When national security review comes into play
National security review of inbound deals is handled by an interagency body, the Committee on Foreign Investment in the United States, known as CFIUS, which looks at certain foreign investments in US businesses and some real estate transactions. Filing is mandatory for some deals, particularly those touching certain sensitive technologies or involving investors linked to foreign governments, while for many others it is voluntary. The committee can also reach out about transactions that were never filed, including deals that closed some time ago. Review can end with clearance, with conditions set out in a mitigation agreement, or, in rare cases, with a recommendation that the President block or unwind the deal. Minority investments can be covered when they come with certain governance or information rights, so the review is not limited to full acquisitions.
Information the review will ask for
Prepare a clear picture of the investor's ownership chain, including any government ownership or influence, and of the target's products, customers, and data. Government contracts, export-controlled technology, and sensitive personal data held by the target are areas the committee often asks about. The investment documents should show what governance and information rights the investor will actually have. Facilities located near military or other sensitive government sites can bring real estate rules into play. Answers given to the committee need to be accurate and consistent with other filings, because the review relies on them and later discrepancies can cause serious problems.
Early questions we work through
We start by assessing whether a filing is mandatory, advisable, or unnecessary, and whether a short declaration or a full notice suits the deal. Deal documents often need to address who bears the risk of a long review, what happens if mitigation terms are imposed, and whether either side can walk away. Some investors restructure their rights, for example by giving up certain board or access rights, to reduce exposure. Newer federal rules also restrict some outbound investments by US persons in certain foreign technology sectors, which matters for US funds with overseas portfolios. For investors facing a non-notified inquiry, we focus on organizing a complete and careful response.
