Today, the U.S. Department of the Treasury, acting as Chair of the Committee on Foreign Investment in the United States (CFIUS), announced a final rule aimed at enhancing CFIUS procedures and strengthening its penalty and enforcement powers. This update is the first significant revision to CFIUS monitoring and enforcement provisions since the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) was enacted.
Assistant Secretary for Investment Security Paul Rosen stated, "This rule enhances CFIUS’s ability to vigorously defend the national security of the United States by ensuring our investment screening regime has a sharper scalpel to more quickly and effectively address national security risks that arise in CFIUS reviews."
CFIUS is responsible for reviewing certain foreign investments in U.S. businesses and real estate transactions to assess their impact on national security. It enforces compliance with its regulations through civil monetary penalties and other remedies. The final rule builds on recent enhancements to CFIUS's compliance and monitoring capabilities, aiming to better fulfill its national security mission while maintaining an open investment policy.
Key changes introduced by the final rule include expanding the types of information required from transaction parties, allowing for timelines on risk mitigation proposals, increasing circumstances for imposing civil penalties, raising maximum penalties for violations, broadening subpoena authority usage, and extending petition submission time frames.
CFIUS will continue evaluating compliance cases based on surrounding facts and circumstances, considering factors outlined in its Enforcement and Penalty Guidelines.
The final rule takes effect 30 days after being published in the Federal Register. Further details are available at https://www.cfius.gov/.
