The Committee on Foreign Investment in the United States (CFIUS) is a federal inter-agency committee authorized to review foreign direct investment in the United States that would result in a foreign entity owning and/or controlling a U.S. business and/or technology to determine what effect these transactions might have on U.S. national security.

A U.S. or foreign company undertaking a cross-border investment or merger/acquisition transaction that involves foreign direct investment should carefully consider filing a CFIUS notification if the transaction will lead to control of a U.S. business by a foreign entity and the deal might raise political and/or national security-related concerns. For example, transactions involving investors from China, Russia or countries in the Middle East likely will receive heightened scrutiny, as will deals related to “critical infrastructure.” This is defined as systems or assets so vital to the United States that their breakdown “would have a debilitating impact on national security, national economic security, national public health or safety.” The U.S. government has identified 11 sectors of critical infrastructure:

  • Agriculture & food
  • Water
  • Public health
  • Emergency services
  • Defense industrial bases
  • Telecommunications
  • Energy
  • Transportation
  • Banking & finance
  • Chemical industry & hazardous materials
  • Postal services & shipping

CFIUS review is also crucial if a transaction would result in a foreign investor acquiring a U.S. defense contractor, particularly one that has sensitive, export-controlled technologies or information, or in the case of a transaction involving investment by a foreign national government or an entity controlled by a foreign government. When the foreign investment concerns U.S. companies holding government contracts that involve classified information, the Department of Defense’s Defense Security Service (DSS) conducts a separate, parallel process to mitigate foreign ownership, control or influence (FOCI) to ensure that no unauthorized foreign person gains access to classified materials or has the ability to adversely affect the company’s performance under classified contracts.

CFIUS retains the right to review any foreign acquisition of which it was not notified and that it did not previously examine, so requesting a review enables the parties to be prepared and proactive, rather than reactive, and ultimately obtain a “safe harbor” for their transaction. Failing to seek a review could result in the U.S. government stepping in after the transaction is completed and possibly unwinding the deal or placing certain restrictions on the acquisition that may significantly alter its terms.

Our CFIUS team represents clients in CFIUS and related national security reviews by various U.S. government agencies. We assist in conducting pre-transaction due diligence, formulating political strategies to address congressional or executive branch inquires, filing CFIUS notifications and working with the designated agencies during a review, and negotiating mitigation agreements required to address perceived security risks due to foreign ownership, control or influence. We also provide support related to post-CFIUS transaction measures, including drafting and implementing detailed compliance plans, briefing boards of directors and key officers on compliance, and advising on and drafting additional documentation or regulatory amendments to allow the U.S. company to continue conducting business under foreign ownership.

We maintain good working relationships with the government officials who participate in the CFIUS review process, and we have been successful in addressing initial concerns regarding transactions, resulting in few to no restrictions being placed on completed acquisitions and allowing our clients to conclude beneficial business transactions.


Examples of our CFIUS experience include:

  • Obtaining CFIUS clearance within two weeks for a transaction involving a Chinese entity seeking a minor share of control of a U.S. oil and energy firm.
  • Facilitating an informal discussion with administration and congressional officials on behalf a U.S. company involved in commercial satellite launches to analyze and review a contemplated transaction involving investment by a Russian entity.
  • Obtaining CFIUS clearance for the sale to German and Russian entities of a U.S. company holding rights for worldwide commercial marketing and sales of commercial launch vehicles.
  • Obtaining CFIUS and DSS/FOCI clearance for a multibillion-dollar acquisition/merger of two large aerospace companies with a significant presence in the United States and Europe.
  • Obtaining CFIUS clearance for the acquisition of a U.S. communications company by a U.S. subsidiary of a Japanese company.
  • Advising a U.S. subsidiary of a Japanese company on FOCI mitigation measures, developing compliance programs and coordinating with DSS so the U.S. subsidiary could pursue contracts with the U.S. government that involved classified information.