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Covington has a leading practice advising clients on national security reviews of foreign direct investment -- often referred to as “Exon-Florio” reviews -- administered by the Committee on Foreign Investment in the United States (“CFIUS”). We also represent clients before Congress on policy matters related to foreign direct investment and national security. A number of our senior lawyers held key decision-making positions within CFIUS agencies during their government service.
Covington has broad experience representing international and domestic clients before the economic and security agencies comprising CFIUS. These representations often involve high-stakes commercial investments that present myriad issues ranging from cutting-edge technology transfers to defense and homeland security contracting to novel compliance matters. Our work has included negotiating the national security agreement that now is widely recognized as the template for approval of foreign investments in telecommunications providers; drafting special security agreements, proxy agreements and other corporate arrangements required to mitigate foreign ownership and control over sensitive information or classified contracts; counseling potential investors and conducting CFIUS-related due diligence; assisting in on-site inspections and examinations of client facilities and networks by law enforcement and intelligence agencies; and drafting and implementing detailed compliance plans for clients following agreements with CFIUS. Covington is frequently called upon for the most complex and difficult CFIUS reviews; we have been involved in four second-stage “investigations” of transactions in the past three years.
Many of our representations also have public components or present political challenges. We have worked with clients in the highest pressure environments to execute and deliver faithfully on political and public relations strategies that secure the clients’ public interests while preserving the confidentiality of, and achieving success in, the CFIUS process. We also have represented industry in the on-going negotiations on Capitol Hill to reform the Exon-Florio provisions and our partner Stuart Eizenstat has testified before Congress on numerous occasions on the CFIUS process. Finally, we have provided advice to various foreign governments on the development and implementation of national security review processes and have made presentations to various multilateral fora on the subject, including the Organization for Economic Cooperation and Development in Paris.
Representative Matters
- Global Crossing - Acquisition of Global Crossing by Singapore Technologies Telemedia (and an earlier phase involving Hutchison Whampoa).
- IBM - Sale of its personal computer division to Lenovo.
- British Telecommunications plc - Acquisition of Infonet Services Corporation.
- Check Point - Proposed acquisition of Sourcefire.
- Vodafone - Due diligence advice in connection with its bid for AT&T Wireless.
- Investment banks - Advice to multiple New York- and London-based investment banks on a number of transactions involving Exon-Florio review.
Accolades
- Numerous print and broadcast media have recognized our lawyers as leading experts in the field of CFIUS practice.
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