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
Date Written: November 3, 2006
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
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