Mario Mancuso, left, and Luci Hague, right, of Kirkland & Ellis. Courtesy photos 'Reverse CFIUS' Moves Closer to Reality: Highlights for Investors, Companies From Outbound Investment Actions
The U.S. government sees what U.S. market participants consider ordinary course relationship-building with Chinese investors and companies as a significant vector of national security risk.
August 16, 2023 at 03:07 PM
7 minute read
Analysis
On Aug. 9, President Joe Biden issued the long-awaited executive order (EO) imposing outbound investment controls on certain types of investments by U.S. persons in China and Chinese-owned companies in the semiconductor, quantum computing and artificial intelligence sectors. The EO was released alongside an advance notice of proposed rulemaking (ANPRM) from the U.S. Department of the Treasury (Treasury), which outlines how the Treasury is considering implementing the EO's requirements, and poses 83 questions for public comment relating to the key concepts and definitions that will be refined in regulations.
Taken together, the EO and ANPRM highlight the U.S. government's focus on how U.S. capital flows, expertise, and networks can bolster the development and production of technologies by Chinese companies to the detriment of U.S. national security. Put simply, the U.S. government sees what U.S. market participants consider ordinary course relationship-building with Chinese investors and companies as a significant vector of national security risk.
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