The U.S. Departments of State, the Treasury and Homeland Security and the Federal Bureau of Investigation issued a joint advisory (the Advisory) on April 15, 2020, discussing the threat to the international community posed by cyberattacks linked to the Democratic People’s Republic of Korea (North Korea), in particular highlighting concerns for the financial services sector. North Korea has been subjected to comprehensive international sanctions implemented to pressure its government to denuclearize. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has implemented additional unilateral sanctions in response to other North Korean activities, including cyberattacks, human rights violations and money laundering. In addition to broad prohibitions on trade with North Korea, U.S. sanctions bar domestic financial institutions from conducting or facilitating any significant transaction in connection with trade with North Korea or on behalf of any person whose property has been blocked under executive orders imposing sanctions on North Korea. Foreign financial institutions risk secondary sanctions for engaging in the same. (more…)
On January 13, 2020, the U.S. Department of the Treasury (Treasury) issued final and interim regulations implementing the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), which expands the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS) to review foreign investments and mitigate any potential national security concerns. While the final regulations largely track the proposed regulations issued on September 17, 2019, Treasury has made refinements and added several clarifying examples. See Sidley’s previous Update on the proposed regulations.
Following the structure of the proposed regulations, the final regulations were issued in two parts: one part covers investments in real estate, available here, while the other covers certain other investments in U.S. businesses, available here. Treasury simultaneously released a number of frequently asked questions on the proposed regulations, available here, and a fact sheet, available here.
The final CFIUS regulations will go into effect on February 13, 2020.