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Anthony Rapa, George T. Boggs, and Alan G. Kashdan ●
The Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) recently released the unclassified version of its statutorily mandated annual report to Congress, covering calendar year 2022. Viewed in the context of prior CFIUS reports to Congress, the report, released July 31, 2023, highlights key trends in the U.S. government’s review of inbound foreign investment, including a record number of filings, increased investigations, and the emergence of Singapore as a top investor domicile. Overall, the report makes clear that CFIUS continues to play an active and robust role in reviewing proposed investments in U.S. businesses, and dealmakers should account for this from the outset of deal planning.
Here are six key takeaways from the CFIUS annual report:
- CFIUS Reviewed a Record Number of Filings, Even as M&A Activity Slowed
CFIUS reviewed 440 filings (154 short-form declarations and 286 full joint voluntary notices) in 2022, a slight increase over the prior record of 436 filings that CFIUS reviewed in 2021. This is particularly notable given the slowdown in M&A deals in the second half of 2022.
The record number of filings is reflective of robust engagement with the CFIUS process by foreign investors, as investors become more familiar with the process and as CFIUS makes clear that it will vigorously safeguard U.S. national security in reviewing investments. Notably, the record-high filings came in the midst of intensified public engagement regarding CFIUS review in 2022, including a presidential executive order, issuance of the first-ever CFIUS enforcement guidelines, and the inaugural Treasury Department CFIUS conference.
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