The Economist Quotes Christian Davis on Upcoming Changes to CFIUS

Christian Davis, an international trade partner at Akin Gump, has been quoted by The Economist in “Silicon Valley gets queasy about Chinese money.” The article reports that some startups are feeling pressure because of scrutiny they are under for having accepted Chinese venture capital money.

In coming days, the article notes, President Trump is expected to sign the Foreign Investment Risk Review Modernization Act (FIRRMA), which will allow for more rigorous reviews of foreign investments into U.S. companies, including startups, on national-security grounds. It’s a move that could have big consequences for Silicon Valley.

Passage of FIRRMA, according to the article, will give CFIUS new discretion to review property transactions, minority investments in companies that supply “critical technology” and firms that hold “sensitive personal” data on U.S. consumers. Since no review will be triggered by passive investments in companies that do not come with board seats or access to material, non-public information, many investments in startups will not be scrutinized. According to Davis, though, that could change. He said it is likely the United States will continue to identify and add new sensitive technologies to its list over time.