In its annual report to Congress, the Committee on Foreign Investment in the United States highlighted a remarkable year in 2022, with a historic number of reviews and increased focus on non-notified transactions to address national security risks effectively. The U.S. Department of the Treasury functions as the CFIUS chair.
“In 2022, the Committee continued to review record numbers of filings. We sharpened due diligence on investors, tackled sophisticated technologies and national security risks, and launched a number of reviews to assess potential non-compliance with CFIUS regulations,” Assistant Secretary for Investment Security Paul Rosen said in a July 31 Treasury news release.
According to the report, CFIUS reviewed an all-time high of 440 notifications and disclosures relating to covered transactions and covered real estate transactions. The Foreign Investment Risk Review Modernization Act (FIRRMA) extended the jurisdiction of CFIUS, made certain reports obligatory and improved the mechanisms for identifying transactions that had not been reported.
In 154 of the cases, the parties concerned chose to employ a shorter form of declaration, but in 286 of the cases, they opted for a lengthier and more complete notification technique, as the report explains in greater detail.
CFIUS demonstrated it is capable of efficiently handling a large number of reviews by granting approval to a significant proportion of them. Almost 58% of independent transactions were investigated during the initial review period of 45 days for a notification or the term of 30 days for a declaration, the report said.
CFIUS dramatically turned its focus toward non-notified transactions in an effort to identify and resolve concerns to national security presented by foreign investments that have avoided past inspection, according to the release. This effort is being made in an effort to find and resolve these dangers.
For instance, the Committee came to the conclusion in January 2022 that New Zealand qualified as a "excepted foreign state," and that Australia and Canada qualified as excepted foreign states and would continue to qualify as such in the absence of subsequent action from the Committee and notice in the Federal Register, the release said.
Despite the fact that numerous evaluations were carried out, the report highlighted the fact that no executive actions were taken on any of the transactions that occurred throughout the year. However, it is important to highlight the fact that numerous deals were voluntarily abandoned or divested as a result of the national security judgments reached by CFIUS. This demonstrates the Committee's importance in preserving the interests of the nation, the release said.