Regarding the Acquisition of StayNTouch, Inc. by Beijing Shiji Information Technology Co., Ltd.

This presidential order prohibits the Chinese company Beijing Shiji Information Technology Co., Ltd. from acquiring or maintaining ownership of StayNTouch, Inc., a U.S. hotel technology firm, citing national security concerns. The order mandates divestment of all interests within 120 days (extendable by 90 days), imposes immediate restrictions on access to hotel guest data, requires weekly compliance certifications, and authorizes CFIUS to conduct on-site verification and the Attorney General to enforce the order.

Federal Register Open PDF 85 FR 13719

Impact dates

Date TBD
10 business day waiting period for CFIUS objection to third-party sale
Date TBD
CFIUS verification procedures conclude after divestment certification
Oct 2, 2020
Possible extension of divestment deadline
Jul 4, 2020
Divestment deadline (120 days)
Mar 13, 2020
Data access controls must be in place
Mar 13, 2020
Weekly compliance certifications due

Key directives

Prohibit acquisition of StayNTouch by Beijing Shiji and its subsidiary
Divest all interests in StayNTouch, assets, IP, technology, data, personnel, and customer contracts within 120 days
Implement data access controls within 7 days
Refrain from accessing hotel guest data until divestment verified
Notify CFIUS of intended buyer and wait 10 business days without objection before completing sale
Submit weekly compliance certifications with divestment progress
Submit written certification of completed divestment immediately upon completion
CFIUS authorized to conduct on-site inspections and audits
Attorney General authorized to enforce the order

Who is ordered

Timeline

Immediate

Prohibition of acquisition takes effect
Purchaser barred from accessing hotel guest data through StayNTouch
7-day deadline to implement data access controls
Weekly compliance certifications begin

Near term (90d)

120-day divestment deadline (with possible 90-day extension)
CFIUS review of any proposed third-party buyer (10 business day waiting period)
Potential completion of divestment and certification

Long term

CFIUS verification procedures conclude within 90 days after divestment certification
Potential precedent for CFIUS review of Chinese acquisitions in hospitality technology sector
Ongoing reservation of presidential authority for further orders

Risks & tensions

Uncertainty around whether divestment will occur within 120 days or require extension
Potential difficulty finding qualified U.S.-owned buyer approved by CFIUS
Risk of data access violations during interim period despite controls
Tension between foreign investment openness and national security protection in technology sector
Vague standard for CFIUS 'satisfaction' with divestment verification creates enforcement uncertainty