New Guidelines Could Signal Tougher Approach From Foreign Investment Review Body

New Guidelines Could Signal Tougher Approach From Foreign Investment Review Body

The U.S. panel that reviews foreign investments for national-security concerns has new guidelines on how it might deal with violations of its rules and agreements, a move that could signal a coming enforcement push.

The enforcement guidelines issued Thursday are a first for the Committee on Foreign Investment in the U.S., or Cfius, which previously had no written guidelines on the topic. The interagency committee is run by the U.S. Treasury Department and reviews foreign investments in U.S. companies and real estate, and can advise the president to block or unwind a deal.

Cfius also has the power to levy sometimes-steep penalties when a company missteps in the review process or after, including failures to comply with the terms of an agreement meant to mitigate a national-security risk.

The new guidelines provide more specifics on how Cfius might use that enforcement power and came with a caution for businesses.

“Today’s announcement sends a clear message: Compliance with Cfius mitigation agreements is not optional, and the committee will not hesitate to use all of its tools and take enforcement action to ensure prompt compliance and remediation,” Assistant U.S. Treasury Secretary

Paul Rosen


Cfius has been bolstering its enforcement capacity by adding personnel, and the publication of the guidelines could signal a coming uptick in enforcement, said

J. Philip Ludvigson,

a former Treasury official who now works as a partner at law firm King & Spalding LLP.

J. Philip Ludvigson, a partner in King & Spalding’s international trade group.


King & Spalding LLP

“It’s a signal that Cfius is taking enforcement very seriously, and that companies should take it equally seriously,” he said. “There’s quite likely more enforcement to be coming from Cfius.”

Companies that run afoul of the new guidelines will have their compliance efforts scrutinized when Cfius moves to assess any penalties, the guidelines said.

The enforcement guidelines outlined several possible violations that would draw attention, including a company’s failure to notify the panel about a transaction, noncompliance with a mitigation settlement or material misstatements.

The guidelines said Cfius would also look at the harm the conduct caused and whether it was negligent or deliberate.

In deciding on penalties, Cfius would take into account violators’ compliance resources—legal counsel, consultants, auditors and monitors—as well as its compliance culture. It also would consider whether a company had come forward to disclose its potential violation, the guidelines said.

Mr. Ludvigson said companies should be as proactive and forthcoming as possible in interactions with the committee.

Cfius has in recent years been seen as a possible bulwark against the risks posed by Chinese investment in U.S. businesses and real estate. The Foreign Investment Risk Review Modernization Act, passed in 2018 with an eye on China, gave Cfius more resources and a broader purview.

President Biden last month ordered the committee to heighten scrutiny on deals that may give China and other adversaries access to critical technology.

Write to Richard Vanderford at

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