CFIUS reviews inbound investments for national security concerns and has the authority to impose conditions on investments, block investments, and order divestment. Even transactions that do not clearly raise national security concerns may nonetheless draw the attention of CFIUS agencies, Congress, and the President. To navigate the CFIUS process efficiently and successfully, businesses must be attuned to an array of complex and sensitive legal, commercial, political, and public relations issues.
Global Outlook and Influence
Outside the United States
Many jurisdictions around the world have adopted, or are considering adopting, regulations to screen foreign investment on national security and public order grounds. In today’s world, investors need to be cognizant of these regulations, as the consequences for failing to comply are potentially severe. Divestment orders, and civil and criminal penalties, are possible in many cases, and such actions can result in significant reputational consequences. Sidley is well positioned to advise clients on these matters worldwide.
Proficiency in Related National Security Areas
The U.S. government and other governments have put in place an array of other processes and requirements that apply in addition to the investment screening process and that may influence investment screening decisions. These processes include the following:
- PDSTI, a Chinese company, investing in ICON Aircraft, Inc. (recognized for “Deal of the Year” by China Business Law Journal)
- A Chinese company investing in the media sector
- A U.S. investment fund in the sale of a regional railway to a Mexican investor
- A U.S. stock exchange being sold to Chinese investors
- A French company in the acquisition of two U.S. manufacturing companies, one of which was a defense contractor
- A Japanese company in the acquisition of a U.S. manufacturing company in the defense sector
- A Chinese company in an acquisition in the semiconductor sector
- A sovereign wealth fund in an investment in a U.S. company involved in processing, transporting, and storing natural gas, natural gas liquids condensate, and crude oil
- A sovereign wealth fund in an investment in a U.S. software company
- A sovereign wealth fund in an investment in a U.S. data management company
- A sovereign wealth fund in an investment in a U.S. company providing electricity transmission services
- A sovereign wealth fund in an investment in a U.S. company providing certain telecommunications and data services
- A sovereign wealth fund in investments in the U.S. power generation sector
- A foreign investor in an investment in the satellite sector
- A Japanese company in an investment in the pipeline sector
- An Israeli company in an investment in a defense contractor
- A Chinese company investing in a U.S. auto parts manufacturer
- A Chinese company investing in the energy sector
- A major U.S. multinational in the sale of a manufacturing division to a European company
- A Chinese company on investments in the technology and telecommunications sectors
- U.S. investors with respect to a joint investment with a Chinese entity in the mining sector
- A U.S. company in the semiconductor sector with respect to a potential investment by a Chinese company
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