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Court decision opposing CFIUS sanctioned by the Appeals Court, with comments from Jonathan Poling

International trade specialist Jonathan Poling, a partner at Gump's global practice, provides insights in FDI Magazine regarding a recent dispute involving Sanay Group, a prominent Chinese manufacturer of construction equipment.

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Federal ruling against the CFIUS evaluated by Jonathan Poling
Federal ruling against the CFIUS evaluated by Jonathan Poling

Court decision opposing CFIUS sanctioned by the Appeals Court, with comments from Jonathan Poling

In a significant development, the Committee on Foreign Investment in the United States (CFIUS) has ordered Ralls Corporation, a U.S. company, to sell four wind farms located in Oregon, citing national security concerns. The property is situated in or near U.S. Navy restricted airspace.

The case involves Sanay Group, a Chinese manufacturer of construction machinery, which has a stake in Ralls. The order was issued due to concerns about the potential risk to national security posed by the wind farms' proximity to sensitive military areas.

Ralls, initially, appealed the decision, first to a federal district court in Washington and then to the U.S. Court of Appeals. The company claimed it was denied due process. However, President Obama upheld CFIUS's decision, which is not subject to review.

The appeals court ruled that Sanay, the Chinese company, had a constitutional right to see and rebut the unclassified evidence relied on by CFIUS. This ruling, according to Jonathan Poling, a partner in Gump's international trade practice, only applies to "unclassified" information, as much of CFIUS's work is classified.

Poling, who was a former Justice Department representative on CFIUS, predicts that the ruling will make CFIUS more reluctant to generate unclassified information in its analysis. He further stated that the ruling could potentially lead to a more opaque process in future cases.

It is important to note that the ruling does not specify the judge deciding the case related to Ralls, Sanay Group, or the Committee on Foreign Investment in the United States.

In conclusion, the case between Ralls Corporation and the Committee on Foreign Investment in the United States serves as a reminder of the complexities surrounding foreign investments and national security concerns in the United States. The ruling, while granting Sanay the right to see unclassified evidence, does not change the outcome of the case, as President Obama upheld CFIUS's decision.

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