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Trends in U.S. National Security Review: A More Active CFIUS
Trends in U.S. National Security Review: A More Active CFIUS
First published in part in The China Dealmaker, March 2011
National security review of foreign acquisitions of U.S. businesses is conducted out of the public eye, in confidential assessments by the Committee on Foreign Investment in the United States (CFIUS). While CFIUS work is decades-old and well developed, recent CFIUS activity and its annual report to Congress suggest a subtle yet important change in CFIUS activity. In particular, over the past two years, CFIUS has become more active. CFIUS has subjected a greater proportion of transactions to 75-day investigations as opposed to 30-day reviews and has been examining consummated mergers and acquisitions.
Readers are no doubt familiar with a recent case that illustrates this trend where CFIUS asserted its little-used authority to investigate post-closing the acquisition by Huawei Technologies Co. (Huawei) of certain technology of 3Leaf LLC (3Leaf), a transaction that was not filed with CFIUS before closing. Upon review and investigation, CFIUS recommended that President Obama unwind the transaction. Though CFIUS reviews are confidential, published statistics demonstrate that a greater portion of foreign investment transactions in select areas are undergoing greater scrutiny by CFIUS. Also, some believe that heightened CFIUS scrutiny is unreasonably targeting Chinese investment in the U.S. Read the entire article here.
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