Article written by Sarah Wong of Asian Legal Business. Republished with consent of journalist.
As the United States and China remain locked in a trade standoff, U.S. President Joe Biden has ushered in a fresh set of criteria on foreign investment review on the grounds of national security in a thinly veiled attempt to stymie China's access to core U.S. technology, critical infrastructure, and sensitive data. Lawyers urge investors to come prepared for heightened regulatory scrutiny and steeper challenges ahead.
Ambitions of geopolitical influence and a race for technological supremacy have pitted the United States against China for some time now, but China's burgeoning economic and military clout has only intensified this competition with the world's top economy in recent years.
The White House under the Biden administration has continued with past U.S. administrations' hawkish stance against Beijing by viewing everything, from academic and cultural exchange to capital and data flows, through the lens of national security. With China's paramount leader Xi Jinping emphasizing the need for domestic technological capabilities, Chinese strategic investment in perceived "high-risk" areas is keeping policymakers in Washington up at night.
With a watchful eye on "competitors" and "adversarial nations," U.S. President Joe Biden in September issued an executive order underscoring the "critical role" of the committee on Foreign Investment in the United States, or CFIUS.
Established in 1975, the interagency committee has been authorized to evaluate certain transactions involving foreign investment to determine whether such transactions put America's national security in peril and if blockage or fencing in of the deal should follow. "CFIUS maintains fairly broad jurisdiction to review foreign acquisitions of U.S. businesses. It also has jurisdiction over controlling as well as certain types of non-controlling investments in the U.S.," says Daanish Hamid, a partner and CFIUS specialist at Rimon Law.
Read the full article here: CFIUS - Upping the Ante
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