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Proposed Bill Seeks to Increase Transparency of CFIUS Deliberations

February 26, 2024

Government Contracts and National Security partner Ronald Lee was quoted in the Foreign Investment Watch article, “Bill would give governors power to question CFIUS about transactions,” which discusses a recent bill introduced by U.S. Senator Kevin Cramer (R-North Dakota). The bill would require the Committee on Foreign Investment in the United States (CFIUS) to respond to inquiries from governors about transactions within state borders. Although CFIUS deliberations are currently confidential, a governor who is aware of a potential acquisition or sale would be able to ask CFIUS whether the transaction would warrant a review.

Lee told Foreign Investment Watch that the bill is not limited to real estate transactions and would “authorize the governor of a state to ask CFIUS whether a transaction is a covered transaction.” CFIUS would then be required “to determine if the transaction is a covered transaction and inform the governor of the determination” within 30 days of the request. Lee added that a governor could ask CFIUS about any transaction, “not only those that had been the subject of a declaration or notice to CFIUS,” meaning that a governor’s inquiry could relate to a non-notified transaction.

Lee noted that the proposed bill raises questions about confidentiality and could potentially create a heavy communication burden for CFIUS. “CFIUS operates as a closed box, and this is a legislative effort to lift the lid and look in,” he said. Additionally, “if CFIUS is not reviewing the transaction, or has not yet formed a view on whether the transaction is a covered transaction, CFIUS would find it difficult or impossible to respond to the request.”

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