Partners Giovanna Cinelli, David Plotinsky and Ken Nunnenkamp commented on a newly proposed US outbound investment screening framework in this GCR article.
Commenting on the knowledge standard, David said it “makes practical sense” and is consistent with the government’s approach in other national security regulatory systems such as export control.
Ken told GCR that the overall complexity of the regime is significant and will make it difficult for investors to discern the nature of “covered activities”.
“The breadth and uncertainty will undoubtedly lead to significant, early overcompliance, unless the comment period is used to set forth substantial guidance to assist in making these interpretations,” he said. “The current uncertainties also risk transaction avoidance while these issues are resolved.”
According to Giovanna, the regime highlights the US government’s view that the development of certain technologies or engagements with certain foreign organizations should be delayed so that the United States can recalibrate its domestic capabilities.
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