Updated February 5, 2019
The Committee on Foreign Investment in the United States
Overview
a foreign investor, the CFIUS process can proceed
What is CFIUS? The Committee on Foreign Investment in
potentially through three steps.
the United States (CFIUS) is an interagency committee that
serves the President in overseeing the national security
implications of foreign investment in the economy. It
Key CFIUS Requirements. The President can exercise
reviews foreign investment transactions to determine if: (1)
his authority to suspend or prohibit a foreign
they threaten to impair the national security; (2) the foreign
investment, subject to a CFIUS review, if he finds that:
investor is controlled by a foreign government; or (3) the
(1) credible evidence exists that the foreign investor
transaction could affect homeland security or would result
might take action that threatens to impair the national
in control of any critical infrastructure that could impair the
security (based on nature of threat; vulnerabilities; and
national security. The President has the authority to block
consequences); and (2) no other laws provide
proposed or pending foreign investment transactions that
adequate and appropriate authority for the President
threaten to impair the national security.
to protect the national security.
What is the Source of CFIUS Authority? CFIUS initially

was created and operated through a series of Executive
Orders. In 1988, Congress passed the “Exon-Florio”
(1) National Security Review: The Committee is required to
amendment to the Defense Production Act (50 USC App
conduct a 45-day national security review if: a) the
sect. 2170), which codified the CFIUS review process due
investment threatens to impair the national security of the
in large part to concerns over acquisitions of U.S. defense-
United States, including homeland security, critical
related firms by Japanese investors. In 2007, amid growing
infrastructure, and critical technologies; and b) the
concerns over the proposed foreign purchase of commercial
transaction would result in foreign control of a U.S. entity.
operations of six U.S. ports, Congress passed the Foreign
Investment and National Security Act of 2007 (H.R. 556 /
The Secretary of the Treasury can exempt a transaction
P.L. 110-49) to create CFIUS in statute. This statute was
from review if he determines that the transaction will not
amended again in 2018 with the Foreign Investment Risk
impair the national security. During the 45-day review, the
Review Modernization Act of 2018 ( FIRRMA) (Title XVII,
Director of National Intelligence is required to investigate
P.L. 115-232), The United States is both the largest
the national security implications of any proposed foreign
recipient of foreign investment and the largest foreign
investment transaction.
investor in the world.
In a national security review, CFIUS is required to consider
What is the Membership of CFIUS? The Committee
12 specific factors, including: (1) domestic production
consists of nine members, including the Secretary of the
needed for current and projected national defense
Treasury, who serves as chair, the Secretaries of State,
requirements; (2) the control of domestic industries and
Defense, Homeland Security, Commerce, and Energy; the
commercial activity by foreign citizens; (3) potential sales
Attorney General; the United States Trade Representative;
of military goods, equipment, or technology to a country
and the Director of the Office of Science and Technology
that supports terrorism or proliferates missile technology or
Policy. The Secretary of Labor and the Director of National
chemical and biological weapons; (4) U.S. technological
Intelligence serve as ex officio members of the Committee.
leadership in areas affecting U.S. national security; (5)
critical infrastructure, major energy assets and critical
Executive Order 13456 (January 2008) added five White
technologies; and (6) such other factors as the President or
House representatives, including the Director of the Office
the Committee determine to be appropriate.
of Management and Budget and the Assistant to the
President for National Security Affairs. The President can
(2) National Security Investigation. If any member of
also appoint other Executive officers to serve on the
CFIUS determines that a foreign investment transaction
Committee on a case-by-case basis.
threatens to impair the national security, the transaction
The CFIUS Review Process
undergoes a more comprehensive 45-day national security
investigation. During this investigation, CFIUS and the
CFIUS’s review process is a voluntary system, in most
transactors can develop and adopt mitigation procedures
cases, of notification by investors. Firms largely comply
that are designed to address national security concerns.
with the provision, because foreign acquisitions that do not
notify the Committee remain subject indefinitely to
(3) Presidential Determination. If CFIUS concludes that a
divestment or other actions by the President. Upon
proposed foreign investment transaction threatens to impair
receiving a declaration or a written notification of a
the U.S. national security and adequate mitigation
proposed acquisition, merger, or takeover of a U.S. firm by
procedures were not reached, it can recommend that the
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The Committee on Foreign Investment in the United States
President suspend or prohibit the proposed merger,
critical infrastructure that would affect United States
acquisition, or takeover. The President has 15 days to make
leadership in areas related to national security.
a determination and exercise his authority to take such
action for such time as he considers appropriate to suspend
CFIUS is required to brief certain congressional leaders
or prohibit any foreign investment transaction that threatens
upon request and to report annually to Congress on any
to impair the national security of the United States. Such
reviews or investigations it conducted during the year (see
determinations by the President are not subject to judicial
Table 1). The data indicate that of the 782 foreign
review.
investment transactions between 2008 and 2014, 38
transactions were halted during the review process, 267
Recent Activity
transactions were investigated for national security
Investment transactions that attracted public and
concerns, and one transaction was blocked by the President.
Congressional attention include the Chinese firm Sany
Group acquired in 2012 a wind farm project in Oregon by
Table 1. Foreign Investment Transactions Reviewed
Ralls Corp. without reporting the transaction to CFIUS.
by CFIUS, 2008-2015
Subsequently, CFIUS retroactively reviewed the transaction
and directed Ralls to desist due to objections by the U.S.
Notices
Navy over the placement of wind turbines near or within
With-
restricted Naval Weapons Systems Training Facility
drawn
No. of
Presi-
airspace. President Obama approved CFIUS’s
No. of
During
Investi-
dential
determination and blocked the investment. Ralls filed a suit
Year
Notices
Review
gations
Decisions
challenging the decision to block the investment; the
2008
155
18
23
0
District Court ruled against Ralls, but Ralls appealed. The
Appeals Court ruled that Ralls’ due process rights had been
2009
65
5
25
0
violated because it had not been given access to the
2010
93
6
35
0
unclassified evidence on which the President relied and an
opportunity to rebut the evidence before the President
2011
111
1
40
0
reached his determination.
2012
114
2
45
1
In 2016, Dutch electronics firm Phillips terminated a $2.9
2013
97
3
48
0
billion sale of controlling interest in its Lumileds unit, with
over 600 patents and operations in the United States, to a
2014
147
3
51
0
consortium of Chinese investors due to its inability to
2015
143
3
66
0
mitigate concerns raised by CFIUS. In December 2016,
Phillips announced that it had agreed to sell its Lumileds
Total
925
41
333
1
unit for $2 billion to affiliates of Apollo Global
Source: Annual Report to Congress, Committee on Foreign Investment
Management, an asset management firm.
in the United States, September 2017.
In December 2016, President Obama blocked a second
Issues for Congress
foreign investment transaction. The Presidential action
The CFIUS process for reviewing certain foreign
blocked the Chinese firm, Fujian Grand Chip Investment
investment transactions has raised a number of questions
Fund, from acquiring Aixtron, a German-based
for Congress, including:
semiconductor firm with assets in the United States.
 How well is CFIUS balancing the traditionally open
In September 2017, President Trump blocked the $1.3
U.S. investment climate with the requirement to protect
billion proposed acquisition of Lattice Semiconductor by
U.S. national security?
the Chinese investment company, Canyon Bridge Capital

Partners; in March 2018, President Trump blocked the
Should food security play a role in a CFIUS deliberation
acquisition of Qualcomm by Singapore-based Broadcom.
to protect U.S. critical infrastructure?
 How should CFIUS balance the requirement to protect
FIRRMA made a number of changes to CFIUS’ role by: (1)
critical technology from foreign acquisition with the
expanding CFIUS’s reviews of certain real estate
need to support an open, market-driven economy?
transactions in close proximity to a military installation or
U.S. government facility or property of national security
More Information
sensitivities; (2) including reviews of joint ventures; (3)
For more information see CRS Report RL33388, The
reviewing any non-controlling investment in U.S.
Committee on Foreign Investment in the United States
businesses involved in critical technology (including
(CFIUS), by James K. Jackson. Also, see CRS Report
emerging and foundational technologies), critical
RS21857, Foreign Direct Investment in the United States:
infrastructure, or collecting sensitive data on U.S. citizens;
An Economic Analysis, by James K. Jackson.
(4) shifting the filing requirement for foreign firms from
voluntary to mandatory in certain cases; and (5)
James K. Jackson,
discriminating among foreign investors by countries of
“special concern” that are acquiring critical technologies or
IF10177
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The Committee on Foreign Investment in the United States


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