Recent Revisions to Exon-Florio "National Security" Reviews of Foreign Investment in the United States

On December 22, new regulations governing national security reviews by the Committee on Foreign Investment in the United States (“CFIUS”) of acquisitions of U.S. businesses (including U.S. operations of foreign companies) by non-U.S. parties went into effect. Together with guidance issued by the Department of the Treasury earlier in December, an executive order issued last January, and last year’s statutory revisions to the Exon-Florio Amendment contained in the Foreign Investment and National Security Act of 2007 (“FINSA”), the revised regulations complete the most comprehensive overhaul of the foreign investment review process in nearly two decades. The revisions do not fundamentally change the nature of CFIUS review, but they do clarify and codify a number of recent changes in CFIUS practice that broaden the scope of transactions potentially subject to review and the types of transactions that may be considered to raise “national security” issues.

The attached alert memorandum provides a summary of the most significant changes and their impact on parties considering cross-border investments into the United States.