February 26, 2015

National Security Alert: The CFIUS 2014 Annual Report Highlights Notable Foreign Investment Trends

Summary: On February 26, 2015, the Committee on Foreign Investment in the United States (CFIUS) published its annual report summarizing its activity during 2013 (the Annual Report), which is the most recent calendar year for which data has been compiled. The report highlights certain key trends as well as some notable developments. CFIUS, which is a committee composed of executive-branch agencies, conducts national-security reviews of foreign direct investment (FDI) into the United States. In particular, CFIUS has jurisdiction to review “covered transactions,” which are transactions that could result in control of a US business by a foreign person, to determine whether they present any unresolved national-security concerns. Transactions deemed to threaten US national security may be subject to mitigation requirements or conditions, or can be referred to the President for review and potential prohibition or divestment relief. The Annual Report shows a decline in reviewed transactions for 2013, an increase in cases taken to the 45-day investigation phase and some notable developments regarding the countries most active in CFIUS reviews. As with 2012, China led all countries represented in CFIUS reviews, though 2013 also saw a notable decline in UK-based transactions as well as an increase in transactions involving Japanese investors.

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