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By Jeff Keitelman and Chris Griner, Stroock

Foreign ownership of property has become a key touchstone in the debate over national security, especially as government agencies and contractors are regular tenants in buildings controlled by non-U.S. investors or owners. Thus, it’s not surprising that the Government Accountability Office recently undertook an independent review of leasing practices of the General Services Administration, to assess how the GSA mitigates risks when it leases space to high-security tenants in foreign-owned buildings where concerns of espionage or influence-peddling could be elevated.

A new bill is now before Congress proposing to change the process by which federal leasing agencies, including the GSA, gather information on the actual beneficial owners of foreign-owned real estate. Three U.S. Senators are attempting to examine the Committee on Foreign Investment in the United States review process and the types of real estate transactions that fall under the committee’s jurisdiction.

The GAO report highlighted the challenges facing the federal government. The report focused primarily on the risk of espionage, cyber-attack, and money laundering that could arise when high-security federal tenants lease space in buildings owned or controlled by foreign entities. After reviewing the GSA’s 1,406 high-security leases (facilities with security levels III, IV and V), the report found that 20 of the leases were in buildings with direct foreign ownership. The report also found that, in addition to not having complete information on the ownership structure of the buildings, the GSA had no information on beneficial ownership in one-third of the leases reviewed. The GAO noted that lacking knowledge of the identities of the beneficial owners, whether foreign or domestic, presented a potential risk that money laundering and other illegal activities could go undetected.

According to the report, these shortcomings stem from the fact that, under current law, the GSA is only required to determine whether a prospective lessor is a “responsible party,” a review that focuses mainly on the potential lessor’s financial ability to perform.  Although some requirements currently exist to deal with potential national security risks (such as restricting access to the leased space by owners and other parties and certain informational certifications by potential lessors), the GAO concluded that these provisions do not adequately address its concerns. In response to the GAO report, Representatives Stephen F. Lynch (D-MA) and Peter King (R-NY), the co-chairs of the Task Force on Anti-Terrorism & Proliferation Financing, introduced H.R. 2426, the “Secure Government Buildings from Espionage Act of 2017” to address the issues highlighted by the GAO report.

H.R. 2426

H.R. 2426 would require the GSA (and other non-military federal agencies with independent statutory leasing authority) – prior to awarding any leasing contract for a high-security government tenant – to identify each beneficial owner of a potential lessor and identify any beneficial owner who is a foreign person or entity. Further, the bill would require that such information be obtained when a proposal in response to a “solicitation for offers” is first submitted to the GSA, and that such information be updated within 60 days following any change in the information initially provided

Notably, the bill does not specify the size of the ownership interest that must be held by a beneficial owner before information must be divulged or how the information is to be analyzed for purposes of awarding leasing contract. On introducing the bill, Congressman Lynch cited six FBI offices and three Drug Enforcement Administration offices in buildings owned by foreign interests, and noted that his bill has the support of Global Witness, an advocate for greater transparency in financial transactions.

Senators Ask GAO to Review CFIUS Analysis of Real Estate Transactions

Apparently unrelated to the House Bill, on May16, Senators Ron Wyden(D-OR), Sherrod Brown (D-OH) and Claire McCaskill (D-MO) sent a request to the GAO to review how CFIUS analyzes real estate transactions. Currently, CFIUS has jurisdiction to review any “covered transaction,”i.e., any acquisition, merger or takeover that could result in foreign control of a “U.S. business.” CFIUS only has the ability to review a real estate transaction if a foreign person acquires control of a U.S. business. This could include the purchase of a company that operates real estate, or the purchase of assets that, taken together, constitute a “U.S. business,” as might be the case, for example, with a purchase that includes a building, contracts and personnel used to operate the building. National security issues are rife if the property includes sensitive government tenants or is located near a sensitive government facility.

With specific reference to Chinese investors with ownership structures and political ties that are “murky at best,” the Senators’ request asks, among other things, for the GAO to:

(i)assess whether CFIUS has adequate resources to review foreign real estate transactions, given the rise in foreign investment;

(ii)identify the information on beneficial ownership that CFIUS uses and the sources from which it receives such information; and

(iii)identify the types of real estate transactions that do not currently fall within the committee’s jurisdiction for review.

Given the tenor of the letter and its references to beneficial ownership issues, it is likely intended to establish a predicate for legislation to expand CFIUS’s review of real estate acquisitions to include, for example, simple asset buys. It is not clear at this writing whether the GAO will undertake the assignment. Importantly, the GAO is currently in the midst of a comprehensive review of CFIUS authority that was requested by several members of Congress in September 2016. A report is expected to issue later this year. This review could readily include the questions raised by the three Senators in their May 2017 letter.

Potential Impact of H.R. 2426 and GAO CFIUS Review

Although H.R. 2426, if enacted, would only directly affect GSA leases that post-date enactment – perhaps increasing the length of the procurement process – such contingencies can be accounted for if taken into consideration early enough in the process. Practically, however, problems could arise in transactions involving multiple properties, even if only one is a building with a GSA lease, or in the merger context if the target entity owns GSA-leased property. If the proposed legislation were to become effective, both of these scenarios would require disclosure of all beneficial owners of the acquiring entity; the impact on a larger deal is unknowable at this time.

It is worth noting, of course, that the GSA needs no new legislation to request and obtain information on the beneficial ownership of bidders, especially for lease agreements involving sensitive tenants. Nevertheless, the legislative proposal and the GAO report could prompt such actions. Complications could also arise however, in the acquisition of properties that have existing GSA tenants. Potential purchasers of properties with current GSA leases should be aware that the GSA Global Lease Form L100, while requiring the lessor to notify the GSA within five days after title to the property changes, also grants the GSA the right not to recognize a potential transferee entity under a GSA lease on the grounds that the transferee “will not be in the Government’s interest.” In that event, the original lessor will remain liable for all obligations under the lease. Although we have not seen this in practice, with the increased scrutiny concerning foreign beneficial ownership in government leased buildings, it is possible that potential acquirers might not be recognized as transferees, creating immense issues in real estate transactions large and small. Again, this potential roadblock can be accounted for if taken into consideration early in a transaction and properly addressed in the deal documents.

Taken together, changes in the current GSA procurement and the CFIUS review processes for real estate transactions involving foreign entities could increase the costs and uncertainties associated with deals. For this reason, it is important to take the CFIUS process into account in any transaction that could result in foreign control of a U.S. business that involves real estate, large or small. Although most transactions that go through CFIUS review are approved, successful reviews require careful planning, especially when the target firm is the landlord to sensitive government tenants, or where real property is located in close proximity to sensitive government installations, such as forts or training facilities. Similarly, real estate firms with significant foreign ownership need to be aware that their foreign ownership could become a factor in proposals for U.S. government leases involving sensitive government tenants. Access restrictions could be the price of doing business.

Stroock Co-Managing Partner Jeff Keitelmanhas been lead lawyer on some of the country’s highest-profile commercial real estate transactions. He is Co-Managing Partner of the Washington, DC office and Co-Chair of the national Real Estate Practice Group.

Stroock partner Chris Grineris the Chair of the firm’s National Security/CFIUS/Compliance practice group.  Mr. Griner previously served as an attorney advisor in the Office of the General Counsel of the Department of Defense and is a Lieutenant Colonel, USAF, Retired. He is Co-Managing Partner of Stroock’s Washington, DC office.

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U.S. inauguration turns poet Amanda Gorman into best seller



U.S. inauguration turns poet Amanda Gorman into best seller 1

WASHINGTON (Thomson Reuters Foundation) – The president’s poet woke up a superstar on Thursday, after a powerful reading at the U.S. inauguration catapulted 22-year-old Amanda Gorman to the top of Amazon’s best-seller list.

Hours after Gorman’s electric performance at the swearing-in of President Joe Biden and Vice President Kamala Harris, her two books – neither out yet – topped’s sales list.

“I AM ON THE FLOOR MY BOOKS ARE #1 & #2 ON AMAZON AFTER 1 DAY!” Gorman, a Los Angeles resident, wrote on Twitter.

Gorman’s debut poetry collection ‘The Hill We Climb’ won top spot in the online retail giant’s sale charts, closely followed by her upcoming ‘Change Sings: A Children’s Anthem’.

While poetry’s popularity is on the up, it remains a niche market and the overnight adulation clearly caught Gorman short.

“Thank you so much to everyone for supporting me and my words. As Yeats put it: ‘For words alone are certain good: Sing, then’.”

Gorman, the youngest poet in U.S. history to mark the transition of presidential power, offered a hopeful vision for a deeply divided country in Wednesday’s rendition.

“Being American is more than a pride we inherit. It’s the past we step into and how we repair it,” Gorman said on the steps of the U.S. Capitol two weeks after a mob laid siege and following a year of global protests for racial justice.

“We will not march back to what was. We move to what shall be, a country that is bruised, but whole. Benevolent, but bold. Fierce and free.”

The performance stirred instant acclaim, with praise from across the country and political spectrum, from the Republican-backing Lincoln Project to former President Barack Obama.

“Wasn’t @TheAmandaGorman’s poem just stunning? She’s promised to run for president in 2036 and I for one can’t wait,” tweeted former presidential candidate Hillary Clinton.

A graduate of Harvard University, Gorman says she overcame a speech impediment in her youth and became the first U.S. National Youth Poet Laureate in 2017.

She has now joined the ranks of august inaugural poets such as Robert Frost and Maya Angelou.

Her social media reach boomed, with her tens of thousands of followers ballooning into a Twitter fan base of a million-plus.

“I have never been prouder to see another young woman rise! Brava Brava, @TheAmandaGorman! Maya Angelou is cheering—and so am I,” tweeted TV host Oprah Winfrey.

Gorman’s books are both due out in September.

Third on Amazon’s best selling list was another picture book linked to politics and projecting hope: ‘Ambitious Girl’ by Vice-President Kamala Harris’ niece, Meena Harris.

(Reporting by Umberto Bacchi @UmbertoBacchi, Editing by Lyndsay Griffiths. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit

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Why brands harnessing the power of digital are winning in this evolving business landscape



Why brands harnessing the power of digital are winning in this evolving business landscape 2

By Justin Pike, Founder and Chairman, MYPINPAD

Delivery of intuitive, secure, personalised, and frictionless user experiences has long been table stakes in digital commerce, well before the era of COVID-19. As businesses harness the revolutionary power of digital technologies, they have pursued large-scale change to adapt to evolving consumer preferences (some more successfully than others, but that’s a blog for another day). Digital transformation is a term we hear repeatedly, and it looks different for each organisation, but essentially, it’s about utilising technology and data to digitise, automate, innovate and improve processes and the customer experience across the entire business.

As I said, this was already well underway but then came 2020 and no industry escaped the disruption of the coronavirus outbreak, which has had an indelible impact on businesses performance, operations, and revenue. Regardless of whether the impact of COVID has been very positive or very challenging, it has forced organisations globally to re-evaluate and re-orient strategies to adapt.

As lockdowns and pandemic-related restrictions continue to change daily life, this raises the question of how we can balance a dramatic shift to digital and the benefits it brings, while ensuring business continuity and innovation both during and post-COVID, and protecting everyone against fraud?

Digital is an essential survival tool, and even more so in a COVID world

No one could have predicted the dramatic digital pivot that has taken place over this year. Indeed, within weeks of the COVID outbreak cash usage in the UK dropped by around 50%. Digital solutions including delivery applications, contactless payments, mobile commerce, online and mobile banking have become essential components of a touchless customer experience in the era of social distancing. It’s no longer just about an enhanced and superior customer experience, it’s also about health, safety and survival.

In store, businesses have benefited from contactless payments enabling faster throughput and reduced need for consumers to touch payment terminals (therefore requiring greater cleaning, which degrades the hardware much faster). Mastercard reported a 40% increase in contactless payments – including tap-to-pay and mobile pay – during the first quarter of the year as the global pandemic worsened. Digital has also become an essential sales channel for many B2C brands. Where brick and mortar stores have been required to close, digital commerce enables continuity of customer relationships and revenue. This channel also provides brands with rich customer data, which can be used to enhance and personalise the customer experience and typically results in greater levels of engagement and uplifts in revenue.

Industry forecasts estimate that worldwide spending on the technologies and services enabling digital transformation will reach GBP 1.8 trillion in 2023 – a clear indication that the process represents a long-term investment and a global commitment to digital-first strategy. The key point here is that digital brings significant benefits, and regardless of COVID, is here to stay.

The challenges that rapid digital transformation brings to businesses

Justin Pike

Justin Pike

Regardless of whether businesses are operating in developed or less-developed economies, these times of crisis have levelled the playing field in the sense that all businesses are facing similar issues. Access to products and supplies, maintaining customer relationships, accelerating sales for some and declining sales for others, health and hygiene are just a few of the unique challenges brought about by COVID.

Many businesses in physical environments have had to swiftly implement changes to significantly reduce safety risks for staff and customers, such as contactless payments, mobile ordering and delivery options. But with these changes come a host of other benefits of digitisation, such as faster transactions, and reduced human error at the point-of-sale.

The reliance on technology, however, can also expose organisations and consumers to certain vulnerabilities. In particular, the risks of fraud and cybercrime have dramatically increased since the onset of the pandemic as scammers have taken advantage of digital technologies to target both businesses and individuals.

As a McKinsey report illustrates, new levels of sophistication in the activities of fraudsters have placed more pressure on companies that have been previously slow to go digital, bringing “into sharp relief how vulnerable companies really are”, and damaging the financial health of small and large businesses. In fact, the Bottomline 2020 Business Payments Barometer reveals that only one in 10 small businesses across the UK report recovering more than 50% of losses due to fraud.

But take these stats with a grain of salt. While it is important to be aware of the risks and challenges this new business landscape brings, it’s equally as important to have a lens firmly across your own business, industry and audience, and to identify the changes you can make internally to mitigate risk as well as improve your customer experience. Where can you make some quick wins? Do you have the right skillsets internally to achieve what you need to achieve? What technology is out there that will enable your business goals? There are tech companies like MYPINPAD that are making huge strides in software development, which will transform businesses globally.

A digital world post-COVID

Almost a year in, the line between business success and failure remains fragile. However, an ongoing transition towards greater digitisation will be the difference between survival and the alternative.

There is a wide range of initiatives businesses can implement to weather this storm. If we look at the space MYPINPAD operates within, secure digital consumer authentication is crucial to the ongoing success and security of not only financial products but also identification and verification across a range of different industry verticals. Shifting the authentication of consumers securely onto mobile devices enables businesses to completely reshape their customer experiences. By bringing together a more seamless, frictionless customer experience, accessibility, privacy, security and access to consumer data, businesses are able to drive digital transformation across day-to-day activities.

Against this backdrop, software with stronger security standards continue to play an ever more vital role in supporting society, protecting consumers and businesses from the increase in risks that rapid digitisation brings. Already, merchants can deploy PIN on Mobile technology from companies like MYPINPAD, onto their smart devices to speed up the digitisation process many are now tackling.

Essentially, opening up universal payments and authentication methods that feel familiar, for both online and face-to-face transactions, will be key to opening up a world of possibilities when it comes to redefining how businesses engage with consumers.

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Brexit responsible for food supply problems in Northern Ireland, Ireland says



Brexit responsible for food supply problems in Northern Ireland, Ireland says 3

LONDON (Reuters) – Food supply problems in Northern Ireland are due to Brexit because there are now a certain amount of checks on goods going between Britain and Northern Ireland, Irish Foreign Minister Simon Coveney said.

British ministers have sought to play down the disruption of Brexit in recent days.

“The supermarket shelves were full before Christmas and there are some issues now in terms of supply chains and so that’s clearly a Brexit issue,” Coveney told ITV.

The Northern Irish protocol means there are “a certain amount of checks on goods coming from GB into Northern Ireland and that involves some disruption,” he said.

(Reporting by Guy Faulconbridge; Editing by Tom Hogue)

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