China’s MOFCOM Issues Interim Rules on National Security Review of Foreign Acquisitions

On March 5, 2011, the Chinese Ministry of Commerce’s (“MOFCOM’s”) interim rules implementing the new Chinese security review mechanism for foreign acquisitions of Chinese enterprises entered into force. The Interim Rules were issued on March 4, 2011 and will remain in force until August 31, 2011. MOFCOM invites public comments until April 10, 2011. The speedy adoption and implementation of the new security review regime may reflect Chinese frustration over U.S. security reviews of proposed foreign investments by Chinese companies. The European Union is also reportedly considering introducing a security review regime for foreign acquisitions, apparently in response to concerns about potential Chinese investments in Europe.