Suirui International Ordered To Divest From Jupiter Systems

Highlights

• President Donald Trump on July 8, 2025, issued a presidential order retroactively prohibiting the February 2020 acquisition of Jupiter Systems LLC, a Delaware limited liability company, by Hong Kong-based Suirui International Co. Ltd.
• The order requires that Suirui International divest all interests and rights in Jupiter and prohibits Jupiter from holding any interests or rights in any assets or operations of Jupiter's Asian subsidiaries acquired or formed after the acquisition.
• The divestment will be overseen by the Committee on Foreign Investment in the United States (CFIUS) and considered finalized once the Committee has verified and communicated its completion to the parties in writing.

President Donald Trump issued a presidential order (the Order) on July 8, 2025, retroactively prohibiting the acquisition of Jupiter Systems LLC, a Delaware limited liability company, by Suirui International Co. Ltd., a Hong Kong-based company. Suirui International and its parent company, Suirui Group Co. Ltd. (together, Suirui), were ordered to divest all interests and rights in Jupiter and Jupiter's tangible and intangible assets or property. Suirui International and Jupiter were further ordered to ensure that Jupiter holds no interests or rights in any assets or operations of Jupiter Asian subsidiaries acquired or formed after the acquisition. The divestment will be overseen and verified by the Committee on Foreign Investment in the United States (CFIUS).

Background on the Acquisition

Suirui International was incorporated on Jan. 22, 2020, in Hong Kong and is a majority-owned subsidiary of Suirui Group, a Chinese cloud communication service company. Jupiter operates in California as a manufacturer of visualization technology. On Feb. 28, 2020, Suirui International acquired all interests in Jupiter and its subsidiaries, Jupiter Systems China (Hong Kong) Ltd. and Jie Xian Tong Computer Systems (Shenzhen) Co. Ltd. The parties did not submit a voluntary notice of the transaction to CFIUS.

The Order indicated that there is credible evidence that through its acquisition of Jupiter, Suirui may take action that threatens to impair U.S. national security. Though the Order did not detail the specific national security risks at issue, it may be in response to a general concern that the acquisition of U.S. technology companies by Chinese firms could facilitate the transfer of U.S. technology to the Chinese government, which potentially poses risks to U.S. economic and national security. According to its website, Jupiter also appears to have several government agency customers critical to the national security sector, including the CIA, National Security Agency and NASA. This may have raised additional national security concerns due to its role as a government supplier that is wholly owned by a foreign entity domiciled in an adversarial country. Suirui also recently expanded investments into industrial surveillance and operational robotics technologies, which may raise additional risks to U.S. national security.

Key Requirements in the Order

To effectuate the prohibition of Suirui International's acquisition of Jupiter, the Order outlines divestment requirements and CFIUS' role in overseeing the divestment.

Divestment from Jupiter Systems

The Order requires that Suirui and its affiliates divest all interests and rights in Jupiter and its tangible or intangible assets or property within 120 calendar days of the order unless this deadline is extended by CFIUS. Tangible and intangible assets expressly include Jupiter's intellectual property, nonpublic source code associated with Jupiter products and customer contracts.

Suirui and Jupiter are required under the Order to implement measures and controls within seven calendar days of the order to ensure there is no unauthorized access to Jupiter's assets, systems, books, and records or facilities in the U.S. by Suirui or its affiliates or personnel. These measures and controls must remain in place until divestment is complete.

Suirui and Jupiter are also required to ensure that Jupiter holds no interests or rights in any assets or operations of Jupiter's Asian subsidiaries acquired or formed after the acquisition, unless otherwise approved by CFIUS. These assets are expressly excluded from Suirui's divestment requirement.

Suirui and Jupiter are prohibited from dissolving, reorganizing, transferring ownership of Jupiter or taking other action that would materially impede or prevent divestment. This includes the transfer of any tangible or intangible assets of Jupiter located in the U.S. to a location outside of the U.S. or to any of Jupiter's Asian subsidiaries.

Restrictions on Sale or Transfer to Third Parties

Under the Order, Suirui and its affiliates are prohibited from selling its interests and rights in Jupiter to any third party until CFIUS is notified in writing of the intended buyer or transferee. If after 30 calendar days from the date of notification CFIUS has not objected, the sale or transfer is permitted.

CFIUS may consider several factors when reviewing a proposed sale or transfer, including whether the proposed sale or transfer threatens to impair national security or undermines the purpose of the divestment Order. Other listed factors include whether the buyer or transferee 1) is a U.S. citizen or is owned by U.S. citizens, 2) has or has had a direct or indirect contractual, financial, familial, employment or other close and continuous relationship with Suirui, its affiliates, or its officers or employees, or 3) can demonstrate a willingness and ability to support compliance with this order and any conditions imposed by CFIUS.

Certifications to CFIUS

The Order outlines two certification requirements:

• Prior to the completion of the divestment, Suirui and Jupiter are required to certify to CFIUS on a weekly basis that they and their affiliates are in compliance with the Order and any conditions imposed by CFIUS. These certifications must include a description of divestment efforts and timeline for projected completion.
• Immediately upon divestment, Suirui and Jupiter are required to certify in writing to CFIUS that all steps necessary to fully and permanently effectuate the divestment requirements have been completed and that they and their affiliates have destroyed or transferred all intellectual property or nonpublic source code associated with Jupiter products in their possession or control.

CFIUS Verification Procedures

CFIUS is authorized to implement measures and impose conditions as it deems necessary and appropriate to verify and enforce the Order and to mitigate any risk to national security arising out of the underlying acquisition.

To that end, Suirui and Jupiter are required on reasonable notice to permit U.S. government employees designated by CFIUS access to all of their premises and facilities located in the U.S. The designated U.S. government employees will be permitted to:

• inspect and copy any books, ledgers, accounts, correspondences, memoranda and other records and documents in the possession or under the control of Suirui, Jupiter or their affiliates that concern any matter relating to this Order
• inspect or audit any information systems, networks, hardware, software, data, communications and property in the possession or under the control of Suirui, Jupiter or their affiliates that concern any matter relating to this Order
• interview officers, employees or agents of Suirui, Jupiter or their affiliates concerning any matter relating to this Order

CFIUS is required to conclude its verification procedures within 90 calendar days of Suirui's and Jupiter's certification that the divestment has been completed. The Order will not be treated as fully effectuated until CFIUS communicates to the parties in writing that divestment is complete.

Key Implications for Businesses

This Order aligns with the Trump Administration's "America First Investment Policy," which makes clear that the U.S. will stop China-affiliated entities from buying up critical American businesses and assets, allowing only those investments that serve American interests.

CFIUS employs a large team of investigators charged with finding unfiled covered transactions that the Committee is interested in reviewing under either its mandatory or voluntary jurisdiction ("non-notified" transactions). There is no statute of limitations on this enforcement team's ability to scrutinize non-notified covered transactions – even those, as here, that were consummated more than five years ago – and ultimately force a divestment. Only those covered transactions that are filed and cleared by CFIUS receive a safe harbor against a potential post-closing review.

These risks continue to be most acute for transactions involving foreign adversaries such as China. To avoid risks associated with future reviews (and potential divestment requirements), foreign investors should undertake careful CFIUS risk assessments and ensure that cross-border regulatory considerations are factored into the transaction process as early as possible.