CFIUS and Foreign Investment Reviews
Foreign investment in U.S. companies—from textiles to satellites—can trigger a national security review. Assessing your risk early can prevent delays, avoid derailing your negotiations, and prevent post-closing complications.
More inbound foreign investment comes into the United States than any other country. But the government must approve these investments before they can proceed. Deciding whether to notify CFIUS of your transaction, and solicit their review, is a critical step in any deal involving foreign investment. And with enforcement and penalties on the rise, you cannot assume your deals are beyond CFIUS’s purview.
Practical Strategies for Managing CFIUS Review
Kelley Drye attorneys offer regulatory and strategic counsel on foreign investment matters, including the rules and practicalities of the CFIUS review process and helping with mitigation agreements. This includes:
- Pre-transaction due diligence to determine if your foreign investment deal is a “covered transaction”
- Deciding whether to voluntarily notify CFIUS and initiate a review
- Preparing the joint notification to CFIUS
- Working with the designated lead agencies during initial reviews and follow-up investigations
- Negotiating any required mitigation agreements to address perceived national security risks associated with foreign ownership, control, or influence
- Establishing trust agreements when divestment by foreign owners is required
- Assisting with matters subject to Team Telecom, the Defense Counterintelligence and Security Agency, and the Department of Energy
- Providing clients with government relations advocacy including liaising with Congressional offices where necessary
Don’t Let Your Deal Unravel
In any transaction with the potential to involve a foreign buyer or investor, a brief consultation with CFIUS counsel at the outset can help identify risks and avoid delays and expenses associated with CFIUS review. CFIUS clearance is the only way to ensure that CFIUS will not force post-transaction unwinding or other mitigation steps, which, if required, are typically more disruptive than the review and investigation process.
Kelley Drye’s interdisciplinary team includes a former member of the National Security Council staff who served on CFIUS, a former member of the U.S.-China Economic and Security Review Commission, former employees of the Department of Commerce, State Department, the Office of the United States Trade Representative (USTR), the Federal Communications Commission (FCC), as well as several individuals who formerly served in Congress or as Congressional staffers.
We also engage regularly with U.S. government agencies on national security matters on behalf of our clients, including the Departments of Treasury, State, Defense, Commerce, Justice, Homeland Security and Energy, the FCC, and others.