Deciding whether to file
The Committee on Foreign Investment in the United States, chaired by the Treasury Department, reviews certain foreign investments in U.S. businesses, and some real estate transactions, for national security risk. For many transactions a filing is voluntary, and the parties weigh the protection that clearance brings against the time and cost of a review. For some, particularly those involving certain critical technologies or certain foreign government interests, a filing is mandatory, and failing to file can lead to penalties. CFIUS can also look at transactions that were never filed, including after closing, so a decision not to file should be reasoned and documented.
Information the review will ask for
A CFIUS filing asks for detailed information about the investor, its ownership chain and governance, and the U.S. business, including its products, customers, government contracts, data holdings, and facilities. The information has to be accurate and complete, and false or misleading statements carry serious consequences. Gather capitalization tables, organizational charts, export control classifications for the U.S. business's products and technology, and a description of any sensitive personal data the business holds. Personal information about key individuals on the investor side is often requested as well, so it helps to collect it early rather than during the review.
Compliance after clearance
Clearance sometimes comes with a mitigation agreement or conditions, such as limits on the investor's access to certain information, appointment of a security officer, or periodic reporting. These obligations continue after closing, and CFIUS and the agencies that monitor mitigation take breaches seriously; the penalty framework has been strengthened in recent years. When we work with you on CFIUS compliance, we look at whether a filing is required or advisable, prepare the filing with you, and help set up the internal steps needed to keep any mitigation terms on track. We cannot predict how CFIUS will view a transaction, but we can make sure you understand the issues it is likely to examine.
