Clifford Chance

The Biden Administration has once again signalled to the creation of an outbound investment review mechanism and provided federal funding to the U.S. Departments of Commerce and Treasury to consider establishing the regime. 

On December 29, 2022, President Biden signed into law the Consolidated Appropriations Act of 2023 ("Act"), a $1.7 trillion government spending package. The Act includes, among a number of additional programs and priorities for the Administration, funding for the U.S. Department of Treasury ("Treasury") and the U.S. Department of Commerce ("Commerce") to establish an outbound investment review regime to address the national security threats deriving from outbound investments from the United States.

The Act provides Commerce and Treasury with 10 million USD each to encourage the agencies to consider establishing "a program to address the national security threats emanating from outbound investments from the United States in certain sectors that are critical for U.S. national security." The Act further requires Treasury and Commerce to submit reports by February 27, 2023, describing such a program and identifying the resources required over the next three years to establish and implement it.

Although the Act includes limited details on the outbound investment review program, the new funding and reporting requirements in this Act will certainly provide more momentum for government action on outbound investments in 2023.

As we previously discussed here, the Biden Administration and Congress have signalled to the creation of an outbound investment mechanism, similar to the Committee on Foreign Investment in the United States ("CFIUS"), where US persons and entities interested in investing overseas may need to go through a "reverse CFIUS" process. The outbound investment provision in the Act indicates further congressional and executive support for legislation on outbound investment in the near future.