Outbound Investment Controls Seen as Increasingly Likely
The recently revised outbound investment screening bill, proposed by a bipartisan group of lawmakers this month (see 2206140048), makes it “more likely” that new investment-related export control procedures will become law, Sidley Austin said in an alert. The firm expects new outbound investment controls to be passed as part of the expansive, bipartisan China legislation, as part of a future bill or potentially as an executive order by the White House.
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Although industry has pushed back against the notion of an outbound investment screening regime, and it remains unclear whether the legislation will be included in the final version of the China package, Sidley said companies should start preparing for the new investment guardrails. Firms should think about “how the establishment of an outbound investment review mechanism might affect their operations.” Even if the regime doesn’t become law this year, “developing workable restrictions on outbound investment activities will likely continue to receive significant attention from policymakers in the future,” the firm said last week.