The U.S. continues to attract foreign investment at an unparalleled rate (to the tune of more than $225 billion in 2010). U.S. entities that find themselves across the bargaining table from foreign investors should consider the potential impact that review by the Committee on Foreign Investment in the United States (CFIUS) may have on their prospective transaction. Failure to understand CFIUS's mission and process can threaten a transaction and deprive your company of a valuable injection of foreign capital.
CFIUS, which is composed of nine federal agencies (and several agencies participating as observers and ex officio members) reviews transactions in which a foreign entity obtains control of a U.S. business to determine whether the transactions pose a threat to U.S. national security. If they do, CFIUS may impose conditions on the parties to mitigate those threats or, if the threats cannot effectively be mitigated, recommend to the president that he prohibit the transaction.