In our latest edition of “Ten With Tom,” the former head of CFIUS provides his thoughts on the Committee’s 2022 report to Congress, and on the President’s Executive Order on outbound investment. Whatever you do: Don’t call it “reverse CFIUS.” Details and insights inside.
Last year, our readers predicted that the Biden administration would issue an Executive Order on outbound investment before summer 2023. Wow, were they close. The E.O. was released this afternoon, and, as anticipated, will ban investments in certain Chinese technologies. Detail, E.O. inside.
Setting aside the new Executive Order on outbound foreign investment, the U.S. Senate has approved an amendment to the National Defense Authorization Act to add mandatory notification of certain investments in adversarial nations such as China. Details and the amendment are inside.
In our latest episode of “Ten With Tom,” former Treasury Department Assistant Secretary for Investment Security Thomas Feddo — now founder of The Rubicon Advisors — discusses why an Executive Order is the wrong approach, and explores some alternatives to an E.O.
We’ve got a live outbound case study, folks. Last week, Moderna inked a deal to invest $1 billion in mRNA research and development in China. So, would that deal have triggered outbound scrutiny — and increased deal friction — were an outbound review regime in place? Expert insights inside.
A new report out of Georgetown University may be the first to analyze data on outgoing U.S. investment into Chinese artificial intelligence companies. The report includes a wealth of data, and may offer much-needed context for a possible outbound regime. Details and the report are inside.
Last week, Patrick McHenry (R-NC) sent a letter to U.S. Treasury Secretary Janet Yellen questioning the merits of an Executive Order on outbound investment. The letter made two references to “the White House’s interest in declaring a national emergency” to justify the move. Details inside.
In a joint statement, the G7 said it recognized that “appropriate measures designed to address risks from outbound investment could be important to complement existing tools” like export controls, but we’re still waiting for a formal Executive Order from the Biden Administration. Details inside.
Last week, Treasury Secretary Janet Yellen confirmed that outbound foreign-investment reviews are coming, and details of the regime are starting to emerge. The latest on timing, a FIRRMA-like pilot program, the notification process, any “look-back” provisions, and more are inside.
In a speech last week in Brussels, European Commission president Ursula von der Leyen reiterated that the EC is considering “a targeted instrument on outbound investment.” The regime would likely relate to a “small number” of sensitive technologies. Details and speech inside.
While law firms have been informing their clients that an outbound foreign-investment review regime is imminent, financial services firms have been relatively silent. Until now. At least one firm expects to see increased due diligence costs, and admits that portfolio managers have already been impacted.
Right before the new year, President Biden signed a $1.7 trillion spending bill that includes a number of new priorities. Among them: Funding “to consider establishing a program to address the national security threats emanating from outbound investment.” Details, deadlines, and funding inside.
South Dakota’s Kristi Noem is the latest governor to call for a review of the state’s investments to determine whether it has any stakes in Chinese companies. She’s not the first governor to conduct a “national security audit,” which we predicted would become more common. Details inside.
Outbound investment reviews are not on the radar screens of U.S. institutional investors or companies. Yet. That’s according to a new FIW survey, which showed nearly half weren’t aware of the potential for outbound investment reviews. Details on impact, preparedness, and expert insights are inside.
The vast majority of Foreign Investment Watch readers (69.1%) believe that President Biden will issue an Executive Order requiring national-security reviews of outbound foreign investments in China and other nations. Details on timing and the business impact are inside.
National security experts debated an outbound foreign investment regime at a recent Senate Banking Committee hearing. According to one expert, whatever the U.S. adopts, “we should be prepared for other countries to develop similar authorities.” Summary, details and testimony inside.
Three U.S. Senators and five Representatives, including Speaker of the House Nancy Pelosi, have sent a letter to President Biden urging his administration to “move forward with executive action” on an outbound foreign-investment review regime. Details and the actual letter are inside.
As rumors of a forthcoming Executive Order on outbound investment circulate, institutional investors are taking notice. Some advisors are already recommending that venture capital and private equity firms conduct “national security audits” of their portfolio companies. Details inside.
A national security screening mechanism for outbound investments was conspicuously absent from the $280 billion semiconductor bill passed by Congress last week. But the bill did include several outbound “guardrails,” and experts say the doors to an “outbound CFIUS” are still wide open.
A bipartisan group of Congressional leaders is working on a compromise that would create a new screening regime to review outbound investments in China and other adversarial nations. Experts have called the proposed regime “onerous.” A review and the latest updates are inside.