The U.S. government introduced regulatory measures to control sensitive goods and technology transfers domestically and abroad, particularly addressing concerns about China. Two new legislative frameworks drive these changes: the Foreign Investment Risk Modernization Act (FIRRMA) and the Export Control Reform Act (ECRA).

FIRRMA expands the Committee on Foreign Investment in the United States (CFIUS) authority to examine transactions beyond corporate acquisitions. ECRA grants regulatory power over commodities, technology, and their domestic transfers and foreign applications.

Key CFIUS Monitoring Areas

• Non-U.S. acquirers of critical technology
• Foreign minority partners in U.S. joint ventures
• Foreign investment in U.S. venture capital funds
• Technology sales, licenses, or exports to foreign companies

Critical technology, infrastructure, real estate, and bankruptcy transactions now fall under automatic CFIUS jurisdiction. Parties should anticipate heightened scrutiny of Chinese acquisitions of American tech companies, elevated transaction costs and legal fees, extended closing timelines, and forthcoming regulatory rules affecting future deals.