How We Help
CFIUS Risk Assessments
National security in the CFIUS context is broad and not always apparent. For example, companies without a robust Office of Foreign Assets Control (OFAC) sanctions compliance program are often flagged as a security risk. Understanding the potential concerns of government regulators early in the deal process is essential. Our experts help identify challenges that might arise and develop strategies to help to neutralize those challenges.
Investigative Due Diligence
StoneTurn’s seasoned investigators perform essential due diligence on potential targets, investors and partners, within the framework of a national security review.
Mitigated entities that handle classified information as part of their business are subject to the U.S. government’s industrial security program, administered by the Defense Security Service (DSS). Mitigation decisions by DSS will impact investments in ways that are not entirely intuitive. StoneTurn’s forensic accountants and data analytics professionals help senior leaders visualize the impact and possibilities for business success.
CFIUS and FOCI Mitigation Support
While the Committee for Foreign Investment in the U.S. (CFIUS) ultimately approves most deals that are submitted to their review, this approval frequently requires the acquiring company to enter into a binding agreement with the government to mitigate the identified national security concerns. Mitigation terms can range from minor contractual commitments by a foreign parent to significant and detailed operational restrictions on the U.S. subsidiary.
If a foreign company requires access to U.S. classified information, further mitigation would also be required under the Department of Defense’s Foreign Owned, Controlled or Influenced (FOCI) program administered by the Defense Counterintelligence and Security Agency. FOCI mitigation requires additional special corporate structures and operational requirements to preserve and protect classified information which can be onerous and lead to operational restrictions.
StoneTurn can help companies facing these challenges. Our International Trade Compliance team has advised companies on what mitigation structures would be most advantageous to being able to compete in an industry or business line. StoneTurn professionals bring experience negotiating mitigation terms on both the government and private sector side of deals that gives them a unique insight on these structures.
StoneTurn has also advised foreign companies on strategy for entering a U.S. market space and potential mitigation that the foreign company would be likely to encounter in the pre-acquisition and due diligence phase. Our professionals help anticipate, analyze, and strategize potential mitigation proposals from the government. We can also assist in balancing the competing interests of other countries conducting national security reviews of foreign inbound investments.
Compliance & Monitoring
Once a mitigation agreement is in place, creating the procedures and policies necessary for a successful, growing business to ensure compliance can be challenging. We view compliance not only as a business imperative but also as a potential differentiator.
StoneTurn professionals bring experience successfully operating CFIUS- and FOCI-mitigated companies. We can help a company to establish a new mitigation regime or help to improve an existing entity’s business performance or compliance. Our team works with companies to implement or enhance necessary internal controls and also monitors mitigated operations to ensure compliance and efficiency.
OFAC Sanctions Compliance
For over a decade, the Office of Foreign Assets Control (OFAC) has more aggressively implemented sanctions, not only as a human rights protection or national security measure, but also as part of U.S. trade wars. At the same time, the Specially Designated Nationals and Blocked Persons (SDN) List has increased exponentially to approximately 1,500, creating a more complex and dynamic international economic environment.
StoneTurn assists companies and counsel in performing gap analyses to identify and assess potential vulnerabilities that could lead to sanctions violations and multi-billion dollar fines. Our forensic accounting and compliance experts work collaboratively to help organizations unravel complicated sanctions regimes and design or enhance robust compliance programs in line with the latest OFAC guidance. We also provide on-demand investigators to conduct comprehensive inquiries into allegations or “red flags” indicating possible non-compliance.