Congressional Quarterly recently interviewed Washington, DC-based Litigation partner Mark Maier in “Lawmakers See Threat in Chinese Investment in Railcar Maker,” regarding his thoughts on a state-owned Chinese company’s planned purchase of a stake in a North Carolina railcar producer, and if the purchase might prompt a review by the Committee on Foreign Investment in the United States (CFIUS).
Maier, whose practice focuses on national security and regulatory compliance, said that a CFIUS review of an infrastructure-related transaction would be normal with the committee's dominion in the age of domestic terrorism and other threats.
"A lot of the letter is drafted more on competition, so it has an international trade flavor to it, but the substance is within the scope of CFIUS," Maier said. "[National security] is not just bombs and spying, traditional CIA, Department of Defense stuff. That is national security for sure, but...national security also includes that critical infrastructure."
Maier noted that CFIUS decision-makers are mostly career employees and are for the most part not swayed by congressional pressure, but the two companies involved in the transaction would have been better off if they had brought the matter to the CFIUS’ attention themselves, especially seeing as China is involved.
Maier elaborated that there is potential for CFIUS to block the deal if it finds an adequate amount of national security danger in its review. Yet the review would not automatically stop the deal, due to the fact that CFIUS commonly prefers to work with dealmakers to promote foreign investment. Instead of ending the deal, they may require certain actions such as a corporate reorganization that would alleviate the national security concerns, he said.
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