CFIUS probing past Chinese investment

The letters, which began landing in dozens of companies’ email inboxes in the spring, reflect the broadly held view among U.S. officials and lawmakers that the United States failed in recent years to adequately screen investments pouring in from China and other countries — particularly low-profile venture-capital investments that didn’t make the headlines. The 2018 Foreign Investment Risk Review Modernization Act, or FIRRMA, aimed to address that by boosting CFIUS’s funding and powers.

Tech executives say the inquiries are part of a growing chill in U.S.-China relations that has made Silicon Valley companies more cautious about accepting foreign investments and caused some China-backed venture-capital funds to curb their activity.

The decoupling can be seen in data showing that Chinese venture-capital investment in the United States dropped to a six-year low in the first half of 2020, to $800 million, according to research provider Rhodium Group. VC investment by U.S. firms

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A Close Look At CFIUS’ New Critical Tech Reporting Rule

Law360 (September 22, 2020, 5:45 PM EDT) — The U.S. Department of the Treasury published a final rule on Sept. 15, revising provisions in the regulations of the Committee on Foreign Investment in the United States that implement Section 721 of the Defense Production Act, as amended by the Foreign Investment Risk Review Modernization Act of 2018.

The rule becomes effective Oct. 15, and once in place, will do away with the critical technology mandatory declaration based on North American Industry Classification System codes, which are applicable to U.S. businesses in one of 27 industries, that were part of a rule published Jan. 17.

In that rule, the Treasury…

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