Laura Fraedrich is interviewed in Foreign Investment Watch about foreign direct investment requirements, CFIUS filings, and mitigation negotiations. Regarding the incoming administration, she says, “I anticipate that the United States will return to a more multilateral approach. … Specifically, I think we will see a return to a cooperative effort to restoring the dispute settlement arrangement at the WTO and to the negotiation of multilateral trade agreements.” Fraedrich notes that “during the past five years, the majority of mitigation agreements have related to preventing access to data or technology by the foreign investors,” and she advises companies to “carefully consider where the national security concerns may lie and determine the cost of potential mitigation arrangements when negotiating. This is because certain mitigation requirements might impact the benefit of the bargain and thus valuation. Finding this out after the deal has been struck can create a difficult situation.”

Fraedrich encourages companies to consider foreign investment and ownership implications early in the transaction: “A company organized in the United States might be a foreign entity if there is foreign ownership and control. A joint venture that is organized in a foreign country might be subject to CFIUS jurisdiction if a U.S. business has been contributed. The new rules for private equity funds are complicated, and if fund managers are not careful, a U.S.-organized fund can be a foreign person.”