The United Kingdom’s new foreign investment screening law may draw more industry filings than first expected, Baker McKenzie lawyer Sunny Mann said. Although the U.K.’s new National Security and Investment Act doesn’t officially take effect until Jan. 4, Mann said many companies are already showing signs they plan to be careful and notify the U.K. before closing investment deals, rather than waiting for the government to intervene.
The Senate is “likely” to vote on the annual defense policy bill this week, which could include the Senate-passed U.S. Innovation and Competition Act of 2021, Senate Majority Leader Chuck Schumer, D-N.Y., said. In a Nov. 14 letter to lawmakers, Schumer said “there seems to be fairly broad” bipartisan support for adding USICA to the National Defense Authorization Act, which would allow a USICA negotiation with the House “to be completed alongside” the NDAA before the end of the year. The House plans to write its own version of USICA.
The U.S. should closely review the planned acquisition of Ports America by the Canada Pension Plan Investment Board, which would cede U.S. control over the largest terminal operator in North America, the Federal Maritime Commission said in a letter to Treasury Secretary Janet Yellen. The acquisition would allow minority investor CPP Investments to hold “exclusive interest in a strategic United States enterprise,” the FMC said, and could allow Canada to increase diversion of U.S.-bound cargo through Canadian ports.
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.