National Security Creep in Corporate Transactions
When the Biden Administration released its Interim National Security Strategic Guidance in 2021, it asserted that “our policies must reflect a basic truth: in today’s world, economic security is national security.” This perspective is not new—the Trump Administration, too, made similar statements.
In a new paper, National Security Creep in Corporate Transactions, forthcoming in the Columbia Law Review, we explore how the fusion of economic and national security is playing out in the context of cross-border investment. In particular, we describe the phenomenon of “national security creep,” which we define as “the recent expansion of national security-related review and regulation of cross-border investments to allow government intervention in more transactions that ever before.” This “national security creep” has impacts for contract design, deal volume, and judicial review in national security-related matters.
The paper focuses on several drivers of national security creep, including the newly expanded jurisdiction of the Committee on Foreign Investment in the United States (CFIUS), the global diffusion of CFIUS-like processes to U.S. allies, and a new focus on restricting outbound investment.