Cadwalader attorneys analyzed the national security implications of corporate deals involving foreign investors under the Foreign Investment Risk Review Modernization Act of 2018 ("FIRRMA").
FIRRMA expanded the types of transactions subject to national security review by the Committee on Foreign Investment in the United States ("CFIUS"). Cadwalader attorneys outlined how the CFIUS review criteria and processes have changed. These changes include:
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the broadening of CFIUS's authority to review a wide range of foreign investments that do not result in foreign control if the U.S. business at issue is involved in critical infrastructure, critical technology or the personal information of U.S. citizens;
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modification of the historically voluntary CFIUS process with a mandatory filing requirement; and
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a mandatory declaration process consisting of a 45-day period for CFIUS review of the declaration, a 45-day investigation period that can be extended by CFIUS for an additional 15 days if necessary, and 15 days for review and determination by the President of the United States.
According to the Cadwalader attorneys, deal lawyers in this space should:
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know whether the U.S. business implicates a FIRRMA-designated category;
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negotiate potential mitigation steps in advance; and
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consider a hedging strategy.
This memorandum was authored by Joseph Moreno, Jodi Avergun, Andrew Alin, Joshua Apfelroth and Keith Gerver.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.