CFIUS Reviewing Fewer Deals, Taking Longer, Imposing More Mitigation

Brandon Van Grack spoke to Foreign Investment Watch about the Committee on Foreign Investment in the United States’ (CFIUS) latest report to Congress, which details the Committee’s caseload and operational speed, and offers insights on the types of transactions it has seen over the last calendar year.

According to Brandon, the Committee is increasingly scrutinizing transactions and seeking mitigation. “There are fewer transactions clearing in the declaration process, more notices proceeding to investigation, and more mitigation agreements,” he said, adding that this all signals that the Committee is becoming more sensitive to potential vulnerabilities, needs more time to conduct diligence, and is more willing to take steps to address perceived national security concerns. “For practitioners and the industry, that means the consequences of not anticipating those national security concerns and strategically positioning the transaction are more significant than ever,” Brandon noted.

Brandon also said that the market shouldn’t focus on the fact that no penalties were imposed in 2022. “There’s a process that has seldomly been used and takes a while to work through, and which is likely paired with a greater appetite for penalties from CFIUS. Assistant Secretary Rosen has confirmed that there are multiple penalties in the pipeline; it’s just a matter of finalizing and announcing them.”

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