The US Committee on Foreign Investment (CFIUS) has reviewed a record number of foreign investments for potential national security risk during the past year, according to its Annual Report to Congress for 2022. The Committee evaluated 440 covered transactions, marking an increase from the 436 transactions scrutinized in the previous year. This rise in reviews by the Committee highlights the US government’s ongoing concerns related to foreign investments and national security.
The Annual Report indicated that there was a 36% surge in the number of CFIUS-imposed measures designed to alleviate national security risks in comparison to 2021. Given these statistics, it is evident that mitigating national security threats has become even more central to the Committee’s oversight responsibilities.
CFIUS, a governmental body, has long been responsible for assessing inbound investments to the United States. In recent years, concerns over technology transfer, access to sensitive information, and geopolitical threats have intensified the scrutiny of these investments. While foreign investments play a vital role in supporting America’s economic growth, ensuring national security is not compromised remains a high priority.
Though the increase in CFIUS reviews can induce more regulatory burden for corporations and law firms, it also underscores the paramount importance of advanced planning and robust compliance programs. The rise in the number of CFIUS-imposed mitigation measures especially warrants attention; it suggests that corporations should be ready for stricter regulatory oversight and be prepared to implement necessary measures to address potential national security risks when planning overseas investments.