Hedge Funds Nuts & Bolts: National Security Reviews of Foreign Investment in the United States

The Foreign Investment Risk Review Modernization Act (FIRRMA), which became law a few weeks ago, significantly expands the jurisdiction and authority of the Committee on Foreign Investment in the United States (CFIUS). CFIUS is a multi-agency committee responsible for reviewing foreign acquisitions of controlling interests in US businesses.  As a result of FIRRMA, in addition to mergers, acquisitions and takeovers that confer controlling interest, CFIUS now has authority to review:

• Non-controlling investments if the US target is involved in critical infrastructure or critical technologies or maintains sensitive personal data of US citizens
• Changes in non-US investors’ governance rights
• Transactions involving real estate in close proximity to sensitive US government facilities, and
• Transactions structured to evade CFIUS jurisdiction

FIRRMA also brings procedural changes, including longer periods for review and (as necessary) investigation of covered transactions, as well as situations in which (for the first time) transaction parties will be required to submit notifications to CFIUS.

In this month's webinar, partner Jeremy Zucker analyzes the new considerations applicable to investors, sellers and targets, both foreign and domestic, in light of FIRRMA and the Trump Administration’s current approach to foreign investment.