Monday, October 8, 2018

CFIUS Updated with Foreign Investment Risk Review Modernization Act (FIRRMA)

The President signed the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) into law on August 13, 2018 as part of the National Defense Authorization Act (NDAA) for Fiscal Year 2019 (H.R.5515). The law seeks to balance the gains of foreign investment against potential national security risks.

A Harvard Law School Forum reports, "FIRRMA represents the most sweeping changes to the law governing the Committee on Foreign Investment in the United States (CFIUS) since the passage of the Foreign Investment and National Security Act of 2007 (FINSA)." And from Stephanie Zable on Lawfare:
FIRRMA identifies several factors that Congress wants CFIUS to take into account when considering the national security risks posed by foreign investments.
  • Whether a transaction involves a country of special concern that has a strategic goal of acquiring technologies that would affect U.S. technological leadership in that area;
  • The national security effects of cumulative market share control by foreign persons;
  • Whether a foreign person involved in a transaction has a history of complying with U.S. law;
  • [Continues ...]

On August 23, 2018, President Trump held a roundtable with lawmakers on FIRRMA. They discussed the importance of protecting U.S. intellectual property and technology from other countries, specifically China. The fairly brief video on C-SPAN is here. CSIS also has a longer audio broadcast "Putting FIRRMA into Practice: What CFIUS Reform Means for Foreign Investment in the United States."

On a related note, Michael Brown, former CEO of Symantec and co-author of a Pentagon study on China’s Technology Transfer Strategy, had recommended CFIUS reforms in his testimony before Congress on July, 19, 2018.



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