Magnachip Semiconductor Corporation (“Magnachip”), a South Korea-based semiconductor company, recently disclosed that the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) threatened to recommend that President Biden exercise his authority to block a Chinese private equity firm’s acquisition of Magnachip due to unresolvable national security concerns.  Given Magnachip’s very limited nexus to the United States, this case demonstrates the willingness of CFIUS to stretch its jurisdictional arms, especially when it comes to transactions implicating sensitive sectors. Continue Reading CFIUS Threatens to Block Magnachip Deal; Shows Willingness to Interpret its Jurisdiction Broadly

The “Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region” was signed on November 27, 2020 and entered into force partially on the same day and partially on May 19, 2021.

Significantly, the Supplemental Arrangement modifies and expands the existing “Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region”, which entered into force on February 1, 2000.  The modifications simplify enforcement proceedings and enhance judicial support to parties subsequent to arbitration proceedings bridging Mainland China and the Hong Kong Special Administrative Region, including by providing for:

  • Simultaneous enforcement of arbitral awards in Hong Kong and Mainland China;
  • Extension of the scope of the Enforcement Arrangement to cover also the recognition of arbitral awards;
  • The ability for parties to arbitration proceedings with a seat in one of the two jurisdictions to apply to the courts of the other for interim measures after the rendering of an arbitral award;
  • Enforcement of all arbitral awards having a seat in Hong Kong in Mainland China and vice versa, regardless of the administering arbitration institution.

This Alert Memorandum analyzes and summarizes the most prominent elements of the Supplemental Arrangement which are likely to be of significance to practitioners and users of arbitration involving Mainland China and Hong Kong.

The Committee on Foreign Investment in the United States (CFIUS) recently released its 2020 annual report, which provides information and statistics regarding transactions reviewed by CFIUS in 2020.[1]  For the first time, the 2020 annual report also includes information regarding so-called non-notified transactions identified and reviewed by CFIUS. Continue Reading CFIUS Releases 2020 Annual Report

On 20 July 2021, the UK Government announced that the National Security and Investment Act 2021, which was passed on 29 April 2021, will come into force on 4 January 2022. This new regime for review of investments on national security grounds will be among the most wide-ranging in the world. It represents the most significant change in the UK regulatory environment since the Government ceded the power to approve or prohibit mergers on competition grounds to an independent agency in 2002.

Please click here to read the full alert memorandum.

While large financial institutions have traditionally been hesitant to enter new areas of financial products, particularly virtual assets, many more banks and companies have expressed interest in virtual currencies as cryptocurrency has become increasingly mainstream.  Given the use of such services by terrorist groups, it is important for banks and other financial institutions to consider evolving dynamics in this area.  On the one hand, one of the widely described benefits of virtual currency is the transparency and public nature of transactions since they are typically recorded in a publicly accessible blockchain, which could facilitate policing and enforcement against illicit activity.  At the same time, the relevant legal framework for combating terrorist funding creates potential areas of liability, including, in particular under the Anti-Terrorism Act (“ATA”) and the Justice Against Sponsors of Terrorism Act (“JASTA”).  These considerations are important for companies and banks that provide services related to virtual currency, but also are relevant to any company that could be the target of ransomware attacks since attackers may be sanctioned entities or have ties to terrorism and as a matter of practice demand that the ransom payment be made in virtual currency.

Continue Reading Cryptocurrency and Other New Forms of Financial Technology: Potential Terrorist Financing Concerns and Liability

On June 10, 2021, the Standing Committee of the National People’s Congress of China adopted the “Anti-Foreign Sanctions Law,” which represents the Chinese government’s most recent and direct response to U.S. and EU sanctions that have been imposed on China during the last year.  The law, which took immediate effect, authorizes the Chinese government to take certain actions when foreign countries are deemed to breach international laws or basic norms of international relations, seek to contain or suppress China’s interest under pretext or using their domestic laws, adopt restrictive measures against Chinese citizens or organizations on a discriminatory basis, or interfere with China’s domestic affairs.  Given how broadly a number of the provisions are worded, it remains to be seen how the Chinese government will implement and enforce the law. Continue Reading China Passes “Anti-Foreign Sanctions Law”

President Biden recently issued a highly anticipated executive order that effectively replaces an existing ban on U.S. persons trading in securities of companies determined to be linked to the Chinese military.  Effective August 2, 2021, U.S. persons are prohibited from purchasing (and, as of June 3, 2022, selling) certain publicly traded securities of companies listed in a new “Chinese Military-Industrial Complex Company” (CMIC) list that includes companies in a variety of sectors.

Please click here to read the full alert memorandum.

The U.S. government recently announced that it issued multiple subpoenas to Chinese companies pursuant to an executive order that provides the U.S. government with the authority to review and prohibit or restrict transactions conducted by any person, or involving any property, subject to U.S. jurisdiction, if they involve certain categories of information and communications technology and services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of certain foreign adversaries (including China and Russia) and pose an undue or unacceptable risk to U.S. national security.

Under this authority, which is furtherance of a recent trend toward controlling acquisitions of foreign hardware and software, the U.S. government can require the unwinding of already completed transactions (for example, by requiring equipment already installed in a U.S. network be removed) and prohibit future transactions.

Please click here to read the full alert memorandum.

On May 5, 2021, the European Commission proposed a new draft regulation that, if adopted, would introduce sweeping measures aimed at controlling the impact of foreign subsidies on the EU single market.  The Proposed Regulation reflects the EU’s policy priority to pursue an “open strategic autonomy” and fits into the EU Industrial Strategy, updated on the same date.

The Proposed Regulation follows the June 2020 White Paper on foreign subsidies and a public consultation process.  It (i) introduces a merger control regime for vetting transactions affected by foreign subsidies; (ii) grants the EC broad powers to investigate and impose remedies concerning foreign subsidies that distort competition in the EU; and (iii) allows the EC to suspend or block public procurement in the EU.

Please click here to read the full alert memorandum.

On April 19, 2021, in response to reported human rights violations by the regime of President Alexander Lukashenko, the U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”) issued General License 2H (“GL 2H”)[1] under the U.S. sanctions program targeting Belarus.  GL 2H revokes and replaces General License 2G (“GL 2G”),[2] which authorized U.S. persons to engage in transactions with nine sanctioned Belarusian state-owned entities. Continue Reading OFAC Revokes Key General License Under Belarus Sanctions Program