On February 1, the United States Court of Appeals for the Eleventh Circuit unanimously granted a preliminary injunction in Shen v. Simpson, enjoining enforcement of a Florida law regulating foreign ownership of U.S. land. That law prohibits citizens of the People’s Republic of China who are not lawful permanent residents of the United States from purchasing certain real property in Florida. The Eleventh Circuit’s ruling enjoined enforcement of the law against two individual plaintiffs, and the court held that those plaintiffs had shown a “substantial likelihood of success” on their claim that the Florida law was preempted by the Foreign Risk Review Modernization Act of 2018 (“FIRRMA”), the most recent federal statute expanding the authority of the Committee on Foreign Investment in the United States (“CFIUS”), including with respect to certain real estate transactions. In concurrence with the majority, Judge Abudu wrote that the plaintiffs also showed a substantial likelihood of success on their argument that Florida’s law violates the Equal Protection Clause of the Fourteenth Amendment to the U.S. Constitution.
Continue Reading U.S. Circuit Court Finds that Florida Law Prohibiting Foreign Ownership of U.S. Land Likely Preempted by CFIUS StatuteEU Takes Time to Ready Outbound Investment Control Toolkit
On January 24, 2024, the European Commission (“EC”) adopted five initiatives as part of the European Economic Security Strategy unveiled in June 2023.[1] The initiatives are aimed at bolstering the EU’s economic security interests. Their main focus is a proposal for a new EU FDI Screening Regulation aimed at inbound investments.[2] But the package also includes a white paper on outbound investment control (the “White Paper”),[3] launching a debate on whether and how to scrutinize investment outflows from the EU for the first time in the Union’s history.
Continue Reading EU Takes Time to Ready Outbound Investment Control ToolkitFDI Review Regimes are Well-Established and Active; Outbound Investment Regimes are on the Horizon
By Chase D. Kaniecki, Samuel H. Chang, William S. Dawley & B.J. Altvater on
Posted in FDI, Foreign Investment
The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2024”.
In 2024, boards of directors face a well-established, complex and active global foreign direct investment (FDI) landscape in which transactions will regularly trigger multijurisdictional FDI filing and approval processes. This is the case not only with respect to well-known FDI review regimes such as the Committee on Foreign Investment in the United States (CFIUS), but also with newly established, modified, and/or expanded non-U.S. FDI review regimes, particularly in Europe. Indeed, as governments around the world have become increasingly empowered and willing to scrutinize, and in some cases prevent, transactions they deem objectionable, FDI approvals have become a significant regulatory issue for many cross-border transactions.
Continue Reading FDI Review Regimes are Well-Established and Active; Outbound Investment Regimes are on the HorizonEconomic Sanctions: Developments and Lessons for Boards in 2024
By Chase D. Kaniecki, Samuel H. Chang & William S. Dawley on
The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2024”.
Continued volatility in geopolitical events this past year and corresponding responses in sanctions policies highlight the importance of integrating economic sanctions considerations in board agendas for 2024. In particular, boards of directors should be aware of the increasing global collaboration among sanctions authorities as well as the continuing expansion and application of sanctions in new domains such as digital assets. Sanctions developments can be expected to be particularly fluid in 2024 with respect to China, Russia and Venezuela.
Continue Reading Economic Sanctions: Developments and Lessons for Boards in 2024Further EU Sanctions Against Russia: Council Adopts 12th Package
Posted in European Union, Sanctions
On December 18, 2023, the European Union (the “EU”) imposed a number of new economic and individual restrictive measures in relation to Russia (the “12th Package”).[1]
Continue Reading Further EU Sanctions Against Russia: Council Adopts 12th PackageCleary Gottlieb FDI Newsletter: November – December 2023
By Cleary Gottlieb on
- The UK Government consults on changes to the National Security and Investment Act.
- The new Irish FDI regime was signed into law and is expected to come into force in Q2 2024.
- An update on the state of Dutch FDI review confirms active enforcement and adds clarification on retro-active application.
- Seemingly small but impactful changes of the French FDI regime ahead.
- German courts overrule FDI decisions of the German FDI authority. Judicial protection is possible, but more likely succeed on the basis of procedural breaches.
- The Italian Government vetoes an acquisition in the defense sector by French Safran.
- The European Commission published its third annual report on EU FDI screening, providing an overview of FDI enforcement trends and statistics and also published the results of its consultation on the evaluation and revision of the EU FDI screening regulation.
Dutch FDI Review: State Of Affairs
By Romi Lepetska, Julie De Vrieze & Charlotte Benschop on
Posted in European Union, FDI
On November 27, 2023, the Minister responsible for FDI control in the Netherlands updated Parliament on the state of Dutch FDI review[1], including statistics on the number of notifications and investigations. This is the first official update since the entry into force of the general FDI regime. The next update is expected in Q1 2024.
Continue Reading Dutch FDI Review: State Of AffairsUnited States and Mexico to Bolster Cooperation in Foreign Direct Investment Screening
On December 7, 2023, the U.S. and Mexican governments signed a Memorandum of Intent (“MOI”) agreeing to cooperate and bolster foreign investment screening. Both countries have expressed a commitment to establish a bilateral working group for the exchange of information and best practices on foreign investment, with the goal of helping Mexico develop a CFIUS-like screening regime and strengthening the collective security of the United States and Mexico.
Continue Reading United States and Mexico to Bolster Cooperation in Foreign Direct Investment ScreeningThe Control Test in the UK’s Sanctions Framework: Recent Developments
Posted in Sanctions, United Kingdom
A key feature of the UK’s financial sanctions framework is that not only designated persons (listed on the UK’s Consolidated List) are subject to sanctions, but also entities that are ‘owned or controlled’ by designated persons, even if not themselves listed.
Continue Reading The Control Test in the UK’s Sanctions Framework: Recent DevelopmentsUK Government Considers Changes to National Security and Investment Regime
By John Messent & Chloe Hassard on
On 13 November 2023, the UK Government opened a consultation on proposed changes to the National Security and Investment (NSI) regime, less than two years after the regime came into force.
Oliver Dowden MP, the Deputy Prime Minister and formal decision-maker under the regime in his role as Cabinet Secretary, describes the consultation as an opportunity for respondents to share views on how the NSI regime “can be even more business friendly while maintaining and refining the essential protections” needed to protect national security.
In addition to broader questions on stakeholders’ experience of the regime to date, the consultation seeks views on several possible changes.
Please click here to read the full alert memo.