Pursuant to the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), the Committee on Foreign Investment in the United States (CFIUS) established the concept of “excepted foreign state[s],” defined as those states with compliance laws, orders and regulations similar to those of the United States concerning foreign investments assessed for national security purposes. See Update of January 22, 2020. Under such a designation, an excepted foreign state qualifies, in certain circumstances, for an exemption from the two mandatory CFIUS filings established under the FIRRMA (i.e., non-controlling covered investments and certain real estate transactions).
In 2020, CFIUS initially identified Australia, Canada, the United Kingdom (including Northern Ireland), and later, New Zealand as excepted foreign states due to their “robust intelligence sharing and defense industrial base integration mechanisms with the United States.” This designation required that within a two-year period, CFIUS make a determination that these foreign states had satisfied the criteria reflecting they had established and were effectively utilizing a robust process to analyze foreign investments for national security risks. On January 5, 2022, CFIUS confirmed that Austria and Canada had met all necessary criteria. See Update of January 7, 2022.
On February 13, 2023, CFIUS announced that both the United Kingdom and New Zealand “have established and are effectively utilizing a robust process to analyze foreign investments for national security risks and to facilitate coordination with the United States on matters relating to investment security.” With these determinations, both countries will remain excepted foreign states and excepted real estate foreign states under the relevant CFIUS regulations at 31.C.F.R. Part 800. These determinations are effective as of February 10, 2023.