The Deal Quotes Laura Black on ‘Reverse CFIUS’
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For its article “Biden Administration Confronts ‘Reverse Cfius’ Loopholes,” The Deal quoted Akin international trade senior counsel Laura Black. The article looks at the scope of a forthcoming screen for outbound investment into China due to be announced via a Biden administration executive order. The Deal notes that it could have implications for U.S. investment into companies worldwide doing business with China, as well as for overseas subsidiaries of U.S. companies, while, at the same time, closing loopholes preventing circumvention.
Laura, who served as Director of Policy and International Relations, Committee on Foreign Investment in the United States (CFIUS), Office of Investment Security, said, “You don’t want it to be easy for companies to evade whatever program and prohibitions are set up.”
On the question of whether the E.O. would cover U.S. subsidiaries abroad, she said, “If you don’t cover subsidiaries at all, that could be — from the government’s point of view — a loophole.”
Regarding whether the E.O. would limit U.S. investment into unaffiliated foreign companies with business in China, Laura said, “I’m skeptical they’re going to go down very low in terms of ownership through third countries at this stage.” She added that one consideration for U.S. intervention might be active control over a foreign company by a U.S. entity or investor.
On the topic of U.S. allies deploying their own outbound investment screens, she said that if the U.S. were to be a first mover, it could disadvantage U.S. investors.