United States National Security Reviews of Foreign Direct Investment:From Classified Programmes to Critical Infrastructure, This is What the Committee on Foreign Investment in the United States Cares About

Abstract

This article explains the inner workings of the Committee on Foreign Investment in the United States (CFIUS) in its national security review of foreign direct investment. CFIUS is often misunderstood. Many suspect it serves economic ends outside of its stated national security purpose and few understand which kinds of cases the US government wishes to have submitted for review. Written from the perspective of an insider, this article explains CFIUS by describing how the Committee fits within US international obligations related to investment, the kinds of issues which raise national security concerns in the review process, and how those concerns are addressed. By assessing a proposed acquisition against the six identified categories of issues which flag an acquisition as being of interest to CFIUS, practitioners may find it more straightforward to understand whether a particular transaction should be notified to the government for review and also how CFIUS reviewing agencies will likely react to a proposed acquisition. The article concludes with policy recommendations to strengthen CFIUS in light of experience since major reforms were implemented in 2008 and also gives advice to those practitioners considering making a CFIUS filing.