Doing Business in the United States

Critical Minerals

Trump Administration Targets Chinese Dominance, Corruption in Africa

Notably, in the two pages of the NSS that are devoted to the National Security Strategy in the Africa context, none of Africa’s 54 nations are mentioned, but China is named twice. The NSS notes with concern China’s “expanding . . . economic military presence in Africa, growing from a small investor in the continent two decades ago into Africa’s largest trading partner today.” China’s methods and influence in Africa are described unflatteringly.  “Some Chinese practices,” the NSS states bluntly, “undermine Africa’s long-term development by corrupting elites, dominating extractive industries, and locking countries into unsustainable and opaque debts and commitments.”

Anti-Corruption

Hdeel Abdelhady to Speak on Managing Money Laundering, Trade Sanctions, and Corruption Risks

MassPoint’s Founder and Principal, Hdeel Abdelhady, will speak at a program on managing money laundering, trade sanctions, and corruption risks in business. The program, entitled “Know Your Business Partners: A Must to Managing Money Laundering, Trade Sanctions, and Corruption Risks,” will take place on November 17, 2017 in Washington, D.C. at the American Bar Association Business Law Section’s Fall 2017 Meeting.

Anti-Corruption

Sovereign Commercial Enterprises: Anti-Corruption and Confidentiality Risks

State-owned enterprises (SOEs, including sovereign wealth funds) are prominent players in international business. Given their ownership, SOEs have garnered scrutiny for their lack of transparency and heightened anti-corruption and anti-money laundering risk, as have individual SOE executives and other personnel who qualify as Politically Exposed Persons. In connection with commercial activities, SOEs are not protected in most cases by sovereign immunity. Thus, SOEs can, like their privately-owned counterparts, be subject to foreign legal processes. Given the greater scrutiny around SOEs and some of the high profile enforcement actions involving them directly or indirectly (for example, the 1MDB case), anti-corruption and other compliance, as well as good governance and risk management, are essential to avoid legal, commercial, and reputational risk and loss.

CFIUS

Senators Raise National Security Concerns About Foreign Investment in U.S. Real Estate

On May 17, 2017, U.S. Senators Ron Wyden (D-OR), Claire McCaskill (D-MO), and Sherrod Brown (D-OH)—respectively ranking members of the Senate Finance; Homeland Security and Government Affairs; and Banking, Housing, and Urban Affairs Committees of the U.S. Senate—asked the Government Accountability Office (GAO) to review the approach taken by the Committee on Foreign Investment in the United States (CFIUS) to foreign investment in U.S. real estate and to “assess whether and how CFIUS addresses the full range of national security challenges such transactions may pose.” (The Senators’ letter to the GAO is below). Specifically, the Senators have asked the GAO to examine a number of issues aimed at assessing the extent to which applicable regulations and the CFIUS process capture real estate transactions, the percentage of foreign acquisitions of U.S. real estate that have “filed” for CFIUS review, and the information and processes used by CFIUS to assess national security issues raised by foreign acquisitions of U.S. real estate.

Sanctions

China’s One Belt One Road Could Disrupt U.S. Legal Dominance

The OBOR, even if partially successful, would, as many analysts and commentators have noted, alter the global trade landscape, if not “shake up” the global economic order in place since the end of World War II. Less discussed (except, for example, in this 2015 MassPoint Occasional Note) is one likely secondary effect of the OBOR and other trade and finance initiatives that are not centered on the U.S. dollar or the Bretton Woods system: the likely curtailment of the global reach of U.S. law.

Anti-money laundering

Congressional Hearing on Terrorism Financing Probes Bank Secrecy Act Data Effectiveness, Potential BSA Amendments

On April 27, 2017, I attended a Congressional hearing on “Safeguarding the Financial System from Terrorist Financing,” held by the House Committee on Financial Services’ Subcommittee on Terrorism and Illicit Finance (the “Subcommittee”). The sole witness was Mr. Jamal El-Hindi, Acting Director of the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury charged with protecting the financial system from money laundering, terrorism financing and other illicit activities. The hearing’s purposes were to examine the methods and efficacy of FinCEN data collection, processing and information sharing and whether the Bank Secrecy Act (BSA) and USA PATRIOT Act should be amended to improve FinCEN’s anti-money laundering (AML) and counter-terrorism financing (CFT) capacities and performance. In this brief MassPoint update, I highlight BSA data collection and usage numbers and some of the questions and issues that appeared to be of particular interest and/or concern to Congress members in attendance, taking into account the nature and frequency of the questions asked, the tone of questions, and related requests for additional or clarifying information from FinCEN.

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