The Congressional Research Service ("CRS") provided an overview of the authority of the Committee on Foreign Investment in the United States ("CFIUS") following the implementation of the Foreign Investment Risk Review Modernization Act of 2018 ("FIRRMA").
As previously covered here and here, the regulations implementing FIRRMA expanded CFIUS's review of transactions beyond those concerning mergers, acquisitions or takeovers that could result in the foreign "control" of a U.S. business. FIRRMA and its implementing regulations expanded CFIUS's jurisdiction to include several types of noncontrolling transactions related to so-called "TID" (or "Technology, Infrastructure and Data") businesses involving (i) critical technologies subject to certain export controls, (ii) critical infrastructure, such as telecommunications and public utilities, or (iii) the "sensitive personal data" of U.S. citizens, such as financial or health information. The statute and regulations also provide CFIUS with the authority to review certain real estate transactions. FIRRMA also introduced mandatory declaration requirements for certain types of covered transactions, including those in which a foreign government has a "substantial interest." The final rules went into effect on February 13, 2020.
CRS highlighted various aspects of CFIUS's internal structure, in addition to several regulatory initiatives. CRS described FIRRMA as the most "comprehensive revision" of CFIUS's foreign investment review process since the implementation of the Foreign Investment and National Security Act (FINSA) in 2007. CRS also provided background, among other things, regarding (i) previous attempts to amend CFIUS, (ii) the impact of foreign investment on the economy, and (iii) the U.S. government's stance on foreign investment policy.
Commentary Keith Gerver
This latest update to CRS's series on CFIUS is a helpful resource for both seasoned practitioners and laypeople who want to have a nutshell understanding of what is becoming a more complex regulatory regime. CRS reports also frequently tee up potential hearing and oversight issues for Congress. While CFIUS oversight may not make it into a crowded election year oversight agenda, foreign investment, especially from China, remains a hot topic for Members of Congress.
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