How SenseTime And a US Law Firm Got Around US Treasury Sanctions
SenseTime says its US shareholders do not have to divest, despite the US Treasury placing the company on a US investor blacklist earlier this month, showcasing how the firm's US lawyers help it escape the full impact of sanctions.
SenseTime's lawyers at NYC firm Hughes Hubbard & Reed argue that because the Treasury Department did not explicitly list their Cayman Islands entity, that sanctions do not apply to the IPO.
SenseTime, which IPO'd today after a sanctions-caused delay, has prominent US investors such as Qualcomm, Silver Lake, and Fidelity. Thanks to HHR, SenseTime has also gotten around Commerce Department's Entity List.
In this post, IPVM examines this workaround and the risks and benefits for SenseTime.
Treasury ********* *******
** ******** **, *** ** ******** Department's ****** ** ******* ****** *** Control********** ************* "******* ***** ****** *****", ************ its****** *************** ********* *********, ** *********** ** a ******* ********-********** ******* ******* (****). **** **** "******** ** ****" ** ** ******* ** ***** PRC *********' ****** ***** *** ***** existing ** ********* * **** ** divest.
SenseTime/HHR ********** ********
***** *** *********,*** ***** * ********** ********* *** ** **** "*** been **********" ******* **** ********** ********* Group *******, *** **** **** **********, while *** ******* ***** ** ** public ** *********'* ****** *******-***** ******, SenseTime ***** ***:
***** ** **** ****** **** ***,********* ******* ******** **** "**** *** ******** any ****** ****** ******" **** ****** SenseTime ***** *** **** ** *** "existing [**] ************" **** "********** ** own" *** ******:
VIE ****** ******* *********
******* *** *** ******* ********* ********** from ****** ****** ** *** ***** in *** ******, **** *** ******** sector, *** ********* ******* ** *** outside ******** ***** ********* *** ** a ******** ******** ****** (***) '******' company ********. ***** *** ***** ********* owned ** ********* **** **** ********* with *** *** *******, *** ** not *********** *** ****** ** *** company ******. **** ********* ****** *** tech ***** ** "********** ******* ************ on ******* *********** ** ******** **********", the*** ********.
SenseTime ******** *** ** *********, *** ***** ******** ****
********* ***************** ********* ** "******* *** ********", i.e. *** ** *** ******** *** Cayman ******* ******, ** ** ******* to ******* ** ********* **** *** IPO ******:
*******, **** **** *** ****** *********'* existing ** ************, ******* **** - according ** ********* - *** ** investors **** ** ************** ** ******. Per *** **********, ******* ** *********/** firms *** ***** ********* ************:
- ** ********** ******* * *.**% ***** ****** ** SenseTime's *** ******* ***********.
- ** ******* ********** * *.**% ***** ****** ** SenseTime's *** ******* ***********.
- ********* ******** **************** * *.**% *****.
- ************* *********************** * *.**% *****.
Impact ********
**** **********, ********* ** ***, ****** SenseTime ** **** *** ******** ** shareholders. **** ******* * ***** ****** for ***** *********, *.*. ******* ** persons **** ******/********* *** **** ** blacklisted *** ********* *** ** *** "******* *** ************* *******" **** **** ** ** "******** security, ******* ******, *** *******".
*******, ** ** ******* ** *********'* US ************ **** ******** **** **** of ***'* ***** ******** *** **** on ** ***** ******, *** ** the **** ** **** ****** ****** SenseTime's ******* ****** ** ****** ***** with ***'* *********.*********'* ***** **** **** **%** *** **** **** *** *****, indicating ********* ******** ********* *** ****** divestment * **** ********** ******.
Showcases ** ******* *******
** ******,********* ********** ** ***** **** ********* ** technology ******* *** ******** ****** ******* sanctions (***** ***** ** *** '****** List'), ***** ** * ******* ******** by *** **** **** * ********** had **** ***********. ** ***, **** loophole ******* ****** ** *** ******** Department *** *** ** ********* ****** ****** ********* **.
***, **** ***** ****** ** ***, SenseTime **** ** *** **** *** US ********* ******* ***** ***** ** the ********'* *********. **** ******** *** risks *** ********* *** **** ****** questions ***** *** *************/************** ** ** sanctions.
*********
**** ******* *** ** *********, ********, Silver ****, ********, *** *** *******, but *** *** ******* * ********; if *** ***** ** **** ******.
********** *** ******** **** *** ******* or ****** *** ****** ** *** order *** *** ** ********* *** the ** ******** ********** ** **, especially ***** ** ******** *** ******, original *********, *** ************** ** *** sanction.
**** ***** ** **** ** ********** is *** ***** ********, ****** ****, and ******** ** *** ***** ********* want ** **** ***** *******, ** be ********** **** *** ********** **** could ****** *** **** **** ** business ** ***** ************?
********* **** * *** ** ************* in *** ******* ******* **** ***’* support ********** ********* ***** ****** ** the ********** **** **** ** ********. Even ** *** ********* **** *******, why **** *** ****? ** ********* address *** **** **** *** ****** the *****. **** ** ******** ***** suggest ** ********.
**** **** ** ************ ******** ******** an ******* ********** ** *** ********* companies **** ******** *** ********* ** free ********** *** ********** **** ** a ******** ****, ** ******* ***** rights, **********, ******, *** *******.
* ***** ** **** **** **** come **** ******** *** **** ** their *** ****-***.
** **** ***** ** ****** ** that ******** * ********** ******* ** share **** ******* ********* ********** ** the *** **** ***** ** ******** their ********, ** **** *** ***** that **** ***** ** ***** *** freedom *** ***** ****** ** ***** individual.
******’* ** ** ******* ** **** will ** *** **** ** ***** the ******** ** ****** ** **** world *** ***** *** ***** ********** freedom *** ***** ******, **** **** together *** ********* *** ** ******* members ** *** ** ****** ***** point ** ****.
** **** ** ******** .. *****?
***** *** **** !