A bipartisan group of co-sponsors in both the House and the Senate recently introduced the Foreign Investment Risk Review Modernization Act (“FIRRMA”).  These substantively identical bills demonstrate that Congress is now considering increasing the scrutiny of foreign investment in the U.S., particularly from China.

The Committee on Foreign Investment in the United States (“CFIUS”) is the interagency body is responsible for reviewing incoming foreign investments for national security risks, so long as they are “covered transactions.”  FIRRMA would broaden the scope of “covered transactions” to include, among other things: the purchase or lease by a foreign person of real estate located near U.S. military or national security interests; non-passive investments in critical technologies or critical infrastructure; and the contribution of U.S. critical technology to a foreign person, including through joint ventures, among others.  The bills would also update certain terms and definitions, including “critical technology,” which can include emerging technologies that are not necessarily controlled for export.  Notably, FIRRMA would not extend CFIUS jurisdiction to “greenfield” investments, which the regulations carve out from CFIUS review. 
Continue Reading Congress Proposes Increased Scrutiny on Foreign Investments in the U.S.

Senate Minority Leader Charles Schumer wants President Trump to take a stand against China for its kids-gloves response to North Korea’s nuclear missile activity by using the Committee on Foreign Investment in the United States (CFIUS) to deny all pending requests involving Chinese acquisition of U.S. companies.  President Trump has been critical of China for not using leverage within its means to pressure North Korea, and Schumer’s request, which would block Chinese company efforts to establish control of U.S. companies presently being reviewed by the Committee, aims to drive Beijing to take stronger action by wielding its perceived influence over North Korea.
Continue Reading Schumer Urges Trump to Suspend All China-Related Mergers Pending Before CFIUS to Exact Tougher Approach on North Korea

The U.S. Department of Commerce’s Bureau of Economic Analysis has released the 2016 figures in their data series on foreign direct investment in U.S. Businesses. This series allows businesses, researchers, and policy makers to gain insights into recent trends in foreign investment. Investments and the employment generated, are broken down by country of origin, industry type, and location of businesses in which the investments were made.  The data are further broken down by whether the investment involves acquisition, establishment, or expansion of a business.
Continue Reading Manufacturing Sector Leads Foreign Direct Investment in U.S., According to New Commerce Report

Senior members of the Senate Finance, Banking, and Homeland Security Committees recently requested a Government Accounting Office (GAO) investigation of how the Committee on Foreign Investment in the U.S. (CFIUS) examines U.S. real estate transactions involving foreign investors.

This follows two recent proposed real estate transactions involving the Chinese company Anbang that did not close.