July 17, 2023
Foreign Investment Watch
If passed, recently proposed bipartisan legislation known as the “Protecting U.S. Farmland and Sensitive Sites From Foreign Adversaries Act” would have a significant impact on CFIUS decision making and jurisdiction.
Among other key provisions, the bill would establish a “presumption of non-resolvability” by CFIUS that “raises the approval threshold for CFIUS transactions by a foreign adversary entity purchasing near sensitive sites,” such as major military sites and intelligence facilities. According to a release from the office of Representative Mike Gallagher, one of the bill’s proposers, this means that CFIUS would “be required to review these transactions with the presumption that the national security concerns cannot be resolved.”
In a new article for Foreign Investment Watch, National Security/CFIUS/Compliance Practice Group Chair, Chris Griner, says the non-resolvability presumption would “stand the [CFIUS] process on its head. Effectively, it would begin at the end and put the petitioners in the position of proving a negative,” and under those circumstances, its “hard to imagine a target investor going forward with a transaction where disapproval is all but guaranteed.”
Chris notes that concerns regarding foreign land purchases near sensitive government facilities may indeed be merited and says that the U.S. government would start down a “proverbial slippery slope when the deliberative process is short-circuited by statutory presumptions of ‘non-resolvability’.” Once the precedent is set for statutory presumptions of non-resolvability, he says, “there may be great temptation to expand the number of ‘non-resolvable’ transactions — with unintended consequences yet to be understood.”
Read the full article here. (Subscription Required)
July 17, 2023
Foreign Investment Watch
If passed, recently proposed bipartisan legislation known as the “Protecting U.S. Farmland and Sensitive Sites From Foreign Adversaries Act” would have a significant impact on CFIUS decision making and jurisdiction.
Among other key provisions, the bill would establish a “presumption of non-resolvability” by CFIUS that “raises the approval threshold for CFIUS transactions by a foreign adversary entity purchasing near sensitive sites,” such as major military sites and intelligence facilities. According to a release from the office of Representative Mike Gallagher, one of the bill’s proposers, this means that CFIUS would “be required to review these transactions with the presumption that the national security concerns cannot be resolved.”
In a new article for Foreign Investment Watch, National Security/CFIUS/Compliance Practice Group Chair, Chris Griner, says the non-resolvability presumption would “stand the [CFIUS] process on its head. Effectively, it would begin at the end and put the petitioners in the position of proving a negative,” and under those circumstances, its “hard to imagine a target investor going forward with a transaction where disapproval is all but guaranteed.”
Chris notes that concerns regarding foreign land purchases near sensitive government facilities may indeed be merited and says that the U.S. government would start down a “proverbial slippery slope when the deliberative process is short-circuited by statutory presumptions of ‘non-resolvability’.” Once the precedent is set for statutory presumptions of non-resolvability, he says, “there may be great temptation to expand the number of ‘non-resolvable’ transactions — with unintended consequences yet to be understood.”
Read the full article here. (Subscription Required)
