The Treasury Department recently released its annual report to Congress on covered transactions by the Committee on Foreign Investment in the United States during 2016 and 2017. The report includes trend data on the transactions, CFIUS investigations, business sectors involved in CFIUS filings and a “detailed discussion” of the “perceived adverse effects of covered transactions on the national security” of the U.S. The report also contains a section assessing whether there is “credible evidence of a coordinated strategy” by foreign governments to acquire critical U.S. technology. The report said foreign governments are “extremely likely” to use a “range of collection methods to obtain critical U.S. technologies,” saying U.S. tech is targeted by foreign “intelligence services, private sector companies, academic and research institutions, and citizens of dozens of countries.”
A former top Commerce and trade official said the U.S.’s recent efforts to reform export controls and foreign investment screening are some of the most consequential developments the trade industry has seen in years. “The passage of [the Export Control Reform Act] and [the Foreign Investment Risk Review Modernization Act] together represents one of the biggest changes in trade compliance probably in at least a generation,” said Chris Padilla, former undersecretary for international trade and former assistant U.S. trade representative.
Four Republican members of the House Financial Services Committee praised the Treasury Department’s proposed regulations for the Foreign Investment Risk Review Modernization Act but also criticized several key areas, according to comments released Oct. 29. The comments were signed by Reps. Patrick McHenry, R-N.C., Andy Barr, R-Ky., French Hill, R-Ark., and Steve Stivers, R-Ohio.
Companies and trade groups warned the Treasury Department that the proposed regulations for the Foreign Investment Risk Review Modernization Act may repel foreign investors and customers, fails to clearly define “critical technologies” and could place trusted trading partners at disadvantages, according to comments due Oct. 17.
The Congressional Research Service issued an Oct. 3 report detailing how the Foreign Investment Risk Review Modernization Act regulations will reform the Committee on Foreign Investment in the U.S. The report explains the new powers FIRRMA grants CFIUS, what changes are proposed, potential issues the regulations may pose for Congress, and how FIRRMA impacts reporting procedures and export controls. The Treasury Department released the proposed FIRRMA regulations in September, and comments are due Oct. 17 (see 1909180018).
Key elements of the Treasury Department’s recently released proposed regulations on the Foreign Investment Risk Review Modernization Act include an expanded jurisdiction to review “non-controlling investments” and certain exemptions to reviews, Crowell Moring said in a Sept. 19 post.
The Treasury Department released its proposed regulations for the Foreign Investment Risk Review Modernization Act of 2018, granting expanded authorities to the Committee on Foreign Investment in the United States, Treasury said in a Sept. 17 press release.
The Senate will likely confirm Tom Feddo as a top official for the Committee on Foreign Investment in the U.S., a “positive and timely development” for companies involved in foreign investment compliance, according to an Aug. 19 post from Arent Fox. Feddo is expected to be named the first assistant secretary of the Treasury for investment security. The position was created in 2018 to increase the authority of CFIUS when it enacted the Foreign Investment Risk Review Modernization Act, the post said.
Vinson & Elkins hired Damara Chambers, previously at Covington & Burling, as a partner and co-leader of the firm's national security practice, Vinson & Elkins said in a news release. "Chambers focuses her practice on national security reviews conducted by [the Committee on Foreign Investment in the United States] and other agencies, including the Defense Security Service and the Department of Energy in connection with the mitigation of foreign ownership, control or influence (FOCI), and the State Department in connection with reviews pursuant to the International Traffic in Arms Regulations," the firm said.
China’s progress toward its satellite ambitions show the need for stricter export controls, stronger collaboration on those controls with U.S. allies, and more staffing and funding for U.S. enforcement agencies, panelists said during a meeting on U.S. space-related export controls. The discussion, part of a series of panels hosted by the U.S.-China Economic and Security Review Commission on April 25, was billed as a conversation on China’s military-civil fusion. Lorand Laskai, a researcher at the Georgetown Center for Security and Emerging Technology, presented a dire outlook for the state of U.S.-China commercial space competition, saying China poses a major threat to U.S. export controls.