On March 25, the European Commission issued guidance on the screening of foreign direct investment in the context of the COVID-19 pandemic. The Commission calls Member States to make use of existing FDI regimes to protect critical health infrastructure, supply of critical inputs, and other critical sectors. Further details can be found in our memorandum, accessible here.

As the final CFIUS regulations implementing FIRRMA take effect in the U.S. (and the Trump Administration issues its own cautionary statements regarding review of foreign investments during the crisis), and France announces a revised foreign investment regime of its own, we would like to remind our clients and friends that national security reviews of foreign investment are rapidly growing in scope and importance for cross-border transactions. The United Kingdom has recently confirmed its intention to introduce a new national security regime, joining the pre-existing but expanding regimes in France, Germany, Italy, and elsewhere. The European Union’s emerging effort to coordinate foreign investment review, described in a previous blog post, highlights the trend toward increasing coordination and consultation among national authorities as FDI regimes expand.

Cleary Gottlieb’s Foreign Investment Review group has been at the forefront of these developments, with over two decades of experience in its renowned CFIUS practice and lawyers closely involved in the evolution of each of the national regimes above. We also have experience and strong relationships with local firms in other important regimes such as those of Canada and Australia (which has just announced a broadening of its regime to temporarily eliminate the size of transaction threshold during the crisis). The Foreign Investment Review group coordinates closely with our market-leading Antitrust & Competition and M&A practices to provide the seamless advice guiding global transactions to completion for which Cleary has been known since its inception.

To stay abreast of these developments, please contact any member of our Foreign Investment Review group or your regular contacts at the firm.