West Legal Ed’s Federal Publications Seminars will host a free one-hour briefing on legislative and policy developments relating to the Committee on Foreign Investment in the United States (CFIUS). CFIUS reviews proposed foreign investment in U.S. companies for potential national security concerns. U.S. companies that serve the federal government must stay abreast of how the Trump administration is implementing the CFIUS review process and how this process could change as Congress debates the first major CFIUS reform legislation in over a decade.
Increased scrutiny by the Trump administration in the CFIUS review process. If a foreign party invests in or acquires a U.S. government contractor – not just defense contractors – the parties may need CFIUS to review and clear the transaction. This process includes CFIUS reviewing the foreign party, the U.S. company’s industry and business, as well as the U.S. company’s past and current government contracts, supply orders, and any export controlled or classified information.
CFIUS reform would broaden the scope of U.S. companies that would require review. The bipartisan, bicameral Foreign Investment Risk Review Modernization Act (FIRRMA) would mandate CFIUS reviews for U.S. critical technology or critical infrastructure companies, U.S. companies seeking investment from foreign state-owned enterprises, and even certain real estate transactions.
Operational implications of reform. FIRRMA may require more extensive “mitigation” of national security risks to clear deals, such as installing secure operating systems, firewalling foreign buyers from operations, or prohibiting offshoring/outsourcing.
Business planning for government contractors. Regardless of industry, companies that serve the U.S. government should prepare to be impacted by CFIUS if they seek foreign investment, even from allied countries. Contractors need to factor in the additional issues presented by a foreign investor, including how to structure the deal, delays in closing due to CFIUS review, informing government customers, and operational impacts.
Note: This webinar is not available for CLE credits.