Publication
Government Investigations in Singapore 2025
We have contributed the Singapore chapter of Getting the Deal Through, Government Investigations 2025.
China | Publication | December 2020
There have been lengthy discussions as to whether and when China should “establish a foreign investment security review system to conduct a security review of foreign investment that impacts or may impact the national security”1, similar to the CFIUS (the Committee on Foreign Investment in the United States) review system in the United States. After a long wait, on December 19, 2020, the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) of the People's Republic of China jointly issued the Measures on Security Review of Foreign Investment (the Measures). The Measures will come into effect on January 18, 2021 (the Effective Date).
In this article, we examine the key points in the Measures.
Any investment made by a foreign investor within the territory of China2, directly or indirectly, by way of:
will be deemed to impact the national security of China and will be subject to a security review, if:
A special working mechanism office will be responsible for organising, coordinating and directing the security review work (the Office). The Office falls under the purview of the NDRC but is also under the joint supervision of the NDRC and the MOFCOM. At the time of writing, it is unclear what the official name of the Office will be and when it will commence operations.
Local offices will also be established and applicants will be able to apply for a security review through a local office as opposed to applying via the central office.
China has launched an on-line filing system across the country to simplify and ease the process for registering foreign investments. Under the current regime, any foreign investment project which is not listed on the Negative List4 can be simply registered on-line via a registration system which is jointly operated by the State Administration of Market Regulation (SAMR) and MOFCOM.
After the Measures have come into effect, if a foreign investment is not listed on the Negative List but is subject to a security review, the investor will be required to proceed with the on-line filing once the project has been cleared by the Office. However, it is unclear whether the security review will be combined with the SAMR/MOFCOM filing and whether the same filing system can be used or whether a separate filing system will be developed specifically for the purpose of the security review.
The key steps and indicative timeframe for a security review under the Measures are set out below.
Notwithstanding the timeframe set out above, the actual timeframe for a security review may be longer because the prescribed periods (as set out above) do not take into account any time spent preparing and submitting additional documents requested by the Office (whether at a local or central level). In addition, the Office has the discretion to extend the prescribed periods of 15 and 60 working days.
It appears that the security review requirement only applies to foreign investment projects which take place on and after the Effective Date. However, it is unclear if a foreign investment project which is underway before the Effective Date will, after the Measures come into effect, be subject to a review initiated by the Office or upon the suggestion by a third party (as discussed below).
Although the Measures establish the security review framework, the implementation rules have yet to be published. We expect the implementing rules to be released alongside the publication of other implementation rules relating to foreign investment in China (such as the new Foreign Investment Law, the updated Negative List and the new Unreliable Entities List).
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We have contributed the Singapore chapter of Getting the Deal Through, Government Investigations 2025.
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The private credit market and direct lending have grown and diversified immensely in the past decade, offering alternative sources and terms of debt compared to those historically provided by the syndicated leveraged loan and public issuance markets. Consequently, they are fast becoming pivotal components in the capital ecosystem, so much so that the Bank of England consider that the private credit market is currently responsible for approximately $1.8 trillion of debt issuance, which is four times its size in 2015. This growth has been particularly pronounced in Europe and the US but there has also been significant activity in Asia.
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