In an era marked by global unrest, regulatory complexities, and a shifting market landscape, companies must remain diligent in their trade compliance procedures and stay apprised of changes in the law.
TC Trade Alerts will serve as a central resource for identifying the policy changes, executive orders, and necessary information and context regarding government actions affecting international trade.
See below for more information on the last TC Trade Alerts. If you have any questions about how this affects your business, please don't hesitate to contact one of our attorneys.
Additional Resources
Trade Compliance Handbook | Checklists of Foreign Countries Subject to Sanctions | Our International Trade Practice
| THOMPSON COBURN TRADE ALERT | |
| HEADLINE | Trump Administration directs the Committee on Foreign Investment in the United States ("CFIUS") to restrict Chinese and other foreign investments to bolster national security |
| DATE | 21 February 2025 |
| AGENCY | Presidential Action Directing Multiple Agencies |
| EFFECTIVE DATE | 21 February 2025 |
| BACKGROUND | The United States has several policy instruments, including the Committee on Foreign Investment in the United States (CFIUS) to limit foreign investment in domestic companies. The Memorandum aims to preserve and encourage an open investment environment among specified "partners" while expanding on the scope of industries reviewed by CFIUS with respect to Chinese investment to include health care, agriculture, energy, raw materials, and "other strategic sectors" in addition to critical infrastructure and critical technologies currently reviewed by CFIUS. The Memorandum also proposes new "fast-track" provisions and to restructure the CFIUS mitigation procedures and enhance outbound investment reviews. |
| DETAILS | The Memorandum pledges to: " Create a "fast-track" process to facilitate greater investment from specified allied and partner sources in United States businesses, allowing for increased foreign investment subject to security provisions, including requiring approved foreign investors to avoid partnering with foreign adversaries of the United States (i.e., China, Cuba, Iran, North Korea, Russia, and Venezuela under Nicolás Maduro's regime). " Encourage passive investments from foreign persons, such as non-controlling stakes and shares with no voting, board, or other governance rights and that do not confer any managerial influence, substantive decision-making, or non-public access to technologies or technical information, products, or services. " Reduce the exploitation of public and private sector capital, technology, and technical knowledge by foreign adversaries such as China by using all legal instruments, including CFIUS, to restrict Chinese-affiliated persons from investing in American technology, critical infrastructure, health care, agriculture, energy, raw materials, or other strategic sectors. " Use all necessary legal instruments to deter Americans from investing in the Chinese military-industrial sector through the imposition of sanctions under IEEPA, blocking assets, or through other actions. The Administration plans to review: " E.O. 14105 to examine whether it includes sufficient controls to address national security issues. " The possibility of enforcing new or expanded restrictions on American outbound investment in certain Chinese sectors including semiconductors, artificial intelligence, quantum, biotechnology, hypersonics, aerospace, advanced manufacturing, directed energy, and other areas implicated by the Chinese military. " Whether to suspend or terminate the 1984 United States-The People's Republic of China Income Tax Convention. " Whether adequate financial auditing standards are upheld for companies covered by the Holding Foreign Companies Accountable Act. " The variable interest entity and subsidiary structures used by foreign-adversary companies to trade on United States exchanges. Various government agencies, including Treasury, State, Defense, and others, will implement the policy through regulatory measures, including CFIUS actions. The EPA will handle environmental review processes related to investments. Treasury, the SEC, and the FBI will assess risks associated with foreign adversary companies listed on U.S. exchanges, ensuring compliance with auditing and oversight standards. |
| BASIS | IEEPA, section 721 of the Defense Production Act of 1950, as amended; Holding Foreign Companies Accountable Act |
| CITE | America First Investment Policy – The White House |
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.
