A Dorsey & Whitney memo says that Congress is considering bipartisan legislation that would prioritize review of foreign investments in the food sector. Among other things, the proposed Food Security is National Security Act of 2021 would treat foreign investments in the food, beverage and agriculture (FB&A) sector the same way in which investments in companies with critical tech or personal data are treated under the current CFIUS regime.
The memo says that it’s too early to tell whether the legislation will be enacted, but points out that CFIUS has long been active in reviewing foreign investments in the FB&A sector. As this excerpt explains, investments in FB&A companies may already implicate existing areas of national security concern:
Increasingly, U.S. FB&A companies may also be technology companies. Some of the technologies relied upon or developed by FB&A companies are, or may become, “critical technologies” controlled for U.S. export purposes. For example, U.S. FB&A companies’ use of unmanned aerial vehicles and certain robotics continues to grow. The U.S. Department of Commerce has also been exploring whether to control various emerging technologies under its Export Administration Regulations (“EAR”).
Many of the emerging technologies that the Commerce Department is considering controlling – such as biotechnology; artificial intelligence/machine learning; position, navigation, and timing (“PNT”) technology; logistics technology; and robotics – are also technologies that are increasingly relied upon within the FB&A sector. CFIUS will thus continue to be keenly interested in foreign investments in or acquisitions of FB&A companies that work with such new technologies. As the FB&A sector continues to adopt such technologies to increase productivity, CFIUS will likely become more concerned about foreign investment in or acquisitions within the sector, particularly if the foreign persons are from countries that CFIUS views as U.S. adversaries.
The memo also points to FIRRMA’s expansion of the scope of transactions under CFIUS’s jurisdiction to include real estate, the national security implications of the JBS cyber attack and the increasing collection of significant volumes of sensitive personal data by companies in the sector as other reasons for heightened CFIUS scrutiny of foreign investments in FB&A companies.
-John Jenkins, DealLawyers.com November 11. 2021