The U.S. Department of the Treasury described “CFIUS,” the acronym for the Committee on Foreign Investment in the United States as follows: “CFIUS is an interagency committee authorized to review certain transactions involving foreign investment in the United States and certain real estate transactions by foreign persons, in order to determine the effect of such transactions on the national security of the United States.” See U.S. Treasury website.
CFIUS is able to operate, pursuant to Section 721 of the Defense Production Act of 1950, and as implemented by Executive Order 11858 as amended, and pursuant to the Regulations found at Chapter VIII, Title 31 of the United States Code of Federal Regulations.
Recently, CFIUS issued a Notice regarding its Proposed Rulemaking with respect to some of its procedures, penalties, and enforcement authority. The public comment period for this Rulemaking will close in mid-May.
Here is that proposed Rulemaking in a nutshell:
First, a required timeframe for parties to respond to mitigation terms proposed by CFIUS would be set. The new Rule would mandate that parties provide substantive responsive to proposed mitigation terms in three business days, absent the grant of an extension. Such a substantive response would be one that accepts the proposed terms, or proposes other terms, or explains why compliance with the terms is not possible.
Second, the proposed new Rules would increase the maximum possible civil monetary penalties. This is an attempt to deter, and well as punish, violations. In addition, the circumstances giving rise to the imposition of penalties would be broadened. Furthermore, the time period for parties to submit a Petition regarding a Notice of Imposition of Penalty would be increased.
You can also click or cut and paste to the following links for more detailed information:
- Amendments to Penalty Provisions, Provision of Information, Negotiation of Mitigation Agreements, and Other Procedures Pertaining to Certain Investments in the United States by Foreign Persons and Certain Transactions by Foreign Persons Involving Real Estate in the United States
- Treasury Press Release
Michael Leonard
Leonard Trial Lawyers
May 6, 2024