment in the U.S. has increased scrutiny of Chinese investments in recent years, it still continues to clear a range of transactions involving China, said Antonia Tzinova, a CFIUS lawyer with Holland & Knight. Chinese investors are using several tactics to ensure their deals aren’t blocked, Tzinova said, and in some cases are restructuring their investment agreements.
The Biden administration's FY 2024 budget request includes funding to support a new outbound investment review “program” and more money for U.S. agencies to carry out export control and sanctions authorities.
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Senators have enough bipartisan support to add the USDA secretary to the Committee on Foreign Investment in the U.S. and expand CFIUS jurisdiction to cover a broader range of agriculture-related purchases, lawmakers said this week. Several said the committee isn’t doing enough to prevent Chinese government-affiliated companies from purchasing U.S. land and want to expand its reach, particularly after CFIUS determined last year that it didn’t have the jurisdiction to intervene in a Chinese purchase of land near a North Dakota Air Force base.
The Committee on Foreign Investment in the U.S. should look to review a licensing agreement between Ford and a Chinese battery manufacturer, Sen. Marco Rubio, R-Fla., said in a recent letter. Rubio said the agreement would allow Ford to establish a Michigan factory that would license its technology from China’s Contemporary Amperex Technology Co. Ltd. (CATL), which the senator said is the world's largest electric vehicle battery producer and has ties to the Chinese government.
The Committee on Foreign Investment in the U.S. will be especially active this year, BakerHostetler lawyers predicted in a webinar hosted by the law firm last week. Lawyer Scott Jansen said he believes “there's going to be actual CFIUS enforcement” despite the committee not issuing an enforcement penalty since 2019. “We believe that there is a great chance that there'll be serious penalties in 2023,” Jansen said, adding that he expects CFIUS to continue to prioritize China-related transactions.
The Committee on Foreign Investment in the U.S. should “swiftly” conclude its review of TikTok (see 2212210007) and impose “strict structural restrictions” between the app and its Chinese parent company ByteDance, two senators said in a letter to Treasury Secretary Janet Yellen last week. Sens. Richard Blumenthal, D-Conn., and Jerry Moran, R-Kan., said CFIUS should consider "separating" TikTok and ByteDance, adding that reports of the app’s collection of U.S. private data prove TikTok and ByteDance “cannot be trusted by CFIUS or its tens of millions of users in the United States.”