Is a dating app a national security asset? Yes, in some cases. Foreign investment in U.S. businesses that collect and maintain U.S. citizens’ sensitive personal data is subject to national security reviews by CFIUS. From social networking to financial services to healthcare to consumer retail, companies across sectors collect, maintain, and have access to the sensitive personal data of U.S. citizens. The implications of the personal data-national security nexus are potentially wide-ranging for foreign investment in U.S. businesses.
MassPoint's Hdeel Abdelhady has been appointed to the American Bar Association's Task Force on Gatekeeper Regulation and the Profession.
China might take a targeted approach to any restrictions on rare earth elements that echoes, or effectively duplicates, the approach of the United States, which is to control exports based on "end use" and "end user" where one or both conflict with or potentially undermine U.S. national security interests (which include technological leadership and economic security).
MassPoint's Hdeel Abdelhady spoke with NPR about the ratcheting up of U.S. sanctions, secondary sanctions, and the potential consequences of sanctions overuse. To learn more about the mechanics of U.S. sanctions, and particularly about the role of the American dollar, financial system, and economy in extending the global reach of U.S. sanctions, read Hdeel Abdelhady's Reuters insight piece, Reimposed U.S. anti-Iran sanctions leverage American economic power.
Two proxy advisors are urging Deutsche Bank's shareholders to vote against directors and senior managers for AML compliance lapses. The advice is significant as it clearly connects anti-financial crime compliance to corporate governance by activating bank shareholders as powerful enforcers anti-money laundering expectations. If Deutsche’s shareholders heed the calls of proxy advisors and unseat members of the bank’s management for AML lapses, they will set a cautionary precedent for other publicly-owned banks. But even if Deutsche’s shareholders do not so vote, the proxy advice given by ISS and ECGS has communicated a clear message that bank anti-money laundering compliance is part and parcel of corporate governance and a measure of directors’ and senior officers’ overall performance.
The U.S. government has adopted and is implementing a “whole-of-government” strategy to counter China. The whole-of-government approach entails a range of legal and policy measures to curb China’s access to U.S. technology, by lawful and unlawful means. These measures include, but are not limited to, stricter curbs on foreign investment in U.S. technology; restrictions on exports of “emerging technologies” like artificial intelligence; exclusions of Chinese firms from U.S. government and private supply chains through company bans; prosecutions of intellectual property theft; measures to counter “academic espionage” in American academic and research institutions; and, indirectly, and, indirectly, sanctions enforcement.
The Haverly case is instructive as it clarifies OFAC’s position, with respect to Haverly and likely more broadly, as to the meaning of “debt” under Directive 2, which prohibits, by U.S. persons and within the United States, dealings in “new debt” issued by parties that are listed on the OFAC-maintained Sectoral Sanctions Identifications List (SSIL) or not so listed but are owned 50% or more by one or more sanctioned parties.
As anti-corruption standards and enforcement practices become more uniform, cooperation among enforcement authorities will increase in frequency and effectiveness. In the FCPA enforcement context and in others, authorities have imposed record-setting fines, and likely will continue to do so with greater frequency, particularly where violations are egregious, widespread, or have broad impact. In such an environment, monetary penalties for avoidable violations may no longer be absorbable as the cost of doing business. As a matter of good business practice, companies of all sizes should take steps to strengthen compliance programs appropriately for their industries, organizational structures, home obligations, and the jurisdictions in which they do business.
The United States has adopted a whole-of-government approach to counter China’s “economic aggression” or “economic espionage,” umbrella terms that encompass a range of conduct including IP theft, forced technology transfer, academic espionage, and influence operations in the United States. The whole-of-government approach illustrates that the most strategically significant and complex confrontation between the United States and China is not the “trade war.” Rather, the race to dominate future technologies like artificial intelligence and 5G underpins the most complex legal and policy issues between the two nations. The U.S.-China tech war, and the United States’ whole-of-government strategy, has put Chinese technology companies under the hot light of U.S. legal and political scrutiny. Companies like Huawei and ZTE, relative unknowns in the United States until recently, have found themselves on the wrong side of U.S. law enforcement.
Hdeel Abdelhady is scheduled to speak at UNCITRAL's Asia Pacific spring conference in Incheon, South Korea, on global sales and business. More information about the conference is available here (and in Korean here).