United States FDI (CFIUS) control
Produced in partnership with Shearman & Sterling
United States FDI (CFIUS) control

The following Competition practice note produced in partnership with Shearman & Sterling provides comprehensive and up to date legal information covering:

  • United States FDI (CFIUS) control
  • 1. What is the applicable legislation?
  • 2. Which government or other body (or bodies) reviews foreign investments?
  • 3. What is the scope of the foreign investment regime? Does it only apply to specific sectors or types of investors (eg foreign or non-EU / non-WTO)? Are there specific rules for certain types of investors (eg state-owned enterprises)?
  • 4. What are the triggers or thresholds for the regime to apply? What types of transactions are caught? Is there a minimum level of shareholding or a control test that applies?  Are there any other thresholds that need to be met (e.g. based on turnover or market shares)?
  • 5. Are there any exceptions that may apply?
  • 6. Is there any discretion to review transactions that do not meet any thresholds for review?
  • 7. What are the grounds for review (eg public or national security or other grounds)?
  • 8. What level of discretion do the relevant authorities have to approve or reject transactions? Is there scope for any other body to intervene?
  • 9. Where a transaction is caught by the regime, is notification mandatory and must closing be suspended pending clearance?
  • More...

United States FDI (CFIUS) control

A conversation with John Beahn, partner, Robert LaRussa, counsel, and Lisa Raisner, head of government relations, in the Washington DC office of global law firm Shearman & Sterling, on key issues on the CFIUS regime for controlling foreign direct investment (FDI) in the United States of America.

1. What is the applicable legislation?

The Committee on Foreign Investment in the United States (CFIUS or Committee), which conducts US national security reviews of certain foreign acquisitions of and investments in US businesses, operates pursuant to Section 721 of the Defense Production Act of 1950 (50 U.S.C § 4501 et seq.), as amended most recently by the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), and as implemented by Executive Order 11858 and the regulations at chapter VIII of title 31 of the Code of Federal Regulations.

2. Which government or other body (or bodies) reviews foreign investments?

The Committee on Foreign Investment in the United States is the primary US governmental body responsible for reviewing inbound foreign investments. CFIUS is an interagency committee chaired by the US Treasury Department that includes members from the US Departments of Justice, Defense, Homeland Security, Commerce, State, and Energy, as well as the United States Trade Representative and the White House Office of Science and Technology Policy. The Department of Labor and the Director

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