In an important development for the legal professionals working in multinational corporations and international law firms, President Biden signed a new executive order on August 9, dealing with United States investments in certain national security technologies and products in the so-called “Countries of Concern.” This came after months of in-depth deliberations. The detailed report can be found here.
The executive order, henceforth referred to as “the EO,” introduces outbound investment screening for the first time in the United States. It is expected to impact a wide range of industries, especially the ones dealing with national-security-sensitive technologies. The EO showcases the increasing scrutiny of the cross-border transactions in the United States, focusing primarily on outbound investments.
On the same day the EO was issued, the Department of the Treasury also released a draft advance notice of proposed rulemaking, or ANPRM. The department is inviting public comments on the regulations proposed for the implementation of the EO. The legal community will perhaps look at this opportunity to voice their interpretation and concerns relating to the outbound investment screening.
The EO is a significant development in the realm of U.S. investments in national security technologies and products. Legal professionals will need to familiarize themselves with the specifics of the order and its potential impact on the operations of their respective firms or corporations. It is particularly crucial for those involved in cross-border transactions and dealing with sensitive technologies.
The outbound investment screening now can provide a protective measure for national security interests but may also usher operational challenges. How effectively the legal fraternity adapts to these changes remains to be seen.