Although the Committee on Foreign Investment in the U.S. allowed Magnachip Semiconductor Corp. to refile its proposed acquisition by Beijing-based Wise Road Capital (see 2109160037), the deal seems highly unlikely to pass CFIUS scrutiny, trade lawyers said. Finding pathways to mitigate the national security risks identified by CFIUS will be extremely challenging, they said, particularly as the U.S. increases its focus on stopping China from acquiring advanced semiconductor equipment.
The Committee on Foreign Investment in the U.S. granted a request from Magnachip Semiconductor Corp. and Wise Road Capital to withdraw and resubmit their initial CFIUS filing, Magnachip said in a Sept. 14 filing with the Securities and Exchange Commission. This will allow the two companies more time for “further discussion” with CFIUS about potential pathways to mitigate the national security risks CFIUS had identified in the merger. CFIUS’s new review period for the merger began Sept. 14 and will conclude no later than Oct. 28, the committee told Magnachip in a Sept. 13 letter. CFIUS may extend the review period if warranted.
The Biden administration is likely to increase export controls and sanctions enforcement in the next few years, Gibson Dunn lawyers said during a webinar this week. They also said the administration is likely to pursue enforcement in creative ways, including sometimes through disclosures with the Committee on Foreign Investment in the U.S.
Export Compliance Daily is providing readers with the top stories for Sept. 7-10 in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.
Richard Sofield has joined Vinson & Elkins as a partner in its National Security and International Trade practice in Washington, the firm said. Sofield joins from Wiley Rein, where he led the Committee on Foreign Investment in the U.S. practice group, focusing on cross-border investment and national security matters, the firm said. For 24 years before joining Wiley Rein, Sofield worked as a government attorney, including as director of the foreign investment review staff for the National Security Division at the Department of Justice. Overseeing DOJ's participation in CFIUS, Sofield reviewed more than 1,000 acquisitions for national security purposes, the firm said.
Export Compliance Daily is providing readers with the top stories for Aug. 30 - Sept.3 in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.
As the U.S. continues to bolster and reform the Committee on Foreign Investment in the U.S., industry lawyers have seen a sharp rise over the last few years in global foreign direct investment screening regimes. That trend may continue to accelerate, some said.
The Commerce Department’s delay in issuing emerging and foundational technology controls may not be hampering U.S. foreign investment reviews as much as some lawmakers have suggested, trade lawyers said. Although the Committee on Foreign Investment in the U.S. doesn’t yet have a clear set of Commerce-defined critical technologies to target, that has not slowed down CFIUS from catching non-notified deals in critical technology sectors, the lawyers said in interviews, especially those involving semiconductors (see 2109010051).
The proposed merger between Magnachip Semiconductor and Wise Road Capital (see 2106150039) was likely never going to avoid U.S. scrutiny, a trade lawyer said, and it is puzzling why the two companies didn’t voluntarily submit a declaration to the Committee on Foreign Investment in the U.S. Scott Flicker, who advises clients on CFIUS matters for Paul Hastings, said the decision was either a mistake or a calculated decision by the two companies’ lawyers.
Fenwick & West will open an office in Washington, D.C., adding two partners for the new office, the firm announced on Aug. 31. Thomas Ensign and Melissa Duffy will both serve as partners in Fenwick's Antitrust and Trade Regulation practice. Duffy, who comes from Dechert, "advises on export controls, sanctions, trade policy, programs under the Office of Foreign Assets Control (OFAC), regulation of emerging technologies, digital trade, CFIUS and national security issues involving U.S. agencies," Fenwick said. Ensign is an antitrust adviser on issues including intellectual property agreements, distribution arrangements and joint ventures. Fenwick, which says it concentrates on serving the technology and life sciences industries, has offices in California, New York City, Seattle and Shanghai.