The National Law Review on 21st February reported that the Foreign Investment Risk Review Modernization Act of 2017 has been introduced in the US Congress to reform the national security review of foreign acquisitions of US businesses by the Committee on Foreign Investment in the United States (CFIUS). However, the Act extends well beyond this purpose of reviewing acquisitions by giving CFIUS authority over technology transfer transactions – both export and domestic; and transfers both to an organisation outside the US and to a US organisation that is “controlled” by a non-US person. This, it says, is troubling because it establishes a duplicate government approval process, requires review of technology transfer that the existing export control agencies have determined not to require a licence, and imposes a new level of KYC due diligence to understand the ownership of a US recipient. Under the current CFIUS implementing statute CFIUS has authority over transactions involving the acquisition of control by a foreign person over a US business.
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