While the US remains open to foreign investment, certain investments are likely to face enhanced scrutiny - Lexology | Canada News Media
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While the US remains open to foreign investment, certain investments are likely to face enhanced scrutiny – Lexology

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4 years ago

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Investors be warned. In 2020 the U.S. Department of the Treasury issued comprehensive new regulations to implement the Foreign Investment Risk Review Modernization Act (“FIRRMA”). These include provisions that address the treatment of indirect investments through investment funds that should be carefully considered by anyone contemplating such an investment in a U.S. business.

When analyzing potential investments, it is imperative to consider regulatory regimes that may impact the relevant transactions. The Committee on Foreign Investment in the United States (“CFIUS”) is a multi-agency group that reviews foreign investments in certain U.S. entities and assets to determine whether they present a national security concern and, if so, whether that concern can be mitigated. If such concerns cannot be mitigated, or the parties are unwilling to agree to the mitigation proposed, CFIUS may recommend that the President prevent or reverse the transaction or take other steps to alleviate the potential threat to the country. In a year that has seen other jurisdictions introduce new foreign direct investment oversight, the U.S. government implemented FIRRMA, which contains the first significant revisions to CFIUS’s process and jurisdiction in more than a decade.

“Parties to certain transactions are obliged to file a declaration or notice to CFIUS in advance of completing their transaction.”

Perhaps most notably, while participation in the CFIUS review process historically has been voluntary, pursuant to FIRRMA parties to certain transactions are obliged to file a declaration or notice to CFIUS in advance of completing their transaction. Failure to submit such declarations to CFIUS in advance of completion may result in significant penalties – up to US$250,000 or the full value of the transaction, whichever is greater. In addition, under the regulations implementing FIRMMA, certain non-controlling investments in U.S. businesses with sufficient connections to critical technologies, critical infrastructure, and/or sensitive personal data of U.S. citizens (so-called “TID U.S. businesses”) can trigger the jurisdiction of CFIUS and may be subject to mandatory reporting requirements.

CONCLUSION

Parties considering cross-border transactions, as well as those who provide capital or insurance for such transactions, should consider potential national security concerns both in the selection of transaction partners and in structuring proposed transactions. A review by CFIUS is a fact-specific inquiry, and early planning may minimize risk and time delays. We advise clients to consult with counsel before cross-border deals are structured and the parties chosen to assist in navigating around potential roadblocks.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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1 day ago

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October 16, 2024

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

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6 days ago

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October 11, 2024

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Economy

S&P/TSX composite little changed in late-morning trading, U.S. stock markets down

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1 week ago

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October 10, 2024

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TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.

The S&P/TSX composite index was up 0.05 of a point at 24,224.95.

In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.

The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.

The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.

The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.

This report by The Canadian Press was first published Oct. 10, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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