Jonathan Wakely’s commentary was included in an article appearing in the National Law Journal about a forthcoming executive order that is expected to define new guidelines for investments in countries viewed as strategic competitors. The upcoming new requirements pose a set of questions regarding the scope of the measures as well as implementation challenges for clients in various industries.
“I think what we’re seeing is an attempt at strategic decoupling,” according to Jonathan. "The administration will likely prioritize a narrow set of sectors of strategic interest including semiconductors, quantum computing and artificial intelligence. He continued, “Companies should be evaluating their business in China and potential future transactions from the perspective of how they will be viewed by U.S. national security regulators.”
“The challenge for the government will be to define those areas with enough specificity,” Jonathan stated, in order for investors to do their due diligence and figure out if a company has any activity in any of the areas under scrutiny.
One other issue for companies will be to understand how a planned investment can unintentionally trigger any prohibition transactions. “I think the administration is signaling that there will be a relatively narrow subset of prohibited transactions,” Jonathan said, while a broader category of transactions would fall under reporting rules. “That will allow the government to learn more about what investments are happening.”
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