Proposed New Rule Expanding CFIUS Enforcement Authority: Broader Information Requests and Subpoena Power, Costly CMPs
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
International
- event Date
Wednesday, July 10, 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 webinar will take an in-depth look at the recently proposed new rule that significantly expands the Committee on Foreign Investment in the United States' (CFIUS or the committee) enforcement authority and discuss the potential impact on counsel and clients. The panel will examine under what circumstances the proposed rule would allow CFIUS to make broader information requests and from whom the information may be requested. The panel will also examine the greater subpoena power CFIUS would have under the new rule, the significant increase in potential maximum CMPs (from $250,000 to $5 million), and under what new circumstances CMPs could be imposed.
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.
Ms. Padgett’s practice focuses on a variety of international trade matters, including CFIUS reviews, export controls, economic sanctions, national security and litigation strategy in international investment and arbitration. Prior to joining the firm, Ms. Padgett successfully served for nine years in the Office of the Legal Adviser (L) at the U.S. Department of State, including as the department’s lead CFIUS lawyer and principal lawyer on international investment matters. Additionally, she represented the State Department in interagency policy-making processes and worked closely with senior officials at the NSC, USTR, the departments of Justice, Defense, Treasury, Commerce and Homeland Security, and other federal agencies. Ms. Padgett was instrumental in advising State Department principals on CFIUS national security reviews of transactions, mitigation agreements, litigation strategy and congressional inquiries. She advised policy clients, including officials in the State Department’s Bureau of Political-Military Affairs, on compliance issues under the Arms Export Control Act and the International Traffic in Arms Regulations (ITAR), including in connection with foreign military sales and export licenses for direct commercial sales.
The U.S. Department of the Treasury recently released a proposed rule to amend regulations to significantly expand and strengthen CFIUS' enforcement authority. The proposed rule is one more example of the government's heightened scrutiny of international trade and foreign investment in the U.S.
Notably, the proposed rule would give CFIUS greater authority to conduct preliminary fact-finding investigations, broadening the scope of information the committee may request as well as who may be the targets of such requests. For example, under current regulations, CFIUS may request information related to non-notified transactions for the purpose of assessing whether it has jurisdiction. However, the proposed rule would allow the committee to request more information for additional purposes including to determine whether a transaction raises national security concerns or is subject to the mandatory filing requirement.
Additionally, the proposed rule makes certain party responses mandatory and gives the committee greater third-party subpoena power to compel the production of information.
The rule also creates a limited timeframe during which parties must respond to proposed mitigation terms, significantly increases the maximum CMPs that may be imposed from $250,000 to $5 million, and expands the circumstances under which CMPs may be imposed.
Listen as our expert panel provides an in-depth look at the CFIUS proposed rule and the significant impact these regulatory changes could have on practitioners and their clients. The panel will offer best practices for navigating the proposed rule and preparing for compliance.
- Introduction: overview of CFIUS authority
- Proposed new rule
- Purpose
- Broadened authority to request information related to non-notified transactions
- Mandatory responses for parties to the transaction
- Expanded third-party subpoena power
- New timeframe to respond to CFIUS proposed or revised mitigation terms
- Increased maximum CMPs and when they may be imposed
- Impact on practitioners and clients
- Preparing for compliance
- Practitioner takeaways
The panel will review these and other important considerations:
- How does the proposed rule expand the type of information that may be requested by CFIUS and who may be targeted by such requests?
- How does the proposed rule grant CFIUS greater subpoena power over third parties?
- What is the purpose behind the three-business-day timeline to respond to proposed mitigation terms? How may this affect parties' responses?
- What may be the impact of the increased maximum CMPs?
- How may counsel and their clients begin to prepare for compliance?
