While 2017 was an evolutionary year for the Committee on Foreign Investment in the United States ("CFIUS"), 2018 portends to be a revolutionary year. A number of factors, including a new President, growing concerns over Chinese investments in the United States, and an unprecedented number of filings, resulted in evolving CFIUS practices as a matter of policy and necessity. The policy evolution culminated in the November 2017 bipartisan and bicameral introduction of the Foreign Investment Risk Review Modernization Act of 2017, which could bring revolutionary changes to the law and CFIUS practice in 2018 and beyond.
BRIEF INTRODUCTION TO CFIUS AND THE CFIUS PROCESS -
CFIUS is an interagency committee of the U.S. government that has the authority to review so-called “covered transactions”— i.e., transactions by or with any foreign person that could result in control of a U.S. business by a foreign person. Thus, CFIUS has jurisdiction over the acquisition of a U.S.-based company by a foreign person and the acquisition of a non-U.S. based company by a foreign person if the non-U.S.-based company has operations in the United States that constitute a U.S. business. Although CFIUS has been in existence since a 1975 Executive Order, CFIUS was formally established in statute more than a decade ago in connection with enactment of the Foreign Investment and National Security Act of 2007 (“FINSA”), which amended section 721 of Defense Production Act of 1950.
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