The Committee On Foreign Investment In The United States (Cfius): A Complete Guide For 2023

What is the Committee on Foreign Investment in the United States?

The Committee on Foreign Investment in the United States, commonly known as CFIUS, is an interagency committee that reviews transactions that could result in control of a U.S. business by a foreign person, in order to determine the effect of such transactions on the national security of the United States.

Why was the CFIUS created?

The CFIUS was created by the Foreign Investment and National Security Act of 2007 to address concerns about foreign acquisitions of U.S. assets. The CFIUS has the power to block deals, require divestitures, or impose conditions on transactions that could pose a threat to national security.

What is the role of the CFIUS?

The CFIUS reviews transactions that could result in control of a U.S. business by a foreign person, in order to determine the effect of such transactions on the national security of the United States. The CFIUS also has the authority to investigate and take action against transactions that have already been completed if they pose a threat to national security.

How does the CFIUS review process work?

The CFIUS review process begins with the submission of a written notice by the parties to the transaction. The CFIUS then conducts a review of the transaction to determine whether it poses a threat to national security. If the CFIUS determines that the transaction poses a threat, it can take a number of actions, including blocking the transaction or requiring the parties to take certain actions to mitigate the threat.

What types of transactions does the CFIUS review?

The CFIUS reviews transactions that could result in control of a U.S. business by a foreign person. This includes mergers, acquisitions, and takeovers, as well as other types of transactions that could result in foreign control of a U.S. business.

What are some recent examples of CFIUS reviews?

In recent years, the CFIUS has reviewed a number of high-profile transactions, including the acquisition of U.S. semiconductor company Qualcomm by Singapore-based Broadcom, and the acquisition of U.S. hotel chain Starwood by China’s Anbang Insurance Group. In both cases, the CFIUS raised concerns about the potential impact of the transactions on national security and ultimately blocked the deals.

What are the consequences of not submitting a notice to the CFIUS?

If a transaction is not submitted to the CFIUS for review and it is later determined that the transaction poses a threat to national security, the parties could face significant consequences, including divestiture of the U.S. business or other penalties.

What are some best practices for dealing with the CFIUS?

When dealing with the CFIUS, it is important to be transparent and proactive in addressing any potential national security concerns. This includes submitting a notice to the CFIUS early in the transaction process and actively working with the CFIUS to address any concerns that arise during the review process.

What is the future of the CFIUS?

As the global economy continues to evolve, the role of the CFIUS is likely to become even more important. It is expected that the CFIUS will continue to play a key role in protecting U.S. national security by reviewing transactions that could result in foreign control of U.S. businesses.

Conclusion

The Committee on Foreign Investment in the United States (CFIUS) plays a critical role in protecting U.S. national security by reviewing transactions that could result in foreign control of U.S. businesses. By being proactive and transparent in dealing with the CFIUS, businesses can help ensure that their transactions are able to proceed smoothly while also protecting U.S. national security interests.

People Also Ask:

1. Can the CFIUS block a transaction?

Yes, the CFIUS has the authority to block transactions that pose a threat to national security.

2. How long does the CFIUS review process take?

The CFIUS review process can take anywhere from 30 to 75 days, depending on the complexity of the transaction.

3. What types of businesses are most likely to be reviewed by the CFIUS?

The CFIUS is most likely to review transactions involving businesses in sensitive industries, such as defense, energy, and telecommunications.

4. Can the CFIUS require parties to a transaction to take certain actions?

Yes, the CFIUS has the authority to require parties to a transaction to take certain actions, such as divesting certain assets, in order to mitigate any national security concerns.