Event 14 Oct. 2022
Curtis Provides Capacity Training to the Government of Uganda
Event 21 Sep. 2022
Kalidou Gadio Speaks at AIEN 2022 International Energy Summit
News 15 May. 2023
Curtis represents e-commerce retailer in its fight to recover monies withheld by PayPal, the global payment giant
News 16 Dec. 2022
Curtis Trade Team is top ranked in Chambers Asia-Pacific 2023
Event 08 May. 2023
Partner Irene Petrelli to Participate in ICC YAAF Event
News 02 May. 2023
Curtis Italy with DeA Capital in the Acquisition of Magic S.r.l
Event 23 May. 2023
Partners Luciana Ricart and Fernando Tupa Will Teach a Workshop on Hearings in Investment Arbitration for Arbanza School of Arbitration’s Online Program
Publications 23 Feb. 2023
Fernando Tupa Publishes Book on Forum-Specific Consent to International Arbitration in Investment Agreements
Event 03 May. 2023
Dr. Borzu Sabahi to Speak at ICSID-ADGM Joint Conference: Investment Protection and Armed Conflict
Event 19 Mar. 2023
Sebastiano Nessi speaks at Bahrain Business and Legal Landscape Conference
Event 01 Jun. 2023
Curtis Environmental Chair Charles Howland to Moderate Panel Discussion on Latest Developments in Environmental Due Diligence at ABA Masterclass on Environmental Transactions
News 25 May. 2023
Curtis Files SCOTUS Amicus Brief for Distinguished Law Professors in First Amendment Retaliatory Arrest Case
News 06 Mar. 2023
Russia Sanctions at the First Anniversary: An Overview of Current Sanctions in the US, UK, and EU and How Global Companies Can Navigate Evolving and Conflicting Sanctions Regimes
Client Alert 30 Aug. 2022
The EU Adopts the “Maintenance and Alignment” Sanctions Package
Client Alert 24 Jun. 2021
Update on Virtual Notarization (Executive Order 202.7) During the COVID-19 (Coronavirus) Pandemic (Updated: June 24, 2021) — U.S. Insight
Update on Virtual Witnessing (New York Executive Order 202.14) During The COVID-19 (Coronavirus) Pandemic (Updated: June 24, 2021) — U.S. Insight
Publications May 2008
Regulatory agencies are paying much closer attention to Sovereign Wealth Funds as they continue to make headlines. Concern among potential recipient countries is being raised by the increasing international investment activity of Sovereign Wealth Funds with excess liquidity.
U.S. Committee on Foreign Investments
On April 21st, the U.S. Department of the Treasury issued proposed regulations for the Committee on Foreign Investment in the United States ('CFIUS') in response to the recent increase in activity of Sovereign Wealth Funds. More recently,on May 2nd, the Treasury held a public meeting to solicit comments on the proposed regulations. The Treasury is also accepting final written comments until June 9th, 2008.
The Treasury's proposed regulations are an attempt to sharpen the mandate of CFIUS, following on the passage of the Foreign Investment and National Security Act of 2007 ('FINSA'). FINSA allows for more specific rules regarding the oversight and approval of foreign investment in the United States. FINSA provides authority for the President and, as a result, CFIUS as an executive committee, to 'review mergers, acquisitions, and takeovers by or with any foreign person which could result in foreign control of any person engaged in interstate commerce in the United States, to determine the effects of such transactions on the national security of the United States.'
Greater Discretion to Determine Control
The proposed regulations specifically address two main issues relating to CFIUS review: what types of transactions are covered, and what the proper definition of 'control' is for purposes of the review.
According to the proposed regulations, a transaction would be defined as a 'merger, acquisition, or takeover' whether proposed or already completed. In contrast, the proposed regulations define 'control' rather vaguely, as the direct or indirect power to determine or decide important matters affecting a company. Under this definition, CFIUS purports to consider all relevant factors in order to evaluate whether a foreign entity can determine or decide such important matters.
Who Should Be Concerned?
The public meeting initiated important discussions regarding potential issues with the proposed regulations. Of particular concern to Sovereign Wealth Funds is the lack of clarity regarding who must submit a transaction for CFIUS review, particularly when Sovereign Wealth Funds act as limited partners or members to domestic collective investment vehicles. Further, the lack of regulation regarding confidentiality and coordination with other branches of the government risks the possibility of disclosure of confidential information to Congress and potentially throughout the public at large.
IMF Best Practices Initiative
The Treasury regulations were issued after a flurry of activity by the International Monetary Fund ('IMF'). In October 2007, the IMF participated in a discussion with various U.S. Government officials as well as the heads of several Sovereign Wealth Funds, including China, Kuwait, Saudi Arabia, Singapore and the United Arab Emirates. The IMF, following this discussion, was given the task of identifying and clarifying a set of best-practices for Sovereign Wealth Funds.
The IMF hopes to issue final guidelines in October 2008 though no specific guidelines have yet been finalized. The IMF has released a Working Agenda for Sovereign Wealth Funds that discusses the most salient issues such as increased transparency, stronger corporate governance, and the importance of clearly established legal frameworks and structures.
Carl A. Ruggiero