International Trade & Investment Alert
The President has issued the first executive order providing formal direction to the Committee on Foreign Investment in the United States (“CFIUS”) on the risks that it should consider in its examination of foreign investment transactions. While Executive Order 14,083 of September 15, 2022 (the “Executive Order”) is not likely to change substantially CFIUS’s approach to assessing transactions’ national security risks, it reinforces the priority that the Biden administration attaches to U.S. technological leadership, supply chains and certain other factors as important considerations for CFIUS transaction screening.
These factors are not new areas of focus for CFIUS. Rather, the Executive Order appears to be intended to formalize and make transparent certain CFIUS areas of attention. The order also seems to be intended to help businesses and investors better identify what CFIUS will view as being important national security risks and to assist them in deciding whether to submit transactions to CFIUS.
The focus on U.S. technological leadership in the above industries is consistent with other recent U.S. government actions. For example, the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act, which Orrick analyzed in a recent alert, will provide billions of dollars with the goal of advancing U.S. technological leadership in semiconductors and will effectively prohibit certain funding recipients from engaging in various expansion efforts in China.