The agreement to end the partial government shutdown means that the operations of the Committee on Foreign Investment in the United States ("CFIUS") have resumed. CFIUS's operations had been halted during the shutdown, as required by the Foreign Investment Risk Review Modernization Act of 2018. As a result, CFIUS has resumed its activities reviewing the national security risks to the United States of foreign investment transactions.
For transactions already undergoing the CFIUS process, the resumption of activities will mean that the "clock" will begin running again on CFIUS's review and investigation periods, which can last up to 45 days each. CFIUS will also begin accepting new transactions for review, which it has not done since December 21.
For transactions that require CFIUS review as a closing condition, the government's reopening removes a potential stumbling block. Nonetheless, investors should be aware that even as CFIUS begins to accept new transactions for review, there are likely to be delays in the CFIUS process due to a backlog that has built up over the past month. For example, we expect a substantial extension in the time CFIUS takes to respond to pre-filings or to accept final filings as complete once submitted. In addition, the current funding agreement only lasts until February 15, so an additional closure of CFIUS is possible very soon.
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