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Tue, Sep 27, 2022 3:31 PM

National Security And Business Growth

It’s a worst-case scenario, but an increasingly common one. Just this year, three large foreign investment deals were undone due to scrutiny from the Committee on Foreign Investment in the United States, or CFIUS, the federal interagency committee charged with reviewing certain mergers, acquisitions and other foreign direct investment in the United States that might pose a national security risk. One of these occurred more than three years after the foreign buyer’s initial controlling investment. This kind of government action could become more common as economic security and personal information, for example, are increasingly seen as matters of potential national security by the formerly obscure committee.

And the reach of CFIUS is getting longer. Just last week, the U.S. Department of Treasury proposed new regulations that would further implement a new law that expands CFIUS’s ability to review and undo transactions involving real estate, sensitive personal data and critical technologies.  

Created years ago by executive order, today, CFIUS is vested with broad statutory authority, including the ability to upend carefully negotiated deals, even potentially recommending that the president should suspend, block or undo the transaction based on unresolved national security risks. Chaired by the secretary of the Treasury, its members also include the secretaries of Homeland Security, Commerce, State, Energy, and Defense, as well as the U.S. attorney general, the U.S. trade representative, and the director of the White House Office of Science and Technology Policy. Usually one or two agencies take the lead in reviewing a case depending on the subject matter, but overall, more than a dozen federal agencies keep tabs on the process and can weigh in on decisions. 

https://www.forbes.com/sites/paulrosen/2019/09/25/national-security-and-business-deals-what-every-company-needs-to-know-about-cfius/?sh=12cc664b4594

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