The Impact of Sovereign Wealth Funds on the Regulation of Foreign Direct Investment in Strategic Industries: A Comparative View

10 Bus.L.Intl. No. 1, 2009

14 Pages Posted: 7 Nov 2015

See all articles by Maya Steinitz

Maya Steinitz

University of Iowa - College of Law; University of California, Berkeley - Berkeley Center on Comparative Equality & Anti-Discrimination Law

Michael Ingrassia

Independent

Date Written: November 3, 2006

Abstract

Investments by sovereign wealth funds ('SWFs') - pools of capital accumulated by and under the control of sovereign states, mostly from the Persian Gulf and East Asia - in European and North American companies have changed dramatically both in scope and in nature in the last few years. This article examines the screening mechanisms in place, recently changed, or currently under consideration by the United States, France and India. While by no means an exhaustive or even representative survey, this sample highlights how different jurisdictions apply varying degrees of scrutiny to FDI in an age of increased sovereign-directed investments. As such, it illustrates some of the key issues an investor and its advisers may wish to examine when contemplating a potentially sensitive investment such as the role of the executive in the review, the availability of judicial review in national or transnational courts, the definition of key concepts such as foreign investment/investor, and the sectors regarded as sensitive. For each jurisdiction, the article examines: (1) the governing law and recent changes thereto; (2) the screening mechanisms including (i) the composition of the review body, (ii) key concepts such as 'foreign investment', (iii) the industries subject to review, and (iv) review timelines and other key features of the review process; and (3) notable recent deals or public controversies.

Keywords: sovereign wealt funds, private equity, FDI, foreign direct investment, CFIUS, Mergers and Acquisitions, The Committee on Foreign Investment in the United States

Suggested Citation

Steinitz, Maya and Ingrassia, Michael, The Impact of Sovereign Wealth Funds on the Regulation of Foreign Direct Investment in Strategic Industries: A Comparative View (November 3, 2006). 10 Bus.L.Intl. No. 1, 2009 , Available at SSRN: https://ssrn.com/abstract=2685934

Maya Steinitz (Contact Author)

University of Iowa - College of Law ( email )

Melrose and Byington
Iowa City, IA 52242
United States

University of California, Berkeley - Berkeley Center on Comparative Equality & Anti-Discrimination Law

Boalt Hall
Berkeley, CA 94720-7200
United States

Michael Ingrassia

Independent

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