Christian Davis Quoted by Foreign Investment Watch on Outbound Investment Review

For its article “Companies, investors unconcerned about outbound regime…so far,” Foreign Investment Watch quoted Akin Gump international trade partner Christian Davis.

The article discusses the U.S. government’s consideration of creating a process for reviewing outbound investments for national-security risk. Last month, Foreign Investment Watch conducted a survey to gauge reader expectations regarding the efforts. According the article, only 56.3% of U.S. institutional investors or companies were aware of the U.S. government’s efforts. Davis says, “given that public hearings on this topic have been limited and the scope of the potential rules is in flux it is not entirely surprising that many are still learning about this policy initiative.” He adds that Akin Gump clients have been following these developments for a year or more.

According to the article, survey results show that 43.8% of respondents said they would not be impacted by an outbound investment review regime. “The initial legislative proposal was very broad and would have captured many transactions across a variety of sectors,” says Davis. He adds, “the number of investors affected may be relatively limited. But even if that’s the case outbound investment screening could still ‘force a significant change in strategy or structure for those firms.”

A majority (46.7%) of respondents said they have not conducted a national-security audit of investments in overseas companies, writes Foreign Investment Watch.

Davis, whose practice includes representation of clients before CFIUS, said, “some clients are conducting a risk assessment across their portfolio to assess the potential implications of an outbound investment regime,” he adds, “however, since the scope, timeline and operation of the rules has not been finalized, many companies are taking a wait-and-see approach.”