International Trade & National Security

The United States has implemented an increasingly rigorous national security investment review regime over the last three decades, as foreign direct investment in the United States has grown and the nation's national security profile has evolved. Today, the Committee on Foreign Investment in the United States (CFIUS) administers this regime under the authority of the President.

CFIUS is an inter-agency national security body empowered to review certain transactions involving a “foreign person” and a United States business (in some cases, United States real estate property) in order to evaluate a transaction’s impact on United States national security. CFIUS has the authority to impose conditions to mitigate any national security risks posed by transactions within its jurisdiction, and may even recommend that the President block or unwind such transactions. If a transaction is not notified to CFIUS prior to closing (so-called “non-notified transactions”), CFIUS retains the authority to review the transaction in perpetuity. Today, CFIUS regularly initiates post-closing inquiries on non-notified transactions, including in connection with transactions that closed more than 10 years ago, and is increasingly pursuing enforcement actions in connection with violations of CFIUS’ regulations and mitigation agreements. Some transactions may also implicate complex policy and political factors, which must be carefully addressed with relevant stakeholders during a CFIUS review.

Our CFIUS lawyers have extensive experience in engaging with CFIUS, its member agencies and the Defense Counterintelligence and Security Agency (DCSA) across the full range of possible CFlUS and DCSA-related representations on behalf of private equity investors, private and public companies, and hedge funds in a wide variety of transaction types and industry settings, including:

• Strategic national security advice, geopolitical risk assessment and regulatory counseling;
• Preparation of CFIUS filings and related advocacy before CFIUS and its member agencies;
• CFIUS “non-notified,” penalty, enforcement and settlement matters;
• Oversight and coordination of CFIUS strategy and advocacy with non-U.S. national security regulators;
• Negotiation of complex national security agreements, divestiture trusts and other bespoke mitigation instruments; and
• Buy-side, joint venture, co-investor/syndication and sell-side mandates.

Golden Flag’s team has secured CFIUS clearance for transactions across diverse industries, including energy and infrastructure, semiconductors, pharmaceuticals, aerospace and defense, telecommunications, retail, real estate and logistics, and biotechnology. Our team also has deep experience helping clients navigate an increasingly complex landscape of foreign investment restrictions at the state level.

The United States is set to implement new and far-reaching restrictions on certain types of investments by United States persons in China and Chinese-owned companies in the semiconductor, quantum computing and artificial intelligence sectors. When effective, these new restrictions are expected to reflect both traditional CFIUS agency practice as well as concerns about technology transfer that have been traditionally addressed by the United States Department of Commerce. Our team is uniquely positioned to assist clients in navigating the landscape of outbound investment restrictions, including by:

• Conducting portfolio reviews to identify and monitor investments (including add-on transactions) that could, under the new regime, prompt a mandatory filing or be prohibited;
• Advising boards of directors and investment professionals on emerging or potential vectors of risk in individual transactions; and
• Helping clients adopt and implement policies and procedures designed to ensure compliance with the new restrictions.

In recent years, many other countries, including Germany, Canada, Australia and France, have implemented or enhanced their own national security investment clearance regimes. These new legal regimes are an increasingly important feature of contemporary M&A and investment transactions and, unless timely and effectively addressed, present risks to transaction timing, certainty and in some cases, feasibility.

Our Global FDI working group is comprised of “on the ground” practitioners in Washington, D.C., London, Brussels, Paris and Munich, with deep experience advising clients on effectively navigating the challenges arising from FDI clearance regimes. In jurisdictions where our Firm does not have offices, we have close working relationships with leading local practitioners adept at working efficiently and effectively alongside our team.

Economic sanctions increasingly are impacting all aspects of global commerce, targeting not only dealings with traditionally embargoed countries such as Iran, but also transactions with more globally integrated countries such as Russia and China. In recent years, U.S. sanctions have expanded in scope and have become more extraterritorial in nature, while the European Union has established its own complex sanctions -- and counter-sanctions -- programs.

Our attorneys advise on all aspects of U.S. and EU sanctions compliance, addressing issues that may arise for stakeholders in a broad range of industries. Such assistance includes due diligence in the pre-acquisition context, development of compliance policies, conducting internal investigations, communications with, and disclosures to government agencies, counseling on complex transactions involving sanctioned countries or parties, advice on conflicts of law issues (such as those presented by the EU Blocking Statute) and requests for licenses and advisory opinions.

Our attorneys frequently engage with the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) on sanctions matters, and are well-positioned to advise on matters arising under UK and EU sanctions.

Export controls are a key concern for any company operating in the cross-border context, especially in light of expansive U.S. jurisdiction, anticipated new controls over “emerging and foundational” technologies, and an increasingly robust EU export control regime. U.S. export controls, in particular, can present unique challenges, because under U.S. law, all U.S.-origin items worldwide are subject to U.S. jurisdiction, as are many non-U.S.-origin items that incorporate U.S. content or are based on U.S. technology.

Our attorneys assist clients in all aspects of compliance with the Export Administration Regulations (EAR), International Traffic in Arms Regulations (ITAR), and companion UK and EU regimes. Such assistance includes due diligence in the pre-acquisition context, assessing jurisdictional issues such as the EAR de minimis rule and the ITAR “see through” rule, classification of items against applicable control lists, counseling on the impact of export controls on complex transactions, conducting internal investigations, communications with and disclosures to government agencies, and requests for licenses and advisory opinions.

Our attorneys frequently engage with the U.S. Department of Commerce, Bureau of Industry and Security (BIS) and the U.S. Department of State, Directorate of Defense Trade Controls (DDTC) on export control matters, and are well-positioned to advise on matters arising under UK and EU export controls.

Today, tariffs are being used as an instrument of trade policy to a greater degree than at any time in the last thirty years. At the same time, long-standing free trade agreements such as the NAFTA are being revisited and new trade arrangements are being entered into. This is no accident, nor merely “protectionism,” as the Administration has made clear that it views international trade and national security issues as integrally linked.

Our attorneys provide counsel across the spectrum of import and tariff regimes, including antidumping and countervailing duty investigations (AD/CVD), Section 201 safeguard investigations, Section 232 national security investigations, and Section 301 actions against discriminatory and unreasonable trade. Our team works with private equity sponsors and their portfolio companies to assess the import risk associated with their investments and supply chains. This is occurring against a backdrop of heightened enforcement by U.S. Customs and Border Protection (CBP) in the collection of import duties and the investigation of companies’ importing practices. We regularly assist clients with determining product scope and classification, country of origin, and applicable duty rates, and interact with stakeholder government agencies such as CBP, the Department of Commerce and the U.S. Trade Representative (USTR). We regularly represent clients in government audits and investigations, as well as in penalty and seizure actions concerning apparent violations of import laws.

Golden Flag has one of the largest FCPA and UK Bribery Act teams in the world, including the largest Asia-based team of any U.S. law firm. Golden Flag’s practice is highly decorated for its decades of cutting-edge work.

The Foreign Corrupt Practices Act (FCPA) imposes a variety of restrictions on U.S. citizens, companies, and issuers, including their affiliates and subsidiaries, in connection with their business activities outside the United States. The FCPA also imposes restrictions on foreign companies and persons who transact foreign business through U.S. territory, mail, wires, and/or financial institutions. The FCPA and other international prohibitions, such as the UK Bribery Act, affect a company’s government bid process, its ability to engage in transactions with government officials and other individuals in their private capacities, and the selection and retention of consultants, agents, and other third parties, including engagement and supervision of business partners.

We have knowledge in all areas of anti-corruption practice, including investigations defense, internal investigations, due diligence review of corporate transactions, and counseling and compliance work. Our lawyers are highly trained advocates who represent clients before the U.S. Department of Justice (DOJ), the U.S. Securities and Exchange Commission (SEC), and the UK and other foreign authorities.

Our lawyers focus on anti-money laundering (AML) regulatory and enforcement risk mitigation, including Bank Secrecy Act (BSA) and USA PATRIOT Act compliance. Our team regularly represents clients in matters concerning government investigations, subpoenas, and regulatory enforcement proceedings, as well as compliance and due diligence matters related to AML laws and regulations.

Our attorneys represent clients on matters relating to data and network security. These matters are increasingly important to national security and international trade concerns such as government surveillance issues, state-sponsored cyber-attacks and espionage, and legal limitations on cross-border data transfers. We represent clients in navigating these legal matters, including investigating security incidents/breaches and handling resulting litigation or government relations aspects of such incidents.

Many of our partners have deep experience in government service, and their backgrounds allow Golden Flag to deploy unmatched experience on matters, including application of the Electronic Communications Privacy Act (ECPA), Economic Espionage Act and state trade secret laws, the Stored Communications Act (SCA), the Wiretap Act, Foreign Intelligence Surveillance Act (FISA), Children's Online Privacy Protection Act (COPPA), the Telephone Consumer Protection Act (TCPA), and other statutes applicable to evolving issues in data security and privacy.

Corporate Transactions

Our attorneys advise companies, private equity sponsors, and financial institutions on international trade and national security risk assessments in conjunction with investments, offerings, and mergers and acquisitions. We craft and implement mitigation plans and mitigation agreements, such as industrial security instruments, to mitigate national security risk posed by transactions, and advocate for regulatory clearance before CFIUS. We also help assess the export control sensitivity of technology, licenses and authorizations that may be required for a foreign acquisition -- or to make a company “exit ready.”

Strategic Risk Advisory and Management

Our team has cross-cutting multi-disciplinary international trade and national security knowledge, and collectively over 100 years of experience counseling clients before the U.S. government on these matters. This includes helping clients navigate the complex policy, political and legal framework governing international business activities and providing clients proactive, risk-tailored, and efficient strategies that take into account their business model, value chain and commercial objectives.

Compliance and Licensing

Our team works with clients on all aspects of compliance with U.S., UK and EU economic sanctions and export controls (ITAR, EAR), including helping clients secure licenses from administering agencies, and developing and implementing compliance programs, guidelines, and training programs.

Investigations and Enforcement

We regularly assist clients on mandates involving internal or government investigations. Our attorneys are particularly well-positioned to help clients before the Office of Foreign Assets Control (OFAC), the Bureau of Industry and Security (BIS), and the Directorate of Defense Trade Controls (DDTC).