Businesses and entrepreneurs on both sides of the Pacific should be aware and celebrate that just as cross-border commerce is increasing, so, too, is international judicial recognition of commercial judgments, as evidenced by recent Chinese and Washington State court rulings.
In 2017, a Chinese court, perhaps for the first time, enforced a U.S. commercial judgment. An article by Dr. Jie (Jeanne) Huang published by University of New South Wales’ China International Business and Economic Law initiative  reported on the 2017 decision, which recognized and enforced a monetary judgment from the Los Angeles County Superior Court. The case is Liu Li v. Tao Li and Tong Wu  decided by the Intermediate People’s Court of Wuhan City, China.
On January 2, 2018, the Committee on Foreign Investment in the United States (CFIUS) rejected Ant Financial’s plan to acquire U.S. money transfer company MoneyGram International over national security concerns. According to Reuters’ report, CFIUS rejected the deal due to concerns over the safety of data that can be used to identify U.S. citizens. The companies have already undergone the CFIUS process three times and proposed safeguard measures, but these efforts did not clear CFIUS’s concerns. The companies decided to terminate their deal after CFIUS rejected their proposal. Ant Financial needs to pay MoneyGram a $30 million termination fee for the deal’s collapse.
Despite the rapid rise in Chinese investment in the U.S. in recent years, there has been some early speculation that the Trump Administration would not allow the level of Chinese investment to continue at the same rate.
Proposals to limit Chinese investment continue to be floated in Congress. Recent developments suggest however that these concerns are overblown. Prospects for Chinese investment remain bright. At the same time, the Committee on Foreign Investment in the U.S. (CFIUS) retains considerable discretionary authority to block foreign direct investments from China and elsewhere, or to dictate changes to the terms of the deal. Threats to U.S. national security, including the safety of our country’s infrastructure, remain key criteria for CFIUS in its scrutiny of inbound transactions.
The International Practice Group of Garvey Schubert Barer is a cross-disciplinary group of attorneys practicing in areas ranging from business transactions, immigration, maritime, government regulatory work, transportation and logistics, and estate planning. The group members include bilingual and multicultural attorneys who are well-versed in handling these subject matters in a cross-border context. The firm’s attorneys have been actively practicing in the international arena since the early 1970s.