The Evolving Concept of National Security Around the World

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In recent years, the regulation of foreign investment under national security and foreign investment regimes has continued to grow exponentially, with sectoral coverage expanding to unprecedented levels. In the context of mergers and acquisitions, foreign investment regimes broadly fall into two categories: those that apply only to investments made directly in domestic companies and aim to give domestic businesses in certain sectors a degree of protection from foreign competition (e.g., Indonesia, Malaysia and the United Arab Emirates), and those that apply also to indirect investments (e.g., the acquisition of a foreign parent company that has a subsidiary in the jurisdiction in question).

The second type of regime, which is the focus of this chapter, tends to focus on the national security implications of foreign investments, and has historically recognised defence and critical infrastructure (e.g., energy and transport) as being fundamental to national security.

In the past decade, however, the concept of ‘national security’ has expanded to include everything from defence and critical infrastructure to artificial intelligence, communications and advanced technology sectors, healthcare, nanotechnology, the media, healthcare, food security and water, to name but a few examples. It is clear that the concept of national security has begun to drift into national interest and may continue to blur. This chapter examines this shift by looking at the evolution of foreign investment regimes in Australia, the European Union, the United Kingdom, and the United States.

Changes in the scope of foreign investment regimes

Through legislative changes to existing regimes and the creation of entirely new national screening regimes, the number and scope of foreign investment regimes have increased significantly in the past few years, transforming the concept of national security in the process.

Legislative changes

Australia: Introduction and extension of a stand-alone national security review

Prior to 1 January 2021, national security concerns were not considered on a stand-alone basis and would be assessed only when an underlying transaction was considered a notifiable or significant action in its own right. Under the assessment regime for these transactions, national security considerations were a factor in determining whether a transaction was in the national interest or not. However, the underlying policy focus expanded over time.

Significant amendments to the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA) came into effect on 1 January 2021, introducing the stand-alone concepts of a notifiable national security action and a reviewable national security action. Unlike other transactions regulated by the FATA, these concepts are not subject to any monetary threshold or other limitation.

A transaction or other activity undertaken by a foreign investor will constitute a ‘notifiable national security action’, for which approval is compulsory and suspensory when it involves the commencement of a ‘national security business’, the acquisition of a ‘direct interest’ (i.e., 10 per cent or greater) in a national security business or in an entity that carries on a national security business, or the acquisition of an interest in ‘national security land’.

The scope of the definition of ‘national security business’ captures Australian entities and businesses involved in the defence or intelligence services, telecommunications carriage service providers and entities that own or operate ‘critical infrastructure assets’. Recent amendments to the Security of Critical Infrastructure Act 2018 (Cth) (SOCIA) have expanded the definition of ‘critical infrastructure assets’. While initially only capturing the electricity, gas, water and ports sectors, the new definition includes critical service providers in each of the following industry sectors:

  • communications;
  • data storage and processing;
  • financial services and markets;
  • water and sewerage;
  • energy;
  • healthcare and medical;
  • higher education and research;
  • food and grocery;
  • space technology;
  • transport; and
  • the defence industry.

Under the January 2021 amendments, the Treasurer is also granted a broad call-in right in respect of a broader range of ‘reviewable national security actions’, which grants the Treasurer a range of powers when such actions are considered to have national security concerns (including the ability to issue divestment orders). Reviewable national security actions capture any transaction, regardless of size, that result in foreign investors acquiring or obtaining:

  • an interest of 10 per cent or more in an Australian entity;
  • a position that allows the investor to influence or participate in the central management or control of an Australian entity; or
  • a position that allows the investor to influence, participate in or determine the policy of an Australian entity.

The introduction of this concept has resulted in foreign investors being required to undertake assessments of potential national security concerns during any merger or acquisition transaction conducted in Australia.

United States: transformation of the CFIUS regime

During the past 50 years, the evolution of the concept of ‘national security’ in the United States has resulted in a significant transformation of the US government’s foreign investment regime. Although reviews of foreign investment in the United States, either direct or indirect, remain in the domain of the Committee on Foreign Investment in the United States (CFIUS), the Committee’s role in these reviews has continuously evolved, expanded and shifted to reflect the changes in US national security priorities.

The basic structure of the Committee was established in 1975 by Executive Order 11858. The founding premise of CFIUS remains the same, as it was initially designed as a mechanism within the US government’s executive branch to monitor the effects of foreign investment in the United States.[2] The Committee adopted a more active role in 1988 with the passing of the Exon-Florio amendment to the Defense Production Act of 1950 (Exon-Florio). Exon-Florio granted the US President the authority to block foreign mergers, acquisitions and takeovers that threatened US national security.[3] At this point, US national security was focused on potential effects on defence activity, with assessments of the ‘threat’ posed by the foreign investor, the ‘vulnerability’ of the US business and the consequences for national security – an assessment framework that is fundamentally still in use today.[4] The National Defense Authorization Act for Fiscal Year 1993, section 837(a) (the Byrd Amendment) further expanded the Committee’s scope to include a specific focus on threats from investments by foreign governments, including state-owned and state-controlled entities.[5]

The CFIUS regime underwent another major overhaul and expansion in the wake of the attempt by Dubai Ports World (DP World) to purchase certain US commercial port operations in 2006. As a state-owned enterprise of the United Arab Emirates (UAE), DP World’s attempted acquisition faced significant opposition from US Congress and the public, partly because of the heightened national security environment prevailing at the time.[6] Although, ultimately, DP World sold its US operations to a US owner, the aftermath of DP World’s attempted acquisitions and heightened national security concerns regarding foreign investment in the United States, led to the enactment of the Foreign Investment and National Security Act of 2007 (FINSA). FINSA overhauled the existing CFIUS regime and significantly expanded the Committee’s authority and presence. In particular, the passage of FINSA increased CFIUS reporting requirements, enabled greater congressional oversight, and mandated mitigation agreements be implemented and monitored for continued compliance.[7] FINSA also explicitly expanded the list of national security concerns relevant to a CFIUS review beyond traditional defence and military activities to include, for example, potential foreign government control, non-proliferation, counterterrorism cooperation, transhipment or diversion risks, and energy security.

After the enactment of FINSA, the focus of national security discourse gradually moved towards China and, specifically, ‘technology transfer’ – the process of acquiring advanced technologies to enhance economic and military capabilities.[8] Methods by which technology transfer is achieved includes foreign investment, venture capital investment, joint ventures, licensing agreements, cyberespionage and talent acquisition programmes. At least one report by the Defense Innovation Unit (DIU) concluded that the United States’ existing tools (e.g., CFIUS and export controls)[9] were inadequate.[10] Further, the intensity of the CFIUS process during this period began to shift, with the Committee seemingly subjecting deals involving Chinese investors to increased scrutiny. This increased scrutiny was evidenced by CFIUS reviews resulting in the US President blocking transactions involving Chinese investors in 2012,[11] 2016[12] and 2017[13] (with the latter transactions involving the semiconductor industry), all of which received significant media attention. These trends culminated in the passage of the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), which expanded CFIUS’s authority yet again and significantly changed the regulatory process itself. Among other changes, FIRRMA formally expanded the jurisdiction of CFIUS and implemented mandatory filing requirements and penalties for failing to file. The new mandatory filing requirements constituted a significant departure from the historically voluntary CFIUS notification process.[14]

FIRRMA’s implementation further reflected the evolved and expanded scope of national security in the context of foreign investment in the United States. Specifically, it included a temporary programme (the pilot programme), dedicated to reviewing foreign investments, including non-controlling investments, into critical technology entities. The pilot programme included 27 specifically enumerated industries deemed to be involved in ‘critical technologies’ and required mandatory CFIUS filings in the event of foreign investments into them.[15] The pilot programme and its mandatory filing requirement were incorporated into mainline CFIUS regulations in 2020, although ‘critical technology’ was redefined to be based on export control licensing requirements.

In addition, the United States is now implementing an outbound investment screening mechanism akin to a ‘reverse CFIUS’ process. The US government took its first step toward implementing this regime when President Biden issued an executive order in August 2023 addressing outbound US investments to ‘countries of concern’ for technologies critical to US national security.[16] The executive order specifically directed the US government to screen US investments in China, Hong Kong and Macau in three sectors: semiconductors and microelectronics, quantum information technology, and artificial intelligence. While the executive order came into effect immediately, the US Treasury Department has not yet issued implementing regulations. When the executive order is fully implemented via regulations, it will prohibit US persons – defined as a US citizen, lawful permanent resident, entity organized under the laws of the United States, and any person in the United States – from engaging in certain transactions in the abovementioned industries and require them to notify the US government of certain other transactions involving those industries. Currently, it appears this will merely involve submitting a notification, which is a significant difference from the case-specific review clearance process under the foreign investment regulations administered by CFIUS. At the same time the executive order was issued, the US Treasury also issued an Advanced Notice of Proposed Rulemaking (ANPRM), seeking public comment on the upcoming regulations’ potential definitions and scope. However, the ANPRM does not itself implement the executive order and is not a draft regulatory text. The executive order further granted the new regime enforcement powers similar to those already held by CFIUS, including the power to investigate and make requests for information from parties to covered transactions and the power to void prohibited transactions.

Moreover, various other measures to review and regulate certain outbound investments in relation to countries of concern, including China and Russia, have been proposed. These include the America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength Act (the COMPETES Act), which would establish a federal inter-agency committee, and the Committee on National Critical Capabilities (CNCC). At the time of writing, the US Congress is also debating whether to implement another ‘reverse CFIUS’ measure in an amendment to the annual National Defense Authorization Act (NDAA) that would require US investors to notify the US government of certain investments in key technology sectors in China, Russia, North Korea and Iran. While the amendment would only impose a notification requirement, not a full review process as contemplated by a full ‘reverse CFIUS’ regime, its passage would be evidence of increasing support within the US government regarding controlling outbound US investment.

To date, the NDAA is still being debated within US Congress, with a final version yet to be signed into law by President Biden, and no other ‘reverse CFIUS’ measures have been formally adopted.

United Kingdom: Legislative Implementation Of New National Security Regulations

The United Kingdom’s expansive national security regime has been in force since 4 January 2022. While the United Kingdom’s previous regime gave its government the power to review certain transactions on national security grounds and, in principle, to intervene in investments made by domestic investors, all the formal interventions under the prior regime involved foreign investments.

The National Security and Investment Act 2020 (NSI Act) invests the UK government with wide powers to call in and review investments on national security grounds and to impose any remedies it deems necessary. In the period between 1 April 2022 and 31 March 2023, the UK government reviewed a staggering 866 notifications. However, in contrast to the large number of filings made in this period, which reflects the regime’s expansiveness, the UK government only took enforcement action against 15 transactions.

The NSI Act imposes mandatory filing obligations for qualifying investments in target companies with specific activities in any of the following 17 sensitive sectors:

  • civil nuclear;
  • communications;
  • data infrastructure;
  • defence;
  • energy;
  • transport;
  • artificial intelligence;
  • advanced robotics;
  • computing hardware;
  • cryptographic authentication;
  • advanced materials;
  • quantum technologies;
  • synthetic biology;
  • critical suppliers to government;
  • suppliers to the emergency services;
  • military or dual-use technologies; and
  • satellite and space technologies.

All other qualifying investments are subject to a voluntary filing regime and, if the government considers it appropriate, the government reserves the power to call in unnotified qualifying investments. Transactions in any sector can be reviewed under the voluntary regime, but there is a higher risk of a national security intervention if the target has activities that are within, or closely linked to, a sector listed above. Investments in real estate that is used for sensitive activities, or is proximate to such sites, also carry a higher risk of being subject to a government investigation.

The concept of ‘national security’ has significantly expanded in the United Kingdom in recent years, even before the NSI Act entered into force, from focussing on deals withing the defence sector to investments in a much wider range of sectors, including energy (e.g, Electricity North West, XRE Alpha Limited), internet connectivity (e.g., Upp) and semiconductors (e.g., Newport Wafer and HiLight). Moreover, a range of international investors have been caught, including those from China, the United States and France. Importantly, and demonstrative of the NSI Act’s neutrality towards countries, to date investors who are UK nationals have faced the second-highest number of interventions.

Between 1 April 2022 and 11 September 2023, 17 transactions were subject to government interventions, including five that were blocked.

Nexperia/Newport Wafer Fab

On 16 November 2022, the UK government ordered Nexperia BV and Nexperia Newport Limited to divest the combined 86 per cent shareholding they had acquired in Newport Wafer Fab in 2021. The subsidiaries of Nexperia – a Dutch firm that is ultimately owned by Wingtech Technology, a partially state-owned Chinese company – originally held 14 per cent of shares in the UK semiconductor fabrication plant.

In a Notice of Final Order, the UK Secretary of State for Business, Energy and Industrial Strategy stated that the technology and know-how that could result from the reintroduction of compound semiconductor activities at the Newport Wafer Fab site could undermine UK national security capabilities. Moreover, the location of the Newport Wafer Fab site could facilitate access to technological expertise and know-how within the South Wales Industrial Cluster (SWIC), and the links between the Newport and the SWIC could prevent entities based in the SWIC from engaging in future projects relevant to national security. This order is one of a number issued against China-affiliated companies – four of the five transactions that have been blocked between April 2022 and September 2023 involved investors with connections to China – and that relate to transactions within the semiconductor industry.

LetterOne/Upp Corporation

On 19 December 2022, the UK government ordered LetterOne to divest holdings in Upp Corporation, a London-based telecommunications and internet provider, and for Upp to complete a security audit of its network prior to its sale to LetterOne.

LetterOne was co-founded by Russian investors.

EDF/GE Steam Power

On 7 August 2023, the UK government imposed conditions upon EDF, EDF’s subsidiary GEAST UK and GE in connection with EDF’s acquisition of GE’s nuclear turbine business, GE Steam Power.

The national security concerns identified related to naval propulsion systems that delivered by GE Steam Power, which were considered to be critical to the UK’s national security and defence capabilities.

Future UK government actions

With respect to the themes that may be drawn from these investments, it is evident that the UK government will closely examine investments by companies affiliated with countries that may be considered ‘hostile’. However, even acquirers from countries that are considered ‘friendly’, and even those with long track records of investing in UK critical infrastructure, may still be subject to interventions under the NSI Act if the target’s activities are considered to be critical to national security.

Accordingly, it seems that the UK government continues to follow a fairly established approach to enforcing its national security powers, with a continued focus on the defence sector and dual-use products with defence sector applications, with overseas purchasers – often those from China – attracting the most scrutiny.

European Union: Coordination and evolution of national security

Regulation (EU) 2019/452 (the FDI Screening Regulation) entered into force on 10 April 2019 and applied to transactions that took place as of 11 October 2020. The Regulation does not replace the national screening regimes of EU Member States, which retain ultimate control over investments in their territories; rather, it supplements national regimes by introducing a cooperation mechanism between EU Member States. However, it also allows the European Commission to review and opine on[17] investments that are likely to affect the security or public order of more than one Member State, or could undermine projects of interest to the whole European Union (eg, EU programmes for energy, transport and telecommunications networks).

While the Regulation does not require Member States to establish national screening mechanisms, the European Commission continues to encourage Member States, both at the political and technical level, to adopt, adapt and implement such mechanisms.

The Regulation requires EU Member States to provide certain information to the European Commission, and other Member States, of any foreign investment in their territory that is being screened. This information includes details of the investor or investment vehicle, and the Member States in which the investor conducts business, and may include a list of Member States the security or public order of which is deemed likely to be affected. In addition, the European Commission and Member States may request information and provide comment on such investments that the relevant member is not screening, but that the European Commission, or other Member State, considers will likely have an effect on security or public order.

Scope of the FDI Screening Regulation

No monetary thresholds apply under the FDI Screening Regulation.

Furthermore, the Regulation only sets out a non-exhaustive list of factors that can be applied by EU Member States or the European Commission to determine whether an investment could affect security or public order (article 4). These factors include:

  • Critical infrastructure, whether physical or virtual, including:
    • energy;
    • transport;
    • water;
    • health;
    • communications;
    • media;
    • data processing or storage;
    • aerospace;
    • defence;
    • electoral or financial infrastructure;
    • sensitive facilities; and
    • land and real estate crucial for the use of such infrastructure.
  • Critical technologies and dual-use items as defined in Council Regulation (EC) No. 428/2009, article 2, point 1,[18] including:
    • artificial intelligence;
    • robotics;
    • semiconductors;
    • cybersecurity;
    • aerospace;
    • defence;
    • energy storage;
    • quantum and nuclear technologies;
    • nanotechnologies; and
    • biotechnologies.
  • The supply of critical inputs (including energy and raw materials);
  • Food security.
  • Access to, and the ability to control, sensitive information (including personal data).
  • The freedom and pluralism of the media.

Looking at this list, it is evident that a wide array of sectors fall within the EU’s national security concerns, and there is scope for further expansion.

Interaction with national screening regimes aimed at guiding the concept of national security

Prior to the introduction of the FDI Screening Regulation, the primary mechanism for foreign investment screening within the EU lay firmly with national authorities. Although national regimes continue to take precedence over the powers of the European Commission and other Member States under the Regulation (the host Member State for the investment has the ultimate say in deciding whether to allow or block the investment), the scope and severity of foreign investment scrutiny varies across EU Member States.

At the time of writing, 20 EU Member States[19] have some form of investment screening mechanisms in place, six[20] are considering implementing such measures, and only one[21] does not have an FDI screening regime and does not plan to implement one. Nevertheless, the Regulation allows all EU Member States to participate in some level of investment screening across the whole bloc.

Following the covid-19 pandemic policymaking trend to protect a growing list of key domestic sectors (e.g., healthcare, energy and transport), a number of EU Member States are revisiting and strengthening their national investment screening regimes. Many governments viewed the pandemic as an opportunity to shield strategic industries from opportunistic foreign investors, allowing the notion of ‘national security’ to be interpreted more broadly.

In addition, some EU Member States, such as France, Germany, Italy and Spain, introduced more stringent controls on foreign investment in the wake of the pandemic; initially, many did this as a temporary measure. In France, the government broadened the scope of its foreign investment control regime and lowered the threshold for screening non-EU investments in listed French companies to 10 per cent until 31 December 2023. Italy introduced new notification requirements for EU investors in sensitive sectors acquiring control and for non-EU investors acquiring 10 per cent or more of strategic entities. Spain now requires residents of EU Member States and the European Free Trade Association (EFTA) to obtain authorisation for certain investments (transitorily until 31 December 2024), in addition to the authorisation requirement for non-EU/EFTA residents. Germany added 16 industries and certain types of transactions to the scope of its national foreign direct investment screening regime, which is currently being evaluated and is expected to undergo a significant reform in the course of 2024.

The outlook for such stringent national regulation of foreign direct investment beyond 2023 is unclear, although, given recent political trends, it is unlikely that governments will wish to relinquish their grips on key sectors of the economy to protect their national interests. As a matter of fact, Russia’s military aggression against Ukraine calls for greater vigilance towards direct investment within the European Union from Russia and Belarus. As a response, in April 2022, the European Commission adopted the ‘Guidance to the Member States concerning foreign direct investment from Russia and Belarus’ (Document 52022XC0406(08)), to ensure attention is given to investments in critical EU assets by entities or persons related to the governments of Russia and Belarus.[22]

Concept of national security under institutional guidance

European Union

In conjunction with revised and new legislation, the European Commission and the national screening authorities of EU Member States released detailed guidance providing market participants with descriptions of industry sectors and activities considered relevant to national security assessments.

For example, on 1 September 2022, the European Commission published its second annual report on the screening of foreign direct investments into the European Union.[23] This report, the first to cover an entire calendar year (2021), showed that the use of screening mechanisms significantly expanded in 2021. The European Commission took the opportunity to reflect on the concept of national security, and highlighted that only 1 per cent of transactions were blocked by EU Member States (compared with 2 per cent in the first report)[24], indicating that Member States only blocked transactions that posed very serious threats to security and public order.

The FDI Screening Regulation is currently undergoing an evaluation process and is subject to a targeted consultation. The European Commission is expected to provide a report to the European Parliament and European Council on the Regulation’s functioning and effectiveness by 12 October 2023.

Australia

The Foreign Investment Review Board (FIRB) released a detailed guidance note that provided market participants with clear descriptions of the industry sectors and activities that FIRB considered relevant to any national security assessment. The guidance provided a breakdown of the subsectors and activities subject to mandatory or recommended approvals. These include:

  • financial services;
  • communication networks and infrastructure;
  • certain commercial construction contractors;
  • commercial real estate;
  • critical minerals, service providers, suppliers and technologies;
  • defence providers;
  • energy;
  • healthcare and medical sectors;
  • information technology;
  • data centres;
  • space technology;
  • public transport;
  • ports; and
  • water.

United States

The evolving and expanding concept of national security is clearly reflected in the evolution and empowerment of CFIUS as the reviewer of foreign investment within the United States. In the past 20 years alone, critical technologies, critical infrastructure, personal data and real estate have been formally acknowledged as areas of potential concern regarding national security. Further, the formerly voluntary CFIUS process now has a significant mandatory element, failing to comply to which carries penalties. Non-controlling investments now fall within CFIUS’s jurisdiction and can even trigger a mandatory review. The role and power of CFIUS will likely only continue to grow as national security concerns evolve further.

Conclusion

It is clear that the past six years have brought about significant changes in the approach to national security globally. A number of geopolitical concerns have arisen, in particular between China and the West, prompting several major Western economies to rethink the level of protection given to their domestically important industries. These concerns have been exacerbated by the effects of the covid-19 pandemic and Russia’s invasion of Ukraine, which have prompted fears about the supply of essential goods, energy and services, while large parts of the economy ground to a halt in the wake of far-reaching lockdowns and restrictions on movement.

Given the additional anticipated stresses of climate change and related geopolitical changes, there is no doubt that governments are preparing to cushion the economy as far as possible against the effects of future pandemics, and other financial or environmental shocks. The effect of these actions on global investment is yet to fully take shape and so deserves close monitoring. Although parallels can be drawn with certain other regulatory activities, such as merger control, foreign investment regimes are notoriously less transparent, with governments enjoying greater degree of discretion, less stringent time limits for decision-making, and less regard for following precedents. So, it may be that the evolution of ‘national security’ into a chameleon-like concept has only just begun.


Notes

1 Dimitri Slobodenjuk, Jennifer Storey, Mark Currell and Renée Latour are partners at Clifford Chance.

2 James K Jackson, The Committee on Foreign Investment in the United States, Congressional Research Service, 1, 5 (2020), https://sgp.fas.org/crs/natsec/RL33388.pdf.

3 Id. at 7; 50 U.S.C. app. § 2170 (1988).

4 31 C.F.R. § 800.102.

5 P.L. 102–484, 23 October 1992.

6 Jonathan Weisman and Bradley Graham, ‘Dubai Firm to Sell U.S. Port Operations’, The Washington Post (10 March 2006), p. A1.

7 P.L.110–49, 121 Stat. 246.

8 Senator John Cornyn, one of the authors and sponsors of the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), speaks on this issue and how the 2017 version of the Defense Innovation Unit Experimental (DIUx) report influenced the earlier versions of the bill’s text. See also Kate O’Keeffe and Siobhan Hughes, ‘Congress to Toughen Foreign Investment Reviews Amid Trade Fight With China’, Wall Street Journal (19 July 2018), www.wsj.com/articles/congress-to-step-up-curbs-on-chinese-deals-with-sweeping-changes-to-u-s-foreign-investment-reviews-1532025093.

9 The United States’ export control framework consists primarily of the International Traffic in Arms Regulations, which control defence articles, defence services and technical data, and the Export Administration Regulations, which control dual-use goods and technology – most commercial items.

10 Michael Brown and Pavneet Singh, ‘China’s Technology Transfer Strategy: How Chinese Investments in Emerging Technology Enable A Strategic Competitor to Access the Crown Jewels of U.S. Innovation’, DIUx (2018), 3–4, https://admin.govexec.com/media/diux_chinatechnologytransferstudy_jan_2018_(1).pdf; David Hanke, Senator Cornyn’s lead staffer in the drafting process, states that the DIUx report became ‘one of the analytical underpinnings of the FIRRMA initiative’; David R Hanke, ‘Testimony before the US–China Economic and Security Review Commission’, Hearing on US–China Relations in 2021: Emerging Risks. Panel III: Assessing Export Controls and Foreign Investment Review (8 September 2021), at 6, www.uscc.gov/sites/default/files/2021-08/David_Hanke_Testimony.pdf.

11 Statement from the US Treasury Department on the President’s Decision Regarding Ralls Corporation (28 September 2012), www.treasury.gov/press-center/press-releases/Pages/tg1724.aspx.

12 Statement on the President’s Decision Regarding the US Business of Aixtron SE (2 December 2016), www.treasury.gov/press-center/press-releases/Pages/jl0679.aspx.

13 Statement on the President’s Decision Regarding Lattice Semiconductor Corporation (13 September 2017), www.treasury.gov/press-center/press-releases/Pages/sm0157.aspx.

14 Federal Register, Vol. 83 No. 197 (11 October 2018), p. 51322.

15 31 CFR. § 800.401.

16 Proclamation No. 14105, 88 Fed. Reg. 54867.

17 The European Commission cannot itself prohibit transactions or impose remedies; but, for certain investments, EU Member States must take ‘utmost account’ of the Commission’s opinions.

18 Council Regulation (EC) No. 428/2009 of 5 May 2009 setting up a European Community regime for the control of exports, transfer, brokering and transit of dual-use items (OJ L 134 29.5.2009, p. 1).

19 Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Italy, Latvia, Lithuania, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia and Spain.

20 Bulgaria, Croatia, Greece, Luxembourg and Sweden. With respect to Ireland, on 2 August 2022, the Irish Department of Enterprise, Trade and Employment published the ‘Screening of Third Country Transactions Bill 2022’, which is expected to be enacted in 2023.

21 Cyprus.

22 Communication from the Commission – Guidance to the Member States concerning foreign direct investment from Russia and Belarus in view of the military aggression against Ukraine and the restrictive measures laid down in recent Council Regulations on sanctions, OJEU C 151 I, 6.4.2022, pp. 1–12.

23 Second Annual Report on the screening of foreign direct investments into the European Union, COM(2022)433, 1 September 2022.

24 The first annual report covered a shorter period, between 11 October 2020 and 30 June 2021.

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