Expansion of CFIUS Could Hinder Future Dealmaking in China

Overview

The Senate and House, with the backing of the White House, are working on bipartisan legislation to broaden the authority of the Committee on Foreign Investment in the U.S., a multi-agency body that has oversight of deals that could lead to the transfer of sensitive technology to rival countries. The current CFIUS statute doesn’t single out any country, but in recent years, the committee has often been focused on deals involving China. Currently, CFIUS can recommend the president block foreign entities from buying majority stakes in U.S. companies; the new bill would let the committee make similar recommendations for deals involving minority investments and joint ventures, along with transactions that it determines involve “emerging technologies.” CFIUS blocked 10 deals between 2014 and 2016 over national-security concerns; China in recent years has accounted for the largest number of reviewed transactions.

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