The Foreign Investment Risk Review Modernisation Act (FIRRMA) comes into effect today, enabling greater regulations on foreign investment in the
The Foreign Investment Risk Review Modernisation Act (FIRRMA) comes into effect today, enabling greater regulations on foreign investment in the United States.
Passed this summer, FIRRMA brings a number of reforms to the Committee on Foreign Investment in the US (CFIUS), an interagency body that supervises foreign investment. The law instructs CFIUS to add national security criteria when reviewing investments, as well as broadening the scope of transactions falling under its remit.
The reforms will factor most immediately into President Trump’s trade war with China, which likely drove the White House to accelerate the law’s implementation. Having already scuttled a $1.2 billion dollar deal for a Chinese firm to buy MoneyGram, a US electronic payment company, earlier this year, CFIUS will almost certainly use its broadened authority to shut down more Chinese transactions.
Expect CFIUS to take action against China in sectors under its expanded scope, such as in real estate and ownership rights of US businesses, putting further pressure on Beijing to accede in the trade spat. Even though FIRRMA increases congressional oversight of CFIUS, trade war-sceptics will likely approve of the curbing of Chinese influence in the US.
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