On May 9, 2023, we wrote about Decree of the President of Russia No. 302 that created a framework for nationalization of Russian assets belonging to persons from “unfriendly” states (the “Decree”). At that time the only assets to which nationalization applied were the shares in strategic energy companies Unipro, controlled by the Government of
United Kingdom
UK National Security Regime: Annual Report 2023 and Observations on Recent Practice
On 11 July 2023, the UK Government published its second Annual Report on the National Security and Investment Act 2021 (the “Act”).
The Annual Report begins with an introduction by Oliver Dowden MP, the Deputy Prime Minister, who is the formal decision-maker under the Act in his role as the Secretary of State in the Cabinet Office. This introduction seeks to reassure investors that the Act is a “light-touch, proportionate regime that offers companies and investors the certainty they need to do business, while crucially protecting the UK’s national security in an increasingly volatile world.”Continue Reading UK National Security Regime: Annual Report 2023 and Observations on Recent Practice
UK Russian Sanctions Expanded Following G7 Summit
On 19 May 2023, the UK expanded its list of Designated Persons under the Russia (Sanctions) (EU Exit) Regulations 2019 by adding 86 new persons, comprising 42 individuals and 44 Russian legal entities. The newly Designated Persons are primarily involved with, or linked to, the defense, transportation, extraction, metallurgy, financial and agricultural sectors of the Russian economy. This expansion of sanctions appears to follow the G7 Leaders’ Statement on Ukraine, which was also issued on 19 May.Continue Reading UK Russian Sanctions Expanded Following G7 Summit
Cleary Gottlieb FDI Newsletter: January–April 2023
The first few months of 2023 have seen significant developments in the FDI landscape that will have a major impact on cross-border transactions. Deal makers need to be aware that the scope of FDI control is increasing:
- With the United States taking major steps towards implementing an outbound FDI screening mechanism (which are echoed in Europe) and the European Commission further developing the EU Foreign Subsidies Regulation, new game changing regulatory frameworks take clearer shape.
- Following the EU Commission’s calling of recent years, by the end of the year almost all EU member States will have adopted a national FDI screening regime.
- On 27 April 2023, the UK Government published updated guidance that reflects its developing practice. Since January 2022, five transactions have been prohibited and 10 deals have been cleared subject to remedies.
Continue Reading Cleary Gottlieb FDI Newsletter: January–April 2023
UK National Security Regime: Enforcement Practice and Updated Guidance
On 27 April 2023, the UK Government published updated guidance on its recently introduced national security and investment screening regime.Continue Reading UK National Security Regime: Enforcement Practice and Updated Guidance
3 Foreign Investment Issues Affecting Cross-Border Deals
Cleary Gottlieb partner Chase Kaniecki and associate Will Dawley co-authored an article titled, “3 Foreign Investment Issues Affecting Cross-Border Deals,” which was published by Law360.
In the article they provide a summary of the recent developments in the FDI review regimes in the EU and the U.K. and highlight three of the…
United Kingdom Broadens Scope of Potential Russian Sanctions Targets
On February 10, 2022, the United Kingdom published new legislation (the “Amendment”) significantly expanding the scope of targets on which the UK government may impose sanctions relating to Russia.[1] The Amendment, which was issued in response to the current situation in Ukraine and takes immediate effect, broadens the designation criteria of the existing Russia (Sanctions) (EU Exit) Regulations 2019.[2] Whereas the existing provisions were limited to persons directly engaged in activities relating to the “destabilisation” of Ukraine,[3] the Amendment further authorizes sanctions against:
- any “Government of Russia-affiliated entity,” defined as entities:
- directly or indirectly owned or controlled by the Russian government;
- in which the Russian government directly or indirectly holds a minority interest;
- that receive or have received financing directly or indirectly from the Russian Direct Investment Fund or the National Wealth Fund; or
- which “otherwise obtain a financial benefit or other material benefit” from the Russian government;
- individuals or entities carrying on business of “economic significance” (which is not further defined) to the Russian government;
- individuals or entities carrying on business in a sector of “strategic significance” to the Russian government, defined as the Russian chemicals, construction, defence, electronics, energy, extractives, financial services, information, communications and digital technology, and transport sectors; and
- individuals or entities that directly or indirectly own or control or work as a director (whether executive or non-executive), trustee, or equivalent of any entity in the above categories.
As before, sanctions imposed under the United Kingdom’s Russia sanctions program include an asset freeze, travel ban (for individuals), prohibition on making funds or economic resources available to or for the benefit of the designated party, and prohibition on dealing with funds or economic resources of the designated party (as well as entities owned or controlled by the designated party).Continue Reading United Kingdom Broadens Scope of Potential Russian Sanctions Targets
Wide-Ranging New UK National Security Regime Comes Into Force
The National Security and Investment Act 2021, which was passed on 29 April 2021, comes into force today. The new regime, which subjects investments in many companies active in the UK to mandatory review on national security grounds, will be among the most wide-ranging in the world. It represents the most significant change in the…
New UK National Security Regime To Come Into Force In January 2022
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…
United States Designates Myanmar Military Conglomerates
On Thursday, March 25, the Biden administration imposed blocking sanctions against Myanma Economic Holdings Public Company Limited (MEHL) and Myanmar Economic Corporation Limited (MEC), pursuant to Executive Order 14014 (the Burma EO), in response to the military’s refusal to disavow the February 1, 2021 military coup.[1] As a result of the sanctions, all transactions and dealings within U.S. jurisdiction, including U.S. dollar interbank transfers, in which MEHL and MEC have a direct or indirect interest are prohibited, and all property within the United States or in the possession or control of U.S. persons in which either has a direct or indirect is blocked. These sanctions also extend to any entity directly or indirectly 50% or more owned by one or more sanctioned persons or entities, directly or indirectly.[2] The move was made in coordination with the United Kingdom, which also imposed blocking sanctions against MEHL.[3] You can read our previous blog post on the Burma EO here.[4]
Continue Reading United States Designates Myanmar Military Conglomerates