On February 26, 2020, the Congressional Research Service (“CRS”), a public policy research think tank of the U.S. Congress, released a report on the Committee on Foreign Investment in the United States (“CFIUS”).
The CRS report reviewed backgrounds for historical development of the CFIUS’s authority and highlighted key provisions of recent legislative and regulatory developments, such as the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”) and the final regulations recently issued by the Department of Treasury on January 13, 2020.
The CSC report also provided many statistics in the annual report released by CFIUS to the U.S. Congress in December 2019, which indicated that in recent years, “the largest number of transactions in critical technology occurred in the Professional Services and Computer and Electronics sectors.” In addition, among all foreign investors, investors from China were “the most active in acquisitions, takeovers or mergers during the 2015-2017 period”.
With respect to the recent CFIUS regulatory developments, the report voiced congressional concerns on the following issues:
potential loss of leading-edge technologies developed by start-up firms
potential harm to capital needs in fast-growing industries that may rely on foreign funds in order to expand
potential impacts on economic interests of state and local governments that seek foreign investment to support local jobs and tax revenues
The CRS report is available here.