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On December 5, 2024, the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) issued a final rule (the “Final Rule”) implementing the procedures BIS will follow when reviewing information and communications technology (“ICTS”) transactions that may pose a risk to U.S. national security pursuant to Executive Order (E.O.) 13873.[1]  In particular, the Final Rule authorizes the Secretary of Commerce (the “Secretary”) (or the Secretary’s designee, e.g., the Under Secretary of Commerce for Industry and Security) to review, prohibit, or impose mitigation measures on certain types of transactions (“Covered ICTS Transactions”) that involve ICTS designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary and that pose an undue or unacceptable risk to U.S. national security.  We consider each of these concepts below, after which we discuss the review, prohibition, and mitigation processes associated with covered transactions.Continue Reading Commerce Issues Final ICTS Rule; Takes Steps to Implement the Program

On January 3, 2025, President Biden issued an executive order (the “Order”) prohibiting the proposed acquisition of United States Steel Corporation (“U.S. Steel”) by Japan-based Nippon Steel Corporation (“Nippon Steel”) on the basis that the transaction could threaten to impair the national security of the United States (the “Order”).  The Committee on Foreign Investment in the United States (“CFIUS”) referred the transaction to the President on December 23, 2024.    Continue Reading President Biden Issues Order Blocking the Proposed Acquisition of United States Steel Corporation by Nippon Steel Corporation, and The Parties Sue for a New Review

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 January 7, 2025

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, 2024

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 Authority

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 Institutions

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, 2025

On September 12, 2024, the U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”) June 12, 2024 determination entitled “Prohibition on Certain Information Technology and Software Services” entered into effect.  The determination prohibits the direct or indirect provision to Russia from the United States or by U.S. persons of (1) information technology (“IT”) consultancy and design services and (2) IT support services and cloud-based services for enterprise management software and design and manufacturing software (collectively, the “IT Services Prohibition”).  On September 16, 2024, similarly focused export controls took effect, prohibiting the export, reexport, or transfer (in-country) to Russia and Belarus of certain EAR99 software relating to enterprise resource planning (ERP) and other commercial functions, which were issued earlier by the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) on June 12, 2024.Continue Reading U.S., UK, and EU Sanctions Alignment: U.S. IT and Software Sector Service Bans and Export Controls Take Effect as Russia Sanctions Continue to Expand

On September 6, 2024, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) published an interim final rule (IFR) implementing new export controls on quantum computing items and other advanced technologies.[1]  In addition to subjecting these so-called critical and emerging technologies to more stringent export controls, investments by foreign persons into U.S. companies that develop or produce such technologies could be subject to mandatory Committee on Foreign Investment in the United States (CFIUS) filing requirements.[2]Continue Reading Commerce Imposes Export Controls on Quantum Computing and Other Advanced Technologies, Expands Scope of CFIUS Mandatory Filing Requirement