The Committee on Foreign Investment in the U.S. is adding staff and becoming more active amid growing concern about China, Dechert said in a client alert.

U.S. Steel Corp. and Japan’s Nippon Steel Corp., which recently agreed to a merger, plan to ask the Committee on Foreign Investment in the U.S. to review their proposed deal, U.S. Steel said on Dec. 21.

At least seven Democratic and Republican lawmakers are urging the Committee on Foreign Investment in the U.S. to oppose or scrutinize the proposed acquisition of U.S. Steel Corp by Japan-based Nippon Steel Corp., saying the $14.9 billion deal raises serious economic and national security concerns.

Israel-based Nice and U.S.-based LiveVox Holdings, two software and technology companies that provide artificial intelligence-related products, submitted a voluntary filing with the Committee on Foreign Investment in the U.S. ahead of their proposed combination, Squire Patton said in a November client alert. In an SEC filing, the companies said CFIUS must approve their transaction before it can be completed.

Eighteen U.S. outbound investment deals in China were announced through the first three quarters of 2023, down 10% from the same period last year and about 75% compared with 2021, White & Case said in a November client alert. The firm said global investment flows are increasingly rerouting to Southeast Asian countries instead of China, such as Vietnam, Indonesia and Thailand, while U.S. investors are specifically choosing to target South Korea and Japan. Through the first three quarters of this year, U.S. dealmakers have targeted 16 South Korean and 23 Japanese assets, the first time since 2016 that the number of U.S. investments in Japan has surpassed those in China, the firm said.

President Joe Biden this week extended a national emergency that authorizes a ban on certain U.S. investments in Chinese military companies. Biden in 2021 expanded the ban, first issued during the Trump administration, by widening the scope of the restrictions to cover companies operating in China’s surveillance technology sector (see 2106030067).

The reporting requirements being considered by the Treasury Department as part of its upcoming outbound investment rules (see 2308090066 and 2310050035) are "quite broad,” Akin Gump lawyer Laura Black said, adding that they will require companies to report on how certain investments fit into their business plans in the U.S. as well as the contractual and government relationships held by their Chinese clients. Black, speaking during an Oct. 25 webinar hosted by the Massachusetts Export Center, said those requirements could increase compliance costs for U.S. companies and create challenges for their Chinese partners, who are subject to strict disclosure laws by the Chinese government.