CFIUS’s New Tools to Review: Foreign Investments in US Businesses and Real Estate

Abstract

While US policymakers continue to recognize the many economic benefits of foreign investment in the United States, their growing concerns over foreign control of or access to sensitive US technologies, infrastructure and personal data led to a significant expansion of the US Government’s powers to review inbound foreign acquisitions and investments from a national security perspective. The Foreign Investment Risk Review Modernization Act (“FIRRMA”) was enacted into law in August 2018 to better equip the Committee on Foreign Investment in the United States (“CFIUS”) to meet increased potential threats posed by foreign direct investments in US businesses and real estate. FIRRMA also updated CFIUS’s statutory authority to align it more closely with the evolution of CFIUS statutory interpretations and practices in certain respects since the last major overhaul of CFIUS’s authority in 2007. In February 2020, two sets of final regulations implementing FIRRMA became effective: (1) those generally applicable to covered transactions, including non-controlling investments (the “Final Investment Regulation”) and (2) those applicable to covered real estate transactions (the “Final Real Estate Regulation”) .