Updated August 6, 2019
The Committee on Foreign Investment in the United States
Overview
either an expedited declaration (15 days for review) or a
What is CFIUS? The Committee on Foreign Investment in
written notification (30 days for review; involves foreign
the United States (CFIUS) is an interagency committee that
persons in which a foreign government has, a substantial
serves the President in overseeing the national security
interest) of a transaction in a U.S. firm involved in specified
implications of foreign investment in the economy. It
industries. Declarations and written notices are
reviews foreign investment transactions to determine if: (1)
distinguished according to three criteria: the length of the
they threaten to impair the national security; (2) the foreign
submission, the time for CFIUS’ consideration of the
investor is controlled by a foreign government; or (3) the
submission, and the committee’s options for disposition of
transaction could affect homeland security or would result
the submission
in control of any critical infrastructure that could impair the
national security. The President has the authority to block
Key CFIUS Requirements. The President can exercise
proposed or pending foreign investment transactions that
his authority to suspend or prohibit a foreign
threaten to impair the national security.
investment, subject to a CFIUS review, if he finds that:
(1) credible evidence exists that the foreign investor
What is the Source of CFIUS Authority? CFIUS initially
might take action that threatens to impair the national
was created and operated through a series of Executive
security (based on nature of threat; vulnerabilities; and
Orders. In 1988, Congress passed the “Exon-Florio”
consequences); and (2) no other laws provide
amendment to the Defense Production Act (50 U.S.C. App
adequate and appropriate authority for the President
sect. 2170), which codified the CFIUS review process due
to protect the national security.
in large part to concerns over acquisitions of U.S. defense-
related firms by Japanese investors. In 2007, amid growing
concerns over the proposed foreign purchase of commercial
(2) National Security Review: In the second step, the
operations of six U.S. ports, Congress passed the Foreign
committee is required to conduct a 45-day national security
Investment and National Security Act of 2007 (H.R. 556 /
review if: a) the investment threatens to impair the national
P.L. 110-49) to create CFIUS in statute. This statute was
security of the United States, including homeland security,
amended again in 2018 with the Foreign Investment Risk
critical infrastructure, and critical technologies; and b) the
Review Modernization Act of 2018 (FIRRMA) (Title XVII,
transaction would result in foreign control of a U.S. entity.
P.L. 115-232), The United States is both the largest
recipient of foreign investment and the largest foreign
The Secretary of the Treasury can exempt a transaction
investor in the world.
from review if he determines that the transaction will not
impair the national security. During the 45-day review, the
What is the Membership of CFIUS? The committee
Director of National Intelligence is required to investigate
consists of nine members, including the Secretary of the
the national security implications of any proposed foreign
Treasury, who serves as chair, the Secretaries of State,
investment transaction.
Defense, Homeland Security, Commerce, and Energy; the
Attorney General; the United States Trade Representative;
In a national security review, CFIUS is required to consider
and the Director of the Office of Science and Technology
12 specific factors, including: (1) domestic production
Policy. The Secretary of Labor and the Director of National
needed for current and projected national defense
Intelligence serve as ex officio members of the committee.
requirements; (2) the control of domestic industries and
commercial activity by foreign citizens; (3) potential sales
Executive Order 13456 (January 2008) added five White
of military goods, equipment, or technology to a country
House representatives, including the Director of the Office
that supports terrorism or proliferates missile technology or
of Management and Budget and the Assistant to the
chemical and biological weapons; (4) U.S. technological
President for National Security Affairs. The President can
leadership in areas affecting U.S. national security; (5)
also appoint other Executive officers to serve on the
critical infrastructure, major energy assets and critical
committee on a case-by-case basis.
technologies; and (6) such other factors as the President or
The CFIUS Review Process
the committee determine to be appropriate.
CFIUS’s review process is a voluntary system, except in
(3) National Security Investigation. In the third step, if any
certain cases, of notification by foreign investors. Firms
member of CFIUS determines that a foreign investment
largely comply with the provision, because foreign
transaction threatens to impair the national security, the
acquisitions that do not notify the committee remain subject
transaction undergoes a more comprehensive 45-day
indefinitely to divestment or other actions by the President.
national security investigation. During this investigation,
(1) In the first step of the formal review process,
CFIUS and the transactors can develop and adopt
notification to CFIUS can follow a two-track approach,
https://crsreports.congress.gov
link to page 2 The Committee on Foreign Investment in the United States
mitigation procedures that are designed to address national
“special concern” that are acquiring critical technologies or
security concerns.
critical infrastructure that would affect United States
leadership in areas related to national security.
Presidential Determination. If CFIUS concludes that a
proposed foreign investment transaction threatens to impair
CFIUS is required to brief certain congressional leaders
U.S. national security and adequate mitigation procedures
upon request and to report annually to Congress on any
are not reached, it can recommend that the President
reviews or investigations it conducted during the year (see
suspend or prohibit the proposed transaction. The President
Table 1). The data indicate that of the 782 foreign
has 15 days to take such action for such time as he
investment transactions between 2008 and 2014, 38
considers appropriate to suspend or prohibit any foreign
transactions were halted during the review process, 267
investment transaction that threatens to impair U.S. national
transactions were investigated for national security
security. Such determinations by the President are not
concerns, and one transaction was blocked by the President.
subject to judicial review.
Table 1. Foreign Investment Transactions Reviewed
Recent Activity
by CFIUS, 2008-2015
Investment transactions that attracted public and
Congressional attention include the Chinese firm Sany
Notices
Group acquired in 2012 a wind farm project in Oregon by
With-
Ralls Corp. without reporting the transaction to CFIUS.
drawn
No. of
Presi-
Subsequently, CFIUS retroactively reviewed the transaction
No. of
During
Investi-
dential
and directed Ralls to desist due to objections by the U.S.
Year
Notices
Review
gations
Decisions
Navy over the placement of wind turbines near or within
2008
155
18
23
0
restricted Naval Weapons Systems Training Facility
airspace. President Obama approved CFIUS’s
2009
65
5
25
0
determination and blocked the investment.
2010
93
6
35
0
In 2016, Dutch electronics firm Phillips terminated a $2.9
2011
111
1
40
0
billion sale of controlling interest in its Lumileds unit, with
2012
114
2
45
1
over 600 patents and operations in the United States, to a
consortium of Chinese investors due to its inability to
2013
97
3
48
0
mitigate concerns raised by CFIUS. In December 2016,
Phillips announced that it had agreed to sell its Lumileds
2014
147
3
51
0
unit for $2 billion to affiliates of Apollo Global
2015
143
3
66
0
Management, an asset management firm.
Total
925
41
333
1
In December 2016, President Obama blocked a second
Source: Annual Report to Congress, Committee on Foreign Investment
foreign investment transaction. The Presidential action
in the United States, September 2017.
blocked the Chinese firm, Fujian Grand Chip Investment
Fund, from acquiring Aixtron, a German-based
Issues for Congress
semiconductor firm with assets in the United States.
The CFIUS process for reviewing certain foreign
investment transactions has raised a number of questions
In September 2017, President Trump blocked the $1.3
for Congress, including:
billion proposed acquisition of Lattice Semiconductor by
the Chinese investment company, Canyon Bridge Capital
How well is CFIUS balancing the traditionally open
Partners; in March 2018, President Trump blocked the
U.S. investment climate with the requirement to protect
acquisition of Qualcomm by Singapore-based Broadcom. In
U.S. national security?
2019, CFIUS raised concerns about foreign access to
personally identifiable information of U.S. citizens through
Should food security play a role in a CFIUS deliberation
the acquisition of Grindr LLC by the Chinese firm Beijing
to protect U.S. critical infrastructure?
Kunlun Co. LTD., which is divesting itself of Grindr.
How should CFIUS balance the requirement to protect
critical technology from foreign acquisition with the
FIRRMA made a number of changes to CFIUS’ role by: (1)
need to support an open, market-driven economy?
expanding CFIUS’s reviews of certain real estate
transactions in close proximity to a military installation or
More Information
U.S. government facility or property of national security
For more information, see CRS Report RL33388, The
sensitivities; (2) including reviews of joint ventures; (3)
Committee on Foreign Investment in the United States
reviewing any non-controlling investment in U.S.
(CFIUS), by James K. Jackson. Also, see CRS Report
businesses involved in critical technology (including
RS21857, Foreign Direct Investment in the United States:
emerging and foundational technologies), critical
An Economic Analysis, by James K. Jackson.
infrastructure, or collecting sensitive data on U.S. citizens;
(4) shifting the filing requirement for foreign firms from
James K. Jackson,
voluntary to mandatory in certain cases; and (5)
discriminating among foreign investors by countries of
IF10177
https://crsreports.congress.gov
The Committee on Foreign Investment in the United States
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF10177 · VERSION 17 · UPDATED