Corporate Counsel Quotes Christian Davis on New CFIUS Foreign Investment Rules

Akin Gump international trade partner Christian Davis was quoted by Corporate Counsel in the article “New CFIUS Foreign Investment Rules Prompt Counsel to Scramble.” The article reports on the impact on corporate legal departments of new rules, announced as part of a pilot program, subjecting overseas investors in U.S. businesses to national security reviews.

According to the article, the new rules require any U.S. business that has a hand in “critical technology” and takes certain types of foreign investments to provide details of the transaction to CFIUS. The mandatory declaration provision applies to deals that put investors in decision-making roles at a company, and the new rules cover many industries, including aircraft manufacturing, aluminum production, battery makers, communications equipment, defense-related items, biotech and nanotech.

“It’s a huge sector,” said Davis. “The pilot program was kind of an idea that could be imposed and was in the [FIRRMA] statute but not given a timeline. Most people thought they had more time to get ready for this.”

Davis has been advising clients who aren’t sure whether they’re going to be affected to look much more closely at their investment portfolios and really get to know their investors. He notes that they should make sure, for example, that their investors have not violated U.S. sanctions or export controls.