US-bound investment will get more difficult for China

2018 ◽  
Keyword(s):  
United States ◽  
Foreign Investment ◽  
The United States ◽  
Investment Risk ◽  
Content Type ◽  
Chinese Investment ◽  
Advanced Technologies ◽  
Greenfield Investments ◽  
Risk Review ◽  
Trump Administration

Subject Chinese investment in the United States. Significance The Foreign Investment Risk Review Modernization Act (FIRRMA) enacted on August 13 expands the remit of the Committee on Foreign Investment in the United States (CFIUS), which reviews incoming foreign investment deals for possible national security implications. China is the implicit target. Since its peak of 46 billion dollars in 2016, Chinese direct investment in the United States has steadily declined, falling to 29 billion dollars in 2017 and dropping another 90% year-on-year in the first half of 2018. Impacts Uncertainty regarding new US regulations will hold some Chinese investors back from entering the market. Chinese businesses will face greater pressure from US policymakers and regulators to clarify their relationship with the Communist Party. Chinese investments in ICT, semiconductors and other advanced technologies will come under sustained scrutiny from US regulators. Chinese greenfield investments might increase as investors seek ways around tariffs and the Trump administration seeks to create jobs.

CFIUS issues final regulations on national security review of foreign investments in the United States under FIRRMA: broader reach, mandatory filings, and limited exceptions

2020 ◽  
Vol 21 (2/3) ◽  
pp. 143-149
Author(s):  
Sonali Dohale ◽  
Kara M. Bombach ◽  
Cyril T. Brennan ◽  
Renée A. Latour ◽  
Axel S. Urie
Keyword(s):  
United States ◽  
Foreign Investment ◽  
The United States ◽  
Investment Risk ◽  
Due Diligence ◽  
Content Type ◽  
Foreign Acquisition ◽  
Potential Applicability ◽  
Risk Review ◽  
Practical Implications

Purpose The article examines the sweeping changes to the review process undertaken by Committee on Foreign Investment in the United States (CFIUS) as a result of the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA). The Article specifically reviews the long-awaited final sets of regulations, effective as of February 13, 2020, and analyzes their impact on the CFIUS process, as well as considers the implications of FIRRMA for parties to foreign acquisition, control, and investment transactions. Design/methodology/approach The Article begins with an overview of the CFIUS framework and a general explanation of FIRRMA. It then moves to an analysis of FIRRMA and the resulting changes to the prior CFIUS regime. The Article concludes with general considerations and provides recommendations for parties who may find themselves analyzing the potential applicability of CFIUS to foreign acquisition and investment transactions. Findings FIRRMA resulted in significant changes to the existing CFIUS regulatory framework. Practical implications Parties should learn the CFIUS changes as a result of FIRRMA, including the new mandatory filing requirements as well as implications for non-controlling investment transactions. Parties should include CFIUS analysis and planning in the earliest stages of deal planning and due diligence. Originality/value The article provides an in-depth review of the changes to CFIUS resulting from FIRRMA. The changes to the existing CFIUS landscape have resulted in new mandatory filing requirements and expanded jurisdiction over non-controlling investment and real estate transactions, which are discussed in the article.

US government’s investment intervention will grow

2018 ◽  
Keyword(s):  
United States ◽  
Intellectual Property ◽  
Foreign Investment ◽  
The United States ◽  
Foreign Firms ◽  
Donald Trump ◽  
Foreign Investments ◽  
Content Type ◽  
The Us ◽  
Trump Administration

Subject Government intervention in foreign inward and outward investments and mergers. Significance The Trump administration is increasingly moving to control undesired foreign investments, as the March 12 presidential order blocking overseas-based Broadcom from merging with US-based Qualcomm showed. President Donald Trump was working on advice from the Committee on Foreign Investment in the United States (CFIUS). Since 1990, there have been only five cases where presidents have blocked mergers; two of these have been under Trump since his inauguration in January 2017. Impacts Foreign firms will face constraints on accessing US intellectual property and tech patents. Trump will impose new visa requirements for Chinese nationals working and studying in the United States. US vetoes of foreign investment and mergers could see other countries respond in the same way. The Broadcom-Qualcomm veto should help the US semiconductors industry maintain a global role in 5G technology. Foreign firms may sidestep the CFIUS by incorporating in the United States, as Broadcom hopes to do next month.

US investment controls will survive Trump

2020 ◽  
Keyword(s):  
United States ◽  
National Security ◽  
Foreign Investment ◽  
The United States ◽  
Economic Order ◽  
Mitigation Measures ◽  
Content Type ◽  
Roll Back ◽  
Trump Administration

Significance The Trump administration has expanded powers to review inbound investments on national security grounds, in its campaign to deny China access to critical US technologies. The Committee on Foreign Investment in the United States (CFIUS) is playing a key role, as the administration seeks technological decoupling from China. Impacts CFIUS’s activity will evolve as the administration’s concepts of national security and global economic order shift. Corporations must be proactive ahead of transactions, to consider potential CFIUS implications. The United States will have to offset the loss of foreign investment with domestic R&D spending. A Biden administration would not roll back CFIUS but could redefine ‘national security’ and mitigation measures.

Governance implications of CFIUS reform for US investment funds with foreign investors

2019 ◽  
Vol 20 (1) ◽  
pp. 36-39
Author(s):  
Michael Leiter ◽  
John Caccia ◽  
Heather Cruz ◽  
Michael Hoffman ◽  
James Schnell ◽  
...  
Keyword(s):  
National Security ◽  
Foreign Investment ◽  
Design Methodology ◽  
The United States ◽  
Investment Risk ◽  
Investment Funds ◽  
Foreign Investors ◽  
Content Type ◽  
Practical Guidance ◽  
Risk Review

Purpose To explain how corporate governance is likely to be affected by drastic changes to national security reviews by the Committee on Foreign Investment in the United States (CFIUS), especially for US funds with foreign investors. Design/methodology/approach The article summarizes the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) and then details the pilot program and how to qualify for exceptions. Findings While many questions and considerations remain, including how FIRRMA will play out across various industries, we concluded that there will be an increase in CFIUS filings. Originality/value Practical guidance from experienced national security and CFIUS lawyers.

Nicaragua election criticism will not shake Ortega

2021 ◽  
Keyword(s):  
United States ◽  
Foreign Investment ◽  
Bilateral Trade ◽  
The United States ◽  
Economic Hardship ◽  
Political Repression ◽  
Content Type ◽  
Run Up ◽  
Increased Pressure

Significance The outcome comes as little surprise, given the repressive tactics used by the Ortega administration in the run-up to the vote, which included the disqualification or imprisonment of numerous opposition candidates. The United States and other international actors are now poised to put increased pressure on the re-elected government. Impacts The prospect of extended sanctions will act as a further disincentive to foreign investment. Ortega’s efforts to boost regional support through increased alignment with Honduras may lead to greater bilateral trade. More undocumented Nicaraguan migration looks inevitable, whether due to continuing political repression or worsening economic hardship.

Trump may destabilise Korean Peninsula

2017 ◽  
Keyword(s):  
United States ◽  
South Korea ◽  
Korean Peninsula ◽  
Presidential Elections ◽  
The United States ◽  
Content Type ◽  
The Us ◽  
North And South ◽  
Trump Administration

Subject US relations with North and South Korea under the incoming Trump administration. Significance The period of transition to Donald Trump's presidency in the United States has displayed neglect and misunderstanding of Korean peninsula affairs, adding to risks for the region as it approaches a period of significant strategic challenge. Impacts Until Trump's team enunciates policy on the Koreas, responses to events will be unprepared and reactive. Trump's policy will influence presidential elections in South Korea, where left-of-centre candidates question the value of the US alliance. The Trump administration’s policy and communication via Twitter heightens risk of misunderstanding within the region.

Iran gas can diversify European supplies in long term

2015 ◽  
Keyword(s):  
United States ◽  
Foreign Investment ◽  
The United States ◽  
Gas Production ◽  
Gas Industry ◽  
Content Type ◽  
The Third ◽  
Un Security Council ◽  
To Come

Significance The deal reached between Iran and the P5+1 negotiating group (UN Security Council permanent members plus Germany) on July 14 promises to end most sanctions on the country, in return for suspension and monitoring of its nuclear programme. If ratified by all parties, it will create opportunities for an expansion of Iran's gas production and exports. Iran is the holder of the world's largest gas reserves, according to BP estimates. It is also the third-largest producer (after the United States and Russia, and probably having overtaken Qatar during 2015), and the fourth-largest consumer. Impacts Iran could increase gas exports by advancing projects stalled by sanctions, although most of these will take some years to come to fruition. Iran would seek to attract foreign investment into its gas industry to increase production and exports in the longer term. If this occurs, Iran will compete with other gas exporters, particularly Russia, into the 2020s.

US firms will feel pressure in China, trade war or not

2018 ◽  
Keyword(s):  
United States ◽  
Integrated Circuits ◽  
The United States ◽  
Xi Jinping ◽  
Donald Trump ◽  
Trade Surplus ◽  
Content Type ◽  
China Trade ◽  
Trade War ◽  
Trump Administration

Subject China's options for retaliating against US firms during trade tensions. Significance US President Donald Trump tweeted yesterday that he is working with China's President Xi Jinping to get China's telecoms giant, ZTE, "back in business, fast" -- even though it was penal US sanctions that forced the company to announce last week that it was stopping operations. The Trump administration is divided on whether its objective in threatening imports tariffs on Chinese goods worth 50 billion dollars, effective May 22, is to strike a deal to cut China's trade surplus with the United States or to change China's industrial practices. Impacts Compliance costs will rise even if trade tensions subside. Investors in industries that China sees as strategic (eg, semiconductors and integrated circuits) may face unwritten screening rules. Investors in automobile, aircraft and shipping manufacturing and finance may find new opportunities to enter the market.

Thailand deepens China links as hedge against US ties

2017 ◽  
Keyword(s):  
United States ◽  
East Asia ◽  
High Speed ◽  
The United States ◽  
South East Asia ◽  
High Speed Railway ◽  
Content Type ◽  
The Us ◽  
Strategic Imperative ◽  
Trump Administration

Subject Outlook for Thai-US-China relations. Significance Chatchai Thipsunaree, Thailand’s permanent secretary in the Ministry of Transport, confirmed on May 17 that construction of the long-awaited Thai-China high-speed railway will begin this year. The project reflects the growing momentum in Thailand’s relations with China, and refiguring of ties with the United States. Impacts Trump administration officials see less strategic imperative in the US-Thailand alliance than previous administrations. China’s growing presence in South-east Asia, particularly on the Mekong, will trigger resistance from affected populations in Thailand. Thai officials will allow Chinese infrastructure projects to proceed despite local protests.

Growing US Republican Taiwan focus may provoke Beijing

2019 ◽  
Keyword(s):  
United States ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
The United States ◽  
Content Type ◽  
Trump Administration

Significance Separately, five Republican senators, led by Florida's Marco Rubio, wrote to House Speaker Nancy Pelosi on February 7, requesting she invite Taiwan's President Tsai Ing-wen to address a joint Congress session. Impacts The proposed US-Taiwan free trade agreement is presently unlikely to advance. The Trump administration might be more willing than others to defend Taiwan, but relations with China will take priorty. Taiwan is exporting its political divisions to the United States; the main opposition Kuomintang will open a Washington office this year.

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