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

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 Jurisdictions

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 Industry
  • 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
Continue Reading Global FDI Update: July – September 2024

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

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 24, 2024, the European Commission (EC) conditionally approved, under the Foreign Subsidies Regulation (FSR), the acquisition of PPF Telecom Group (PPF) by Emirates Telecommunications Group Company PJSC (e&).[1]  The EC’s clearance is subject to commitments valid for 10 years, which may be extended by another 5 years.  This is the EC’s first Phase II conditional clearance decision under the FSR, which started to apply on July 12, 2023.[2].

Continue Reading First Merger Commitments Adopted under the EU Foreign Subsidies Regulation

On September 26, 2024, a Notice of Proposed Rulemaking (NPRM) was published in the Federal Register to establish regulations that would generally prohibit the sale or import into the United States of certain “connected vehicles” integrating specific pieces of hardware and software, or those components sold separately, with a sufficient nexus to the People’s Republic of China (PRC) or Russia (the Proposed Rule).[1]  The Proposed Rule, which was issued by the U.S. Department of Commerce, Bureau of Industry and Security (BIS), follows an earlier Advanced Notice of Proposed Rulemaking (ANPRM) published on March 1, 2024 and addresses comments received in response to the ANPRM.[2]

Continue Reading Commerce Takes Next Step in Furtherance of Import Prohibition on Connected Vehicles and Systems from China and Russia

On 10 September 2024, the UK Government published its third Annual Report (the “Report”) on the enforcement of the National Security and Investment Act 2021 (the “NSI Act”), covering the period from 1 April 2023 to 31 March 2024.

Continue Reading UK National Security Regime: Annual Report 2024 and Observations on Recent Practice

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