Trump Orders Chinese Company, US Tech Firm to Unwind Acquisition From 2020
President Donald Trump is ordering the reversal of a years-old purchase of audio visual technology equipment supplier Jupiter Systems by China-based Suirui Group, saying in a Federal Register notice released July 10 that the deal threatens U.S. national security. Suirui, which describes itself as a supplier of communication cloud products and services, must divest from Jupiter within 120 days, unless the company is granted an extension by the Committee on Foreign Investment in the U.S.
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The purchase was completed on Feb. 28, 2020, Trump’s order said.
During the divestment period, Suirui, which includes Hong Kong-based Suirui International Co., must not access Jupiter's “non-public source code, non-public technical information, information technology systems, products, parts and components, books and records, or facilities in the United States,” unless approved by CFIUS, the order said. And within seven days of the order, which is dated July 8, Suirui and Jupiter must “put in place and maintain any measures or controls deemed necessary by CFIUS to ensure that the access prohibited under this subsection does not occur until such time as the Divestment has been completed and verified to the satisfaction of CFIUS.”
Both companies are also blocked from transferring ownership of Jupiter, changing any legal structures or taking other actions that would prohibit them from “complying with this order as determined by CFIUS.” The companies must deliver several written certifications to CFIUS, including that they’ve complied with the order and that Suirui has destroyed all non-public code or intellectual property it has received from Jupiter. CFIUS can “require auditing” of Suirui and Jupiter to make sure that “such destruction or transfer of intellectual property or non-public source code is complete.”
To ensure compliance with the order, CFIUS and other U.S. government officials will be able to visit “all premises and facilities” of Suirui and Jupiter in the U.S., the order said, including to inspect and copy any documents and correspondence, to interview employees and to audit any information systems or other communications. CFIUS will complete this process within 90 days after the divestment has ended.
Jupiter Systems didn’t immediately respond to a request for comment, and Suirui couldn’t be reached.