Scope of Overseas Investment Restrictions on US Corporations
Government "Analyzes Impact on Korea"
As the United States imposes strict measures to block direct investment by American capital in advanced technologies in China, the Ministry of Foreign Affairs stated, "We will closely analyze the impact on our economy and, if necessary, submit our opinions to the U.S. government."
On the 10th, the Ministry of Foreign Affairs said, "The U.S. overseas investment restriction system applies to future investments and is limited to U.S. corporations. The impact on domestic industries is expected to be limited."
Earlier, the White House announced an executive order restricting investments by Americans in advanced technology sectors of countries of concern to prevent the enhancement of military and intelligence capabilities of those countries and to protect security.
The executive order covers advanced semiconductor, artificial intelligence, and quantum computing industrial technologies in countries of concern. The investments subject to the order are divided into prohibited investments and those requiring prior notification, depending on the specific technology sector.
The types of transactions restricted include mergers and acquisitions, equity acquisitions through private equity and venture capital, joint ventures, and certain debt financing transactions convertible into stock. Transactions through stock markets, index funds, mutual funds, and other indirect investments are being considered for exemption from regulation.
The Biden administration designated companies in China, Hong Kong, and Macau as the regions to which these rules apply and plans to implement them next year after industry feedback.
As the U.S. administration intensifies pressure on allies to join various containment measures against China, there are also expectations that the U.S. may pressure South Korea to participate in these measures in the future.
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