DealLawyers.com Blog

Last year was action-packed when it came to developments relating to national security review of M&A. Several major transactions were scuttled due to national security concerns, and the enactment of FIRRMA and the implementation of a pilot program under the new statute dramatically enhanced CFIUS’ reach & the compliance burden that companies face.

So what’s next on the horizon? This Wilson Sonsini memo reviews CFIUS’ past & present, and provides some insights into coming attractions. This excerpt discusses the Commerce Department’s efforts to identify “emerging technologies” & the implications of that process for CFIUS review:

Most immediately, the Department of Commerce has initiated a process to designate “emerging technologies.” That process is important in the CFIUS context because “emerging technologies” is a subcategory of “critical technologies.” Foreign investments in any technology designated as an “emerging technology” (and therefore a type of “critical technology”) could trigger a mandatory CFIUS filing under the pilot program described above, and presumably under the final rules that will replace the pilot program.

The Commerce Department has requested input from the public on the effects of classifying technologies in 14 different categories, such as:

– Biotechnology
– Artificial intelligence
– Position, navigation, and timing technologies
– Microprocessor technologies
– Quantum computing
– Robotics
– Advanced materials

While this initial request for comments is only the first stage in developing a list of the “emerging technologies,” it is very likely that this process will result in far more transactions triggering mandatory CFIUS filings.

– John Jenkins