CFIUS

For the first time, the U.S. Department of the Treasury publicly named a company subject to a penalty. This is coupled with an increase in the number of companies under the enforcement microscope, and the rise in penalty amounts.

• Rational behind publicizing T-Mobile’s name as being hit with enforcement action
• Status report on number of enforcement actions, types of enforcement and trends
• Is the enforcement over the last year acting as a deterrent, having the desired effect, or are adjustment forthcoming
• How are penalties calculated
• How are non-notified transactions being identified
• What changes are expected in the Treasury department, either from staffing or

This session will analyze the current and anticipated impact of a new Administration, as well as the enduring aftermath of the CFIUS Annual Report to Congress. Topics will include trends and new, evolving expectations:

• Breakdown of trends and their hidden lessons
• How has the change been implemented
• Examining the increase in non-notified transactions and how much time has passed between the deal and the notice
• Are CFIUS reviews becoming a more “adversarial” process?

• What is it like to run a large transaction, all the stakeholders, what is useful and helpful regarding interactions
• How to break down silos
• Calculating how companies account for the costs of mitigation and to what extent the parties and CFIUS accounted for the cost
• Deciding whether or not to address the operations side when negotiating a mitigation agreement
• Meeting privacy obligations for personal information of U.S citizens
• Managing Cyber Security and Insider Threats at the operational level
• Implementing policy and process formation, and standard operating procedures for oversight, auditing and monitoring of both systems and teams

CFIUS continues to review the controversial deal between U.S. Steel and Japanese-owned Nippon Steel. This raises questions of CFIUS’ jurisdiction, and what is now considered a national security concern.

• Delineating what is and what is not covered under the scope of CFIUS and how the scope has evolved
• How CFIUS should and should not be used, and the evolution of CFIUS usage – Is the committee being used for political purposes?
• Exploring the national security concern versus the economic security concern and the U.S. Industrial Base
• Determining the effect on allied countries

This session will examine priorities for the Select Committee on the China Communist Party, including the incoming presidential leadership as well as Bills before and passed by Congress.

• The spirit and implementation of the Protecting American Agriculture from Foreign Adversaries Act (2024) and the intersection with CFIUS
• What is the committee doing now? How is the role changing under the new administration?
• Examining the geopolitical landscape

This session will delve into why and how transactions are becoming more complex, and how to best determine whether a CFIUS filing is necessary. What are the risks of not filing?

• Deciphering the risk factors involved with not filing
• Determining whether a full filing is mandatory
• Analysing whether to do a declaration or a notice
• Calculating whether a voluntary filing will be more cost effective in the long run
• Anticipating which transactions that don’t seem sensitive, including sectors and jurisdictions
• How to proactively structure a deal so as not to trigger a filing
• Considerations for the buyer or the seller, and who should care more
• What matters to the foreign investor

This session will focus on safeguarding the infrastructure aspects as laid out in the June 2024 Executive Order, including critical infrastructure, manufacturing, and processing capacity and the availability of critical goods, materials, and services.

• Accessing the vulnerability of US ports, cranes
• Assessing the vulnerability of infrastructure touching the gird, such as nuclear power, oil and gas works, solar power, wind farms, batteries and other renewable tech
• Keeping appraised of how our critical material supply chain is impacted by national security considerations
• Assessing the dominating infrastructure projects to protect
• How is government thinking about critical minerals

The U.S. Department of the Treasury (Treasury) issued final regulations (the Final Rule) implementing Executive Order 14105, in October 2024, “Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern,” issued by President Biden on August 9, 2023 (the Outbound Order). The Final Rule provides the operative regulations and explanatory discussion regarding their intent and application. The regulations go into effect on January 2, 2025.

• Examining how the Outbound Investment Program is working in real life
• Identifying the scope of the OIP and how it is different from the Executive Order
• How will US persons outside of the US be treated, who are working for non-US companies. How does it apply to people?
• What policies and procedures can companies put in place
• How are the cases being reviewed
• Investing in prohibited area, AI, quantum
• Raising or borrowing capital when you want to do overseas investments
• What is the guidance, qualifications and criteria

This session will provide one-year review of the February 2024 Executive Order, Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern. As well, this session will look at the Executive Order 13873, Securing the Information and Communications Technology and Services Supply Chain.

• Defining Personal Sensitive Data under the EO and how the definition may evolve in practice
• Restricting data transactions, including vendor agreements (including agreements for technology services and cloud-service agreements; employment agreements; and investment agreements
• Restricting access by “countries of concern” to Americans’ bulk sensitive personal data
• Balancing the security of U.S.-based data centers with the expense of staying local

This session will explore what constitutes “national security” from global perspectives, and how these definitions are enforced in different countries.

• Examining the definition of national security
• Challenges with doing the analysis and coming up with a result

CANADA: Investment Canada Act (2024)

• Foreign investments in the critical minerals sector as a national security concern
• Determining whether an investment is of “net benefit”, such as the effect on economics

FRANCE: Strategic sectors covered by the foreign investment control

• Agricultural products as far as they contribute to national food security objectives
• Editing, printing, distribution of political and general information through print and online press services

GERMANY: Foreign Trade and Payments Act

• Safeguarding economic sectors and critical infrastructure
• Mandatory filing obligations for voting rights threshold

EUROPEAN COMMISSION: Open Strategic Autonomy

• Trade outside the EU as an exclusive responsibility of the EU and not it’s member countries
• Open Strategic Autonomy it builds on the EU’s openness to contribute to the economic recovery

NETHERLANDS: National Security Screening Act (2023)

• Defining national security, including niche markets such as semiconductors, quantum technology, and photonics, whose global supply chains

This session will focus on safeguarding against digital risks as laid out in the June 2024 Executive Order, including cybersecurity.

• Examining the national security concerns with emerging tech
• What is in the draft regulations and how is the national security risk changing; How will this sector be regulated
• How is CFIUS thinking about this sector including the definition of “foundational technology”
• How do you confirm when a tech can be used for dual-use tech? What are the restrictions. What you cannot buy
• Identifying what is ITCS and why is CFIUS involved?
• Recent developments in Lebanon with the pagers
• When you do and don’t need to file

• Developing your mitigation negotiation strategy early in the transaction process
• Calculating when to involve third-party monitors and choosing the right service provider
• Determining what is considered “limited risk”
• Structuring a deal when there is urgency and what to do if the transaction closes before the CFIUS review
• Working within the CFIUS system while continuing to do business
• Mitigating lower-probability risk agreements
• Mitigating hypothetical future scenarios at the beginning of the agreement – anticipating CFIUS’s long-term risk considerations
• Drafting an agreement for your client amid template terms and the highest-risk possibilities

This session will look at investment fund structures, including what does and doesn’t fall under the Code of Federal Regulations (CFR) Section 800-307 – Specific clarification for investment funds.

• The role and responsibility of the PE Manager, and when to notify of foreign investments
• Structuring your investment fund
• Determining what is and is not considered a covered investment
• When a fund structure investment is at risk of becoming the subject of heightened scrutiny
• Calculating your risk and potential exposure-and the bigger picture impact on the transaction

This session will look at the U.S. Department of the Treasury’s Notice of Proposed Rule Making to Expand CFIUS Coverage of Real Estate Transactions Near Military Installations, issued July 2024. This proposed rule would add over 50 military installations, across 30 states, to CFIUS existing jurisdiction.

This section will also look at the presidential order prohibiting the purchase of certain real estate operating as a cryptocurrency mining facility located within one mile of Francis E. Warren Air Force Base (F.E. Warren AFB), as well as the removal of equipment owned by MineOne Partners Limited.

Ralls Corp. v. Comm. on Foreign Inv. in the United States (2014)
A review of the only litigation case in the CFIUS sector.

TikTok
This session will give an update on the litigation involving TikTok, and parent company ByteDance, as well as a look at the Protecting Americans from Foreign Adversary Controlled Applications Act (2024) passed by Congress.

Chevron Decision
Coupled with the Chevron Decision being overturned, will this result in more litigation action.

• Examining due process rights
• Debating whether there is a cause for litigation when CFIUS is acting beyond its scope
• Analyzing what recourse a purchasing company has against the seller, when facing a CFIUS penalty
• Predicting the consequences of suing the government, and consequences of airing the areas of the deal

This session will delve into the Export Control Reform Act of 2018 (ECRA) and the EAR99 for low-technology consumer goods, and its interplay with FIRRMA and how presidential authority to regulate and enforce export controls is now being implemented.

• Classifying technology under EAR99, when you need a licence and where the tech can be exported to
• Determining when BUS will make a unilateral technology classifications, and which agencies will get involved
• Practical impact of expanding the mandatory declaration process
• Unpacking the evolving interplay of export controls and foreign investment reviews
• Evaluating whether or not your company has critical technology
• Discussing how presidential authority is being coordinated with the Secretaries of Commerce
• Defense, Energy and State to identify “emerging and foundational technologies” that are essential to national security, but are not deemed “critical technologies” subject to CFIUS review
• Emerging implications for exporters operating in sectors that are identified as involving foundational or emerging technologies