CHIPS Act of 2022 Contains Restrictions on U.S. Entities and Persons Working in Sensitive Countries

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Friday, August 12, 2022
Bruce Zagaris

On August 9, 2022, President Joseph Biden  signed into law the CHIPS Act of 2022.  It enables the U.S. Government a primary role in deciding which chip makers will benefit from the legislation’s funding.  It also gives the Department of Commerce the authority to review future company investments in sensitive countries (e.g., China) and to claw back funds from any firm that it deems to have violated its rules.  The law also authorizes the Commerce Department to update the rules for foreign investment in the future.  The law also requires Federal research agencies to prohibit participation in “foreign talent recruit programs” and requires Federal research agencies to create policies to prohibit awards to individuals party to a “malign foreign talent recruitment program.”  To a large extent the new law is an adjunct to the “Strategy for Countering Nation-State Threats,” which Matthew Olsen, the new head of the National Security Division of the Department of Justice, announced on February 23, 2022 replaced the China Initiative.  This article discusses the restrictive parts of the CHIPS Act.