The Treasury Department has released its “Final Rule” which will impose on U.S. persons notification requirements and restrictions for transactions involving entities engaged in activities relating to semiconductors and microelectronics, quantum information technologies, and artificial intelligence systems in “countries of concern.” The rule will go into effect on January 2, 2025.
Continue Reading You’re Invited: U.S. Outbound Investment Security Program Webinar on December 16, 2024Sanctions on Russian Securities Infrastructure Create Additional Hurdles to Divesting from Russia
The Russian financial services sector remains a key target of U.S., UK, and EU sanctions. As discussed below, a number of recent such sanctions against Russia and countermeasures by the Russian government have further complicated efforts for investors seeking to divest listed securities from Russia.
Continue Reading Sanctions on Russian Securities Infrastructure Create Additional Hurdles to Divesting from RussiaTreasury Issues Final Rule Enhancing CFIUS Mitigation and Enforcement Authority
By Chase D. Kaniecki & Ryan Brown on
On November 18, 2024, the U.S. Department of the Treasury (“Treasury”), as Chair of the Committee on Foreign Investment in the United States (“CFIUS”), issued a final rule (the “Final Rule”) that enhances CFIUS’s mitigation and enforcement authority. The Final Rule, which will take effect December 26, 2024 (30 days after the Final Rule was published in the Federal Register), represents a continued evolution of CFIUS’s approach to monitoring, compliance, and enforcement and largely is consistent with the Notice of Proposed Rulemaking (the “Proposed Rule”) issued on April 11, 2024, which we wrote about here. We previously wrote about the first-ever 2022 CFIUS Enforcement and Penalty Guidelines here.
Continue Reading Treasury Issues Final Rule Enhancing CFIUS Mitigation and Enforcement AuthorityOFAC Sanctions Gazprombank, Continues to Target Russian Financial Sector and Foreign Financial Institutions
By Chase D. Kaniecki, Yulia A. Solomakhina, Samuel H. Chang & Catherine Johnson on
On November 21, 2024, the U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”) designated additional entities operating in the Russian financial services sector, including Gazprombank Joint Stock Company (“Gazprombank”), the largest and, until November 21, most significant remaining non-sanctioned Russian bank that has served as the primary conduit for processing payments for Russian gas sold to third countries since March 2022. Specifically, OFAC designated Gazprombank pursuant to Executive Order 14024 (“E.O. 14024”) for operating or having operated in the financial services sector of the Russian Federation economy, and noted that Gazprombank had served as a “conduit for Russia to purchase military materiel,” and also was used by the Russian government to pay military personnel and their families.
Continue Reading OFAC Sanctions Gazprombank, Continues to Target Russian Financial Sector and Foreign Financial InstitutionsEU FDI: State Of The Union (2024)
On October 17, 2024, the European Commission (“Commission“) published its forth annual report on the screening of foreign direct investments (“FDI“) into the Union (the “Report“), following previous editions published in October 2023, September 2022 and November 2021. Notable findings include the follow:
Continue Reading EU FDI: State Of The Union (2024)Long-Awaited U.S. Outbound Investment Regime Published, Will Become Effective January 2, 2025
By Chase D. Kaniecki, Samuel H. Chang, B.J. Altvater & Ryan Brown on
On October 28, 2024, the U.S. Department of the Treasury (“Treasury”) issued a long-awaited Final Rule (the “Final Rule”) implementing the U.S. Outbound Investment Security Program (the “Program”).[1] Under the Program, effective January 2, 2025, U.S. persons will be prohibited from engaging in, or required to notify Treasury regarding, a broad range of transactions involving entities engaged in certain activities relating to semiconductors and microelectronics, quantum information technologies, and artificial intelligence (“AI”) systems in “countries of concern” (presently limited to China, Hong Kong, and Macau).
Please click here to read the full alert memorandum.
Continue Reading Long-Awaited U.S. Outbound Investment Regime Published, Will Become Effective January 2, 2025Russian Countermeasures: The Governmental Commission Tightens Conditions for Exits by Investors From Unfriendly Jurisdictions
As anticipated by recent media coverage, the Governmental Commission for Control over Foreign Investments (the “Governmental Commission”) published its October 15, 2024 decision tightening conditions for exits by investors from “unfriendly” jurisdictions (i.e., those that have imposed sanctions against Russia) (the “Decision”). Prior to the Decision, the Governmental Commission had already imposed various conditions when approving sales of equity in Russian companies by parties from “unfriendly” jurisdictions. Such conditions were typically communicated to the applicants in the excerpts from the minutes of the Governmental Commission meetings. The Decision lists the revised conditions that should generally be imposed by the Governmental Commission when approving such sale transactions:
Continue Reading Russian Countermeasures: The Governmental Commission Tightens Conditions for Exits by Investors From Unfriendly JurisdictionsPrice Cap Coalition Issues Updated Advisory for Maritime Oil Industry
By Chase D. Kaniecki, Samuel H. Chang & Ryan Brown on
Posted in Export Control, International Trade
On October 21, 2024, an international coalition consisting of the G7 countries—Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States[1]—as well as the European Union, Australia, and New Zealand (the “Price Cap Coalition”) issued an updated advisory containing new recommendations and best practices for the maritime oil industry and related sectors[2] relating to promoting responsible practices in the industry, disrupting sanctioned trade, and enhancing compliance with the oil price cap on Russian oil and petroleum products. We previously wrote about the oil price cap here.
Continue Reading Price Cap Coalition Issues Updated Advisory for Maritime Oil IndustryGlobal FDI Update: July – September 2024
By Cleary Gottlieb on
Posted in FDI, Foreign Investment
- United States: CFIUS releases 2023 Annual Report; expanded scope for CFIUS jurisdiction and filing requirements; new export controls on quantum computing and other advanced technologies.
- United Kingdom: Annual Report published; remedies imposed on four transactions.
- European Union: First merger commitments adopted under EU Foreign Subsidies Regulation.
- Belgium: First Annual Report on Belgian FDI Screening; revised notification forms and guidelines.
- France: Close scrutiny for foreign investment in pharmaceutical sector (Biogaran and Doliprane).
- Germany: Prohibition of Chinese investment in gas turbine sector.
- Italy: Annual Report shows that volume of filings remain high but majority deemed out-of-scope and intervention rates low (22 out of 563 filings).
- Netherlands: Proposal for new sectoral investment control regime for defense industry.
- Spain: Government prohibits €619 million acquisition of Spanish train manufacturer Talgo by Hungarian consortium
Definitive Duties Adopted by the EU on Chinese Battery Electric Vehicles to Counteract Subsidies to Apply by October 30
Posted in European Union, International Trade
On October 4, 2024, the European Commission proposal to impose definitive countervailing duties of up to 35.3% on imports of battery electric vehicles (BEVs) from China was adopted by the Council. The duties are imposed on top of the 10% EU import duty for cars.
Continue Reading Definitive Duties Adopted by the EU on Chinese Battery Electric Vehicles to Counteract Subsidies to Apply by October 30