USA Law and Practice Contributed by: Bradley Justus, Lisl Dunlop, Josh Jowdy and Sandhya Taneja, Axinn, Veltrop & Harkrider LLP
9. Foreign Direct Investment/ Subsidies Review 9.1 Legislation and Filing Requirements Foreign Direct Investment The Committee on Foreign Investment in the United States (CFIUS) is an interagency body that has jurisdiction to review any transaction that may result in foreign control of a US busi - ness. CFIUS also has jurisdiction over transac - tions that involve a foreign actor obtaining a non-controlling interest in certain types of busi - nesses that are of special concern to US national security (referred to as “TID” businesses since they involve ”critical Technologies” or “critical Infrastructure” or the collection or maintenance of ”sensitive personal Data” of US citizens). Most CFIUS filings are voluntary, but a filing is mandatory for acquisitions in which (i) a foreign government actor will obtain a substantial inter - est in a US TID business, or (ii) any foreign actor will acquire an interest in a US business associ - ated with technologies that require US regulatory authorisation for export or transfer. CFIUS can impose penalties for a failure to file a mandatory transaction. CFIUS evaluates each transaction it reviews along three dimensions: • the ability and intention of the acquirer to harm national security (“threat”); • the degree to which the target US business is susceptible to exploitation by the acquirer (“vulnerability”); and • the reasonably foreseeable impact on US national security (“consequence”). CFIUS tends to focus on transactions involving the defence industry, emerging technologies, critical infrastructure, and the mass collection of sensitive personal data. While CFIUS’s ena -
waivers to appease enforcers and potentially avoid incompatible remedies. The Agencies have released a joint model waiver of confiden - tiality. 8. Appeals and Judicial Review 8.1 Access to Appeal and Judicial Review As discussed in 5.1 Authorities’ Ability to Pro- hibit or Interfere With Transactions and 5.6 Issuance of Decisions , the Agencies must seek an injunction in federal district court to stop a proposed transaction from closing after the expi - ration of the HSR waiting period. The parties or the Agencies may appeal this decision to the federal court of appeals for the relevant circuit. The parties may also appeal adverse FTC Part 3 decisions to the full Commission and appeal Commission decisions to a federal court of appeals. 8.2 Typical Timeline for Appeals Appeals can take many months to conclude. His - torically, agency appeals have been rare, though the FTC increasingly has pursued appeals of merger litigation, including in their challenges of Novant Health’s proposed acquisition of two hospitals and Microsoft’s acquisition of video game developer Activision Blizzard. 8.3 Ability of Third Parties to Appeal Clearance Decisions Third parties do not have the right to appeal an Agency’s decision not to challenge a transac - tion. Third parties with standing may, however, bring a private action against the merging parties under the Clayton Act or Sherman Act. See 1.3 Enforcement Authorities .
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