Laura Black Quoted by GCR on Proposed State Level Foreign Investment Screening

Akin Gump international trade senior counsel Laura Black was quoted by Global Competition Review (GCR) for its article “CFIUS concludes no jurisdiction over controversial land acquisition.” The article looks at a recent decision by the Committee on Foreign Investment in the United States (CFIUS) and a South Dakota proposal to establish a state level CFIUS for purchases of agricultural land. GCR reports that the decision has generated controversy. 

Black, who served as the Director of Policy and International Relations, CFIUS Office of Investment Security, said that the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), for which she served as chief drafter of the implementing regulations, gave to CFIUS the authority to review real estate transactions near sensitive government facilities and to the President the power to block these transactions.

Commenting on a bill proposed by South Dakota’s governor that would create CFIUS-South Dakota, a board to investigate proposed purchases of agricultural land by foreign investors and recommend approval or denial, Black said that this would allow a state committee to recommend blocking acquisitions even after CFIUS has reviewed at the federal level. She noted, “We are talking about a state trying to override the executive branch in the area of national security.”

Black said that this proposed bill would discourage voluntarily filing with CFIUS if a state has the power to subsequently block the same deal. She added that, were multiple states to set up CFIUS-style bodies, review at the federal level makes sense to avoid uncertainty for business with assets in several states.

She noted, “Even if the bills purport to cover only Chinese investment, ownership structures and control rights are often quite complex, and states could reach different results regarding what constitutes a Chinese investment or a risk. States also wouldn’t have access to intelligence that CFIUS does.”