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Janine Slade

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Drawing upon her experience at the U.S. Department of Homeland Security (DHS), Janine Slade advises clients on the U.S. national security review process administered by the Committee on Foreign Investment in the United States (CFIUS) and related reviews conducted by the interagency working group known as “Team Telecom.”

Ms. Slade served in a number of roles during her nearly 10-year tenure at DHS, including as Deputy Director, Foreign Investment Risk Management, and as an Attorney Advisor in the Office of the General Counsel. She advised Department leadership and component offices on matters relating to CFIUS and Team Telecom, assisted with compliance oversight of CFIUS national security agreements, and negotiated national security risk mitigation measures with corporate counsel for companies under review and investigation by CFIUS and Team Telecom. She also provided technical assistance to congressional staff and the CFIUS chair on Foreign Investment Risk Reduction & Modernization Act (FIRRMA) statutory reform and accompanying regulatory reform efforts.

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May 23, 2023, Covington Alert

The U.S. Department of the Treasury (“Treasury”), in its capacity as chair of the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”), recently posted two new frequently asked questions (“FAQs”) to CFIUS’s website that have important implications for parties planning transactions subject to the Committee’s jurisdiction.

First, CFIUS confirmed its recent practice of requiring detailed information on all direct or indirect foreign ownership involved in a transaction, including disclosure of all limited partners (or “LPs”) of an investment fund, without regard to any pre-existing agreements between the fund sponsor and investor regarding disclosure.

Second, CFIUS offered guidance regarding the meaning of “completion date” for purposes of when a mandatory filing must be submitted for a multi-stage transaction. The guidance could have broad implications, especially for some venture financing transactions, as it introduces uncertainty regarding the ability of investors to use a staged transaction to acquire an initial, passive equity interest prior to submitting a mandatory CFIUS filing with respect to a subsequent acquisition of control or certain non-passive rights. The new guidance seems at odds with language that appears in the preamble to the regulations implementing the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”), and the practice of transaction parties for the last several years. CFIUS did not provide any explanation for this change, which raises questions as to why the Committee has issued the guidance now.

Each of these developments is discussed in more detail below.

1. CFIUS may require detailed information regarding all foreign persons involved directly or indirectly in a transaction, including limited partners in an investment fund.

Treasury published the following FAQ on May 11:

Does CFIUS require information on all foreign persons, such as limited partners in an investment fund, that would hold an interest in a U.S. business, whether directly or indirectly, as part of the transaction?…

Continue Reading CFIUS Issues Guidance On Disclosure of Information About Limited Partner Investors and Application of Mandatory Filing Rules to Multi-stage Transactions