President Trump on Monday signed a defense funding bill into law that includes an expansion of federal authority to review and potentially block foreign investments based on national security considerations. (Law.com, Aug. 13 and Wall Street Journal, Aug. 15)
CFIUS recently ordered Chinese conglomerate HNA Group Co., Ltd to sell its majority stake in a 21-story Manhattan building whose tenants include a police precinct assigned to protect Trump Tower.
- The defense bill included the Foreign Investment Risk Review Modernization Act of 2018 (FIRMMA), which expands the authority of the Committee on Foreign Investment in the United States (CFIUS) — a U.S. interagency committee that conducts national security reviews of foreign investment. (Pensions & Investments, Aug. 13)
- CFIUS's scope now expands to cover the national security implications of transactions that could result in control of a U.S. business by a foreign person — and to block transactions or impose measures to mitigate any threats to U.S. security. (Law.com, Aug. 13)
- FIRRMA expands the list of covered transactions to include some foreign purchases and leases of real estate near military and other strategic facilities. Responding to concerns raised by The Roundtable and other industry groups, language is also included that exempts real estate located in 'urbanized areas' from the criteria of a covered transaction. The Census defines an urbanized area as one comprising more than 50,000 people. See pages 820-826 of the final congressional conference report.
CFIUS recently ordered Chinese conglomerate HNA Group Co., Ltd to sell its majority stake in a 21-story Manhattan building whose tenants include a police precinct assigned to protect Trump Tower. (Bloomberg, Aug. 8 and The Wall Street Journal, Aug. 10)