Complying with New Foreign Investment Rules Will Pose a Complex Challenge
The US Treasury is proposing new regulations on safeguarding foreign investments from possible national security risks, to be implemented through the Committee on Foreign Investment in the United States (CFIUS). The interagency group was given new powers to scrutinize foreign investments in 2018 under the Foreign Investment Risk Review Modernization Act (FIRRMA), signed by President Donald Trump. The Treasury's plan to implement part of CFIUS's new powers aims to safeguard investments without stifling legitimate transactions or overwhelming a strapped bureaucracy, but the complex rules will make foreign investment into the United States more difficult for American companies, foreign investors, and their lawyers. The new regulations cover foreign investment in areas of "sensitive" and "critical" technology, infrastructure, and data, but the definition of these areas are complicated and broad.
This PIIE Chart was adapted from information in Martin Chorzempa's blog post, "New CFIUS Regulations: More Powerful, Transparent, and Complex," published on October 10, 2019.