Radford Taylor Partners - New US Foreign Investment Regulations for China

Radford Taylor Partners - US introduces interim regulations to govern Chinese foreign investment.

Radford Taylor Partners analysts say the US federal government will bring harsher regulations on foreign investment into effect from the beginning of November. The tighter rules will target sensitive sectors including telecommunications and technology and are designed to restrict Chinese investment in a number of sensitive industries.

The Committee on Foreign Investment in the United States (CFIUS) assesses stock buys and acquisitions to decide whether or not they could pose any threat to national security. The panel was fortified by legislation that was signed into law earlier this year. Much of the panel’s most important work targets Chinese businesses that try to purchase high-end semiconductor manufacturers and a range of other technology firms.

Charles Murphy, Director of Private Clients at Radford Taylor Partners says the new foreign investment regulations will focus on 27 sensitive sectors including aircraft manufacturing, semiconductors and telecommunications, military equipment and guided missiles.

The new investment regulations will call for any investments in these sensitive industries to be reported to the CFIUS if the foreign investor’s interest would provide any access to non-public data or give them the authority to nominate a board member.

Radford Taylor Partners analysts say the CFIUS will then decide whether to approve the proposed deal or conduct a deeper investigation within a 30 day period.

The regulations are a temporary measure and will run for 12 months, starting November 10, while the CFIUS devises a more permanent, formal set of regulations to govern foreign investment.

Radford Taylor Partners believe the temporary rules could lead to greater number of filings with the CFIUS.

Source: Radford Taylor Partners


Categories: Investments

Tags: CFIUS, foreign investment regulations, Radford Taylor Partners, RadfordTaylor


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