New CFIUS Rules to Enhance Enforcement and Investigation Activities

On April 11, 2024, the Committee on Foreign Investment in the United States (CFIUS), a multi-agency committee administered by the U.S. Treasury Department, released a proposed rule (“Proposed Rule”) to amend the CFIUS regulations.[1]  The Proposed Rule seeks “to enhance the Committee’s identification and resolution of national security risks” by expanding the scope of information that CFIUS can seek from parties and its ability to compel production of such information.  As summarized below, the proposed authorities will bolster CFIUS’s ability to monitor and investigate non-notified transactions as well as potential violations of mitigation obligations, including by increasing financial penalty exposure to parties and streamlining CFIUS’s ability to issue subpoenas.  Comments to the Proposed Rule will be due within 30 days of publication in the Federal Register, which is expected in the coming days. 

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In-Person Event: US Export Controls Workshops in the UK – July 16-18, 2024

From EAR to ITARnity: Ever-Challenging US Export Controls Compliance

When: July 16-18, 2024

Where: Stratford-upon-Avon, UK

This hugely successful and highly praised event on US export controls regulations, which is jointly organised by Export Group for Aerospace, Defence & Dual-Use (EGADD) and Squire Patton Boggs, will be celebrating its 17th Anniversary when it takes place in July 2024.

For this year, the event will, once again, also be organised in close partnership with BAE Systems. As a major, multinational company, BAE Systems has considerable practical experience in dealing with the challenges arising from International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR) compliance.

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White House Issues Executive Order to Strengthen Cybersecurity at US Ports

On February 21, 2024, the White House issued an executive order implementing various measures to bolster the security of US ports by expanding the US Coast Guard’s authority to regulate maritime cybersecurity, requiring the reporting of cyber incidents and investing in the US port critical infrastructure. With the increasing use of connected systems in the maritime industry, these recent measures continue to demonstrate the administration’s focus on improving the cybersecurity of the nation’s critical infrastructure, including vessels and port facility operations, and reflects the increasing merger of economic and national security concerns in the Marine Transportation System (MTS). This particular executive order is not a one-off initiative.  Rather, it is part of a broader administration strategy targeting perceived national security threats and potential threats to supply chains, including those supporting critical infrastructure.[1]

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US ITC Launches Global Rice Trade Investigation

On March 1, 2024, the US International Trade Commission (ITC) officially announced the initiation of a new factfinding investigation into the global rice market. The investigation, titled “Rice: Global Competitiveness and Impacts on Trade and the U.S. Industry” (Investigation No. 332-603), was requested by US House of Representatives Committee on Ways and Means Chair Jason Smith (Republican-Missouri). For more information about Chair Smith’s request and the background and scope of the investigation please see our recent blog post.

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European Commission Investigates Chinese State-backed Company’s Participation in a European Tender Using New Powers Under the Foreign Subsidies Regulation

The European Commission has launched its first ever formal investigation into a potentially market-distorting foreign subsidy, exercising its powers under the 2023 Foreign Subsidies Regulation (FSR).

The investigation concerns the participation of a Chinese state-owned train manufacturer in a public tender organized by the Bulgarian Ministry of Transport and Communications. The outcome of this case will be of major relevance both for companies active in the EU that have foreign state or sovereign investors, and for EU-owned companies that compete with them.

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Upcoming/New CFIUS Filing: Cunova GmbH (Germany) and KME America Marine Tube & Fitting LLC (U.S.)

Status: Upcoming/New Filing

Acquirer: Cunova GmbH (Germany); KME Group SpA (Italy); SDCL EDGE Acquisition Corporation (Cayman Islands)

Acquired: KME America Marine Tube & Fitting LLC (U.S.)

Value: $736 million

Industry Tags: Specialty Metals; Metals; Aerospace        

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Unveiling the New EU Foreign Investment Regime

To address growing geopolitical tensions and technological shifts, the European Commission presented, on 24 January 2024, five new initiatives for strengthening the EU’s economic security. Part of the package is a proposal for a new regulation on the screening of foreign investments, whose aim is to update Regulation 2019/452 (FDI Regulation), which is currently in force. As explained by the European Commission, “the proposed changes reflect new geopolitical and security challenges” and “address the gaps and shortcomings” of the existing system.

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CFIUS Clearance: Brookfield Infrastructure Partners LP and FirstEnergy Transmission, LLC

Status:      Clearance

Acquirer:            Brookfield Infrastructure Partners LP (Canada)

Acquired:            FirstEnergy Transmission, LLC (U.S.)

Value:                  $3.5 billion

Industry Tags:    Energy; Regulated Utilities

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BIS Amends the EAR To Implement Additional Sanctions Against Russia and Belarus and To Revise Existing Export Controls on Russia, Belarus and Iran

On January 25, 2024, the US Department of Commerce Bureau of Industry and Security (BIS) published amendments to the Export Administration Regulations (EAR) expanding the sanctions against Russia and Belarus through new and revised licensing requirements. The amendments also refined existing export controls on Russia, Belarus and Iran to enhance the effectiveness of, and better align the controls with, those of US allies and partners.

These amendments to the EAR are in harmony with the wave of increasingly restrictive sanctions against Russia beginning in February 2022 (see our alert) and again in February 2023 (see our alert). 

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New US Action Against Melamine Imports

On February 14, 2024, US melamine producer Cornerstone filed antidumping (AD) and countervailing duty (CVD) petitions against melamine imports from Germany, India, Japan, the Netherlands, Qatar, and Trinidad and Tobago claimed to be (a) dumped – i.e., sold into the United States at less than fair/normal value prices, and (b) government subsidized.  AD case is against all these countries.  CVD is just against Germany, India, Qatar, and Trinidad and Tobago.  For AD, normal value is the home market or third-country price, or actual cost, plus a reasonable profit of the foreign producer/exporter.

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