Investing in the US Marketplace: What to Expect and How to Prepare for the USMCA

What’s Ahead

The developments on the USMCA front come at the same time when the US Administration will be introducing a host of unilateral rule changes regarding foreign investments into the United States. In other words, 2020 is the year when executives will want to:

• Ask the right questions 
• Receive the right information and informed strategic advice

Here’s Why

Under the NAFTA, Canadian investors were entitled to bring a claim for breach of an investment protection directly against the United States. This was possible under the Investor-State Dispute Settlement (ISDS) provisions of the Investment Chapter.

Clearly, the pending coming into force of the USMCA will bring about major changes for the protection of Canadian investment in the United States. Company executives will want to know:

• With respect to existing investments, what, if any, NAFTA investment protections are retained, at least temporarily, via the USMCA’s “legacy” provisions;
• With respect to new investments, how to manage the complete removal of ISDS from the USMCA.

Outside of the USMCA, the enactment of new laws and regulations by the US Administration that broaden the authority of the US Committee on Foreign Investment in the United States (CFIUS) to screen certain types of inbound Canadian investment may impose significant additional requirements and restrictions.

Companies in Canada will want to know if these laws and regulations apply to their investments and, if so, what procedures must be followed to ensure that their investments are not penalized.

Allow Me to Introduce My Colleagues

Tim Feighery

Tim heads the firm’s International Arbitration & Dispute Resolution practice and represents both sovereigns and investors before various arbitration fora. He has recently been appointed as an arbitrator in an ICSID annulment proceeding involving an energy dispute and is named to the ICSID Panel of Arbitrators and Conciliators, and the Institute for Energy Law’s Energy Arbitration List.

Prior to joining Arent Fox, Tim served as Chairman of the United States Foreign Claims Settlement Commission upon Presidential nomination and confirmation by the US Senate. Previous to his appointment, Tim held various senior-level positions in the State Department office responsible for defending United States’ interests internationally in the areas of state-to-state arbitration, investor-state arbitrations, US citizen foreign investment disputes, and international claims mechanisms.

He managed the defense of claims in excess of $55 billion before the Iran-US Claims Tribunal in The Hague under modified UNCITRAL rules.

Lee Caplan

Lee is a Partner in the firm’s International Arbitration & Dispute Resolution practice who counsels private and sovereign clients in a wide range of matters involving international dispute resolution, public international law, and international investment law and policy.

Lee regularly appears before international tribunals in connection with complex and high-value disputes arising out of concession agreements, investment treaties, and other international agreements. Lee’s experience spans a range of industries, including oil and gas, hospitality, and telecommunications. He is the co-author of a leading treatise on international arbitration entitled The UNCITRAL Arbitration Rules: A Commentary and a leading commentary on the US Model Bilateral Investment treaty in Commentaries on Selected Model International Investment Agreements.

Prior to joining Arent Fox, Lee served as a senior attorney-adviser at the US State Department’s Office of the Legal Adviser, where he represented the United States in international arbitrations and international investment treaty negotiations, including the negotiation of the Trans-Pacific Partnership Agreement.

Lee currently serves as a US delegate to the UNCITRAL Working Group III discussions on the possibility of reforming the investor-state arbitration system. Lee also heads the firm’s Corporate Social Responsibility practice.

Dave Hanke

Dave had significant experience in Congress with helping to draft the new CFIUS law. His latest alert on the topic can be read here.

Prior to joining Arent Fox, Dave spent over 12 years on Capitol Hill, serving in a variety of senior national security staff positions, including as a Professional Staff Member on the US Senate Select Committee on Intelligence (SSCI) and as Counsel for National Security Affairs to Senator John Cornyn (R-TX), then-Senate Majority Whip.

Allow Me to Connect You with My Colleagues

I would be happy to organize a call with any of my colleagues. Having worked on behalf of Canadian commercial interests in the US marketplace for over 30 years, I fully understand the changes that have taken place and the need to stay ahead of critical rule changes – if not to be part of shaping them.