January 2018 CFIUS Legislative Update -

The Committee on Foreign Investment in the United States (CFIUS), an inter-agency committee authorized to review transactions that could result in control of a U.S. business by a foreign person, is the primary tool available to the U.S. government to review foreign investments. Recently, CFIUS has more closely scrutinized foreign investments, especially from certain jurisdictions, such as China, and has increasingly recommended to the President that he officially reject proposed transactions for national security reasons. In the last year, parties have also abandoned several transactions, reportedly due to concerns about whether the transaction could withstand the CFIUS review process. These developments have occurred within the context of calls for a more robust review of foreign investment into the United States, coming from various sources within the U.S. government, including from, as we previously outlined, a Department of Defense commissioned report and several members of Congress.

Pending legislation introduced by Senator John Cornyn (R-TX) and co-sponsored by a bipartisan group of high-ranking Senators would subject even more transactions to a higher level of CFIUS review than under current law. The proposed legislation was introduced in the Senate and the House of Representatives in November 2017 and is called the Foreign Investment Risk Modernization Act (FIRRMA). FIRRMA would expand the definition of covered transactions for purposes of CFIUS review to include...