On July 31, 2023, the Treasury Department, as the lead agency of the Committee on Foreign Investment in the United States (CFIUS), released a public version of its annual report to Congress regarding foreign direct investment in the United States. The report highlights key indicators of the CFIUS process and provides statistics on transactions that were filed in 2022; it also reflects that a record number of filing were submitted in calendar year 2022. Assistant Secretary for Investment Security Paul Rosen stated, “In 2022, the Committee continued to review record numbers of filings. We sharpened due diligence on investors, tackled sophisticated technologies and national security risks, and launched a number of reviews to assess potential non-compliance with CFIUS regulations.”
Key highlights from the 2022 report include the following:
- CFIUS reviewed a record number of covered transactions with a total of 440 notices and declarations of covered transactions or covered real estate transactions.
- Parties filed using the short-form declaration process in 154 instances. Of those, 90 were concluded with no action by CFIUS; 50 resulted in a request that the parties file a full written notice; and, CFIUS informed the parties to 14 declarations that it was unable to conclude action.
- Parties filed using written notices in 286 instances. Of those, CFIUS conducted first-stage “reviews” in all 286 submissions, with 162 notifications moving on to second-stage “investigations.” One notice was rejected by CFIUS; 88 notices were withdrawn by the parties (with some later refiled and in 12 filings the parties abandoning the transaction); no notices were forwarded to the president for review in 2022. Of the remaining that underwent reviews/investigations, CFIUS concluded action on 41 notices after adopting mitigation agreements to resolve national security concerns.
- The average number of days for CFIUS to complete a review was 46 days, and the average number of days to conclude an investigation was 80 days.
- In 2022, the notices covered the following industry sectors: Finance, Information and Services (52%), Manufacturing (29%), Mining, Utilities and Construction (13%), and Wholesale/Retail Trade and Transportation (6%).
- In 2022, the highest number of filings involved Singapore (37), China (36), United Kingdom (18), Canada (17), and Japan (15).
The report also notes that CFIUS is currently monitoring 214 mitigation agreements and any resulting compliance plans, with 44 site visits in 2022. CFIUS notes that it will continue engaging with parties subject to mitigation agreements or conditions and independent monitors to improve compliance, engaging more broadly with industry, advisors, and practitioners to encourage a culture of compliance, and increasing staff resources dedicated to monitoring and enforcement activities. CFIUS will also continue to assess noncompliance on a case-bycase basis as it evaluates whether civil penalties or other measures should be implemented.
Finally, CFIUS continues to enhance its focus on non-notified transactions to detect and assess national security risks posed by foreign investment. In 2022, 84 non-notified transactions were identified, with 11 of those resulting in a formal request to the parties for a CFIUS filing.
If desired for comparison purposes, Thompson Hine’s Update on the CFIUS 2021 Report is available here.