In recent weeks, the Committee on Foreign Investment in the United States (CFIUS) has been mentioned in news stories around the world, though some reporting missed the mark when discussing CFIUS’s focus and legislative mandate.

CFIUS, which the Treasury Department chairs, plays an important role in the United States’ longstanding open investment policy.  Under this policy, we encourage foreign investment in the United States from all countries and in all sectors of our economy.  Why?  Because foreign investment is vital to job creation, economic growth, and productivity.   As mandated by law, and in furtherance of our open investment policy, CFIUS focuses exclusively on protecting our national security.  Learn more about CFIUS below.

Get the Facts about CFIUS

WHAT is CFIUS?
The Committee on Foreign Investment in the United States (CFIUS) has only one purpose: to review the potential national security effects of transactions in which a foreign company obtains control of a U.S. company.  CFIUS does not consider broader economic or policy concerns when reviewing foreign investments.

WHO is CFIUS?
CFIUS is an inter-agency committee chaired by the Secretary of the Treasury. The members of the committee include the heads of the Departments of State, Defense, Justice, Commerce, Energy, and Homeland Security, as well as the heads of the Office of the U.S. Trade Representative and the Office of Science and Technology Policy.

The Director of the Office of Management and Budget, the Chairman of the Council of Economic Advisors, and the Assistants to ​the President for National Security Affairs, Economic Policy, and Homeland Security are observers.  The Director of National Intelligence and the Secretary of Labor are non-voting, ex-officio members of CFIUS. 

HOW does CFIUS work?
In its national security reviews, CFIUS considers the particular facts and circumstances of each transaction to identify and address the potential national security effects of the transaction. The Committee applies the same rules to each transaction, regardless of the nationality of the investor or the economic sector of the investment.

The CFIUS process contains the following key steps:

·       Filing: When a foreign company is acquiring a U.S. company, the companies may voluntarily file with CFIUS to have the transaction reviewed. The Committee also has the authority to initiate a review of a transaction, whether proposed or completed, that it believes may raise national security concerns.

·       30-Day Review: CFIUS’s initial review of the transaction lasts for up to 30 days. During this period, Committee members review the transaction and may contact the companies for further information.  CFIUS also considers information provided by the intelligence community. Most transactions complete the CFIUS process within this initial 30-day review period, without any change or condition. 

·       45-Day Investigation: If at the end of the 30-day review the Committee requires more time to gather additional information or analyze complex issues, it begins an investigation which may last up to 45 additional days, to complete its national security assessment and make a final decision.  CFIUS members may also discuss steps that the companies may take to mitigate any national security concerns arising from the transaction. The Committee may require that the parties to a transaction implement specified mitigation.

·       Presidential Review: In rare instances, such as when CFIUS has determined that there are national security concerns that cannot be resolved by mitigation, CFIUS may recommend to the President that a transaction be prohibited.  Only the President has the authority to suspend or prohibit a transaction. When CFIUS refers a transaction to the President, the President must make a determination within 15 days. 

In reviewing a transaction, CFIUS considers national security matters and commercially sensitive information provided by the parties.  By law, information filed with CFIUS is subject to strong confidentiality requirements that prohibit disclosure to the public.  Accordingly, CFIUS does not disclose whether parties to any transaction have filed notices with CFIUS, nor does CFIUS disclose the results of any review.  When a transaction is referred to the President, however, the decision of the President is announced publicly.

WHY CFIUS?

The United States must – like any other country – protect its national security.  In reviewing certain foreign investments in the United States, CFIUS’s role in safeguarding national security fosters a stable environment for economic growth and vitality, which in turn benefits measurably from the free flow of foreign investment.  

CFIUS accomplishes its national security mandate in a manner that is wholly consistent with our long standing open investment policy.  CFIUS’s narrow focus on national security, its focus on working to resolve concerns and doing so within tight timelines, its case-by-case approach that does not prejudge a transaction on the basis of the sector or country of origin, and its clearly articulated procedures facilitate foreign investment, while ensuring that our national security is protected.  

You can read more about CFIUS and Treasury’s role as chair of the Committee here​. 

Remarks by Deputy Secretary Neal S. Wolin at the Singapore Exchange

Remarks by Assistant Secretary Marisa Lago on “America’s Continued Commitment to Open Investment”

Holly Shulman is the Spokesperson for International Affairs at the U.S. Department of the Treasury.