NEWS

In this second article of our three-part series on outbound investment screening, we explore the outbound investment screening proposals from both the United States and the European Union and their future effects on Nordic companies.

US Outbound Investment Screening Regulations

Turning our attention first to the US outbound investment screening, we find that the US has adopted a relatively narrow strategy, often referred to as the “small yard, high fence” approach. The new Executive Order outlining the restrictions was issued in August 2023, and focuses on investments in specific technologies and sectors essential for “national security.”

With the concurrently issued guidance on the future regulations, we know that the three key technological categories in focus include semiconductors, quantum information technologies and artificial intelligence systems but the full scope of the regulation could have a pronounced effect on all firms that transact in or facilitate the transfer of knowledge related to these technologies.

The regulation intends to cover companies owned or located in “countries of concern” (currently only specified as China, including Macau and Hong Kong) and will cover a broad swath of securities such as debt, equity, joint ventures, and greenfield investments. It is important for us in the Nordics to appreciate that the scope of these restrictions is global, as it applies to all U.S. individuals and companies, including foreign branches, and targets investments anywhere in the world that are owned by nationals of the “countries of concern.”

Read full article here.