Impact of FIRRMA on Private Equity Funds: Expanded CFIUS Review of Foreign Investments, Filing Requirements
Structuring Investments to Minimize CFIUS Risk
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Banking and Finance
- event Date
Tuesday, August 27, 2024
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE course will examine the impact of the Foreign Investment Risk Review Modernization Act (FIRRMA) on private investment funds. The panel will discuss the regulatory hurdles and filing requirements associated with CFIUS review, and how best to structure foreign investments in private equity and other investment funds to minimize CFIUS risk.
Mr. Davis’ practice focuses on U.S. law and policy affecting international trade and business. He advises clients on foreign investment, export controls, sanctions, anticorruption, and customs laws. Mr. Davis’ practice focuses on representing clients in the merger, acquisition and divestiture process before the CFIUS and on accounting for associated risks. He also advises clients in negotiating and implementing CFIUS mitigation agreements, developing and administering international trade compliance programs .and conducting internal investigations.
Mr. Kaniecki’s practice focuses on international trade and national security matters, including CFIUS, economic sanctions, export controls, customs, and trade remedies. He advises clients on international trade and national security issues and foreign direct investment matters, including filing CFIUS notices and negotiating mitigation agreements in the energy, semiconductor, telecommunications, aerospace and defense, and transportation sectors, among others.
Mr. Mancuso leads the firm’s International Trade and National Security Practice. A former senior member of the President’s national security team, he provides strategic and legal advice to companies, private equity sponsors, and financial institutions operating or investing across international borders. Mr.Mancuso is a leading advisor on matters involving the Committee on Foreign Investment (CFIUS), economic sanctions (OFAC), export controls (ITAR, EAR), and the Foreign Corrupt Practices Act (FCPA), earning praise from boards, CEOs and senior executives for his holistic and "very strategic" approach.
Ms. Hague advises clients on complex cross-border transactional and counseling matters that touch U.S. national security and foreign investment, including reviews by the Committee on Foreign Investment in the United States (CFIUS), economic sanctions administered by Treasury’s Office of Foreign Assets Control (OFAC), export controls (ITAR/EAR), antiboycott regulations, anti-money laundering laws and regulations (FinCEN), and anti-corruption (FCPA).
FIRRMA, included as part of the National Defense Authorization Act for Fiscal Year 2019, expanded CFIUS oversight beyond controlling transactions to a more nuanced category of non-controlling transactions by U.S. businesses with foreign persons. Private equity firms must carefully examine their CFIUS profile and the level and nature of their ownership in a broader range of investments in U.S. companies.
CFIUS has approval authority over non-controlling investments in companies involved with critical technology, critical infrastructure, and sensitive data regarding U.S. persons. It also has the authority to review changes in investor rights that could lead to a covered transaction and certain real estate transactions and transactions that evade or circumvent CFIUS jurisdiction.
Subject to the satisfaction of specific management control and other criteria, foreign limited partners in private equity, venture capital, and hedge funds can qualify for an exclusion from CFIUS jurisdiction. Counsel must have a thorough understanding of the types of foreign investment subject to review and exemptions available to funds whose foreign investments meet exemption criteria.
Also, under the current CFIUS regime filings are mandatory in certain circumstances. Such filings must be made for transactions where a foreign government acquires a "substantial interest" in a U.S. business. CFIUS may also require mandatory filings for investments in U.S. companies involved in certain critical technologies.
Listen as our authoritative panel discusses the latest developments with CFIUS procedures and authority under FIRRMA and the implications on structuring private equity funds and joint ventures involving foreign investors.
- CFIUS authority and M&A review
- FIRRMA: policy concerns with other types of foreign investment
- CFIUS regulatory regime
- Non-controlling investments in companies involved in critical technology, critical infrastructure, and sensitive personal data
- Deals involving real estate close to sensitive U.S. government facilities and air or seaports
- Changes in investor rights that would result in control of a U.S. business or a covered non-controlling investment
- Transactions intended to evade or circumvent
- Carve-outs for investment funds
- Mandatory and voluntary declarations
- Recent changes and developments: proposed new rules
The panel will review these and other high priority issues:
- What is the extent of CFIUS' authority to review foreign investment in the United States?
- What types of investments are of most concern to CFIUS?
- Under what circumstances are CFIUS filings mandatory?
- What are the latest developments regarding CFIUS enforcement and investigation activities?
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