Order To Divest TikTok Parent Company's Assets In The US; A Broadening Of CFIUS's Jurisdiction
2020. 8. 21.
Related Article 1: https://www.clearymawatch.com/2020/08/president-trump-orders-tiktok-divestment-sweeping-order-appears-to-indicate-a-broadening-of-cfiuss-jurisdiction/?utm_source=Cleary+Gottlieb+-+Cleary+M%26A+and+Corporate+Governance+Watch&utm_campaign=71e19ba869-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_b7a1637ce9-71e19ba869-78887610
After President Trump's Executive Order on the WeChat and TikTok, President Trump's executive order related to the TikTok was issued again.
President Trump issued an executive order ByteDance, the parent company of TikTok, to divest its assets in the US within 90 days.
According to this executive order, which was issued after completion of a review by the Committee on Foreign Investment in the United States (“CFIUS”), the reason is that ByteDance's business could threat U.S. national security.
This executive order includes the followings: (1) ByteDance is required to report to the CFIUS the potential buyer of its assets in the US.
(2) ByteDance is required to provide CFIUS with a confirmation that all information collected from TikTok’s or Musical.ly’s users in the US has been destroyed. (3) CFIUS investigates ByteDance whether it complies with the executive order every week.
(4) CFIUS can extends the deadline of divesture by 30 days
Also, CFIS are authorized to
(a) copy or investigate any documents of ByteDance,
(b) investigate the information system or technology of ByteDance, and
(c) interview any officers or employees of ByteDance.
This executive order shows that US-China trade war is still going on and that CFIUS’ significant role is getting bigger. Entrepreneurs, startups, dealmakers and lawyers seeking cross-border deals need to be alert to the possibility of CFIUS's jurisdiction.