On Tuesday, August 2, 2022, the Committee on Foreign Investment
in the United States (“CFIUS” or “the Committee)
released its Annual Report to Congress for calendar year
2021.1 The report, replete with charts, tables, and
graphs visualizing the data and comparing it to prior years,
broadly details the work the Committee has done in the past year
concerning oversight of foreign investment transactions in areas
deemed critical to U.S. national security. There are several key
takeaways from the report that are particularly important to
international businesses looking to invest in the United
Background: Authority, Composition, and Process
CFIUS, under the Foreign Investment Risk Review Modernization
Act of 2018 (“FIRRMA”) and section 721 of the Defense
Production Act of 1950, is an interagency body comprising the
Departments of the Treasury (chair), State, Defense, Justice,
Commerce, Energy, and Homeland Security; the Office of the United
States Trade Representative; and the Office of Science and
Technology Policy within the Executive Office of the President,
that has the authority to review foreign-investment transactions
(including certain real estate transactions),2 referred
to as “covered transactions,” to address national
security. CFIUS regulations are codified at title 31 of the Code of
With the exception of certain transactions subject to mandatory
filing requirements, parties to foreign-investment transactions
submit voluntary declarations or notices of transactions to CFIUS.
Notably, though, CFIUS may review pending or completed transactions
even when the parties have not filed a notice or declaration, if it
has reason to believe that the transaction is subject to CFIUS
jurisdiction and/or may raise national security concerns.
The regulations require CFIUS to complete a review of a notified
transaction within 45 days,3 and allows for an
additional 45-day investigation period if CFIUS deems it
necessary.4 In the alternative, parties may submit a
declaration of a transaction, which is an abbreviated notification
allowing for a 30-day assessment period.5 After a
declaration, CFIUS may (1) request the parties submit a notice; (2)
inform the parties that it is unable to conclude action on the
basis of the declaration and that the parties may file a notice;
(3) initiate a unilateral review; or (4) notify the parties that it
has concluded all action with regard to the
transaction.6 When CFIUS concludes all action on a
transaction, it has determined the transaction does not pose any
unresolved national security risks, that any national security
concerns are adequately addressed by other laws, or that mitigation
measures will address such risks.
“Covered transaction” includes any of: “a covered
control transaction; a covered investment; a change in the rights
that a foreign person has with respect to a U.S. business in which
the foreign person has an investment, if that change could result
in a covered control transaction or a covered investment; or any
other transfer, agreement, or arrangement, the structure of which
is designed or intended to evade or circumvent the
application” of FIRRMA.7 Additionally, CFIUS has
the authority to review certain real estate transactions (referred
to as “covered real estate transactions,”) as necessary
to mitigate national security that may arise from such transactions
(for example, by a piece of real estate’s proximity to a U.S.
CFIUS conducted an assessment and took action (as discussed
above) with respect to 164 declarations of covered transactions
submitted in 2021. Only one of these was a real estate
- 47 were subject to mandatory filing requirements;
- CFIUS requested that parties to 30 declarations file a written
- CFIUS informed the parties to 12 declarations that it was
unable to conclude action;
- CFIUS notified the parties to 120 declarations that it had
concluded all action; and
- CFIUS rejected two declarations. In one of these instances, the
parties refiled as a notice.
The countries with the highest numbers of declarations in 2021
were: Canada (22); Germany (11); Singapore (11); South Korea (11);
and United Kingdom (10). These are all close allies and/or trading
partners of the United States.
2021 saw 272 notices filed with and accepted by CFIUS for
review, the most of any year since 2012.
- The highest number of these (147 notices, or 55%) were in the
Finance, Information, and Services sector. The Manufacturing sector
accounted for the second highest amount (74 notices, or 28%);
- CFIUS conducted investigations into 130 of those 272 notices
(the third highest in any year);
- Filers withdrew 74 of the 272 notices. In 63 of these
instances, the parties filed a new notice, 52 of which parties
refiled in 2021 and 11 in 2022; and
- CFIUS did not reject any notices in 2021.
The countries with the highest number of notices in 2021 were:
China (44); Canada (28) Japan (26); Cayman Islands (18) France
(13); Singapore (13); South Korea (13); and United Kingdom
Mitigation Measures and Conditions
CFIUS adopted or imposed mitigation measures as follows:
- CFIUS concluded action after adopting mitigation measures to
resolve national security concerns with respect to 26 of the 272
- CFIUS adopted mitigation measures to address residual national
security concerns with respect to two notices that were voluntarily
withdrawn and abandoned.
- In one notice, CFIUS imposed measures to mitigate interim
Noteworthy mitigation measures included:
- prohibiting or limiting the transfer or sharing of certain
intellectual property, trade secrets, or technical
- establishing a corporate security committee, voting trust, and
other mechanisms to limit foreign influence and ensure compliance,
including the appointment of a U.S. Government-approved security
officer and/or member of the board of directors and requirements
for security policies, annual reports, and independent audits [see
our podcast episode discussing this];
- security protocols to ensure the integrity of products or
software sold to the U.S. Government;
- assurances of continuity of supply to the U.S. Government for
defined periods; and
- divestiture by the foreign acquirer of all or part of the U.S.
Through various means, including referrals and tips, and other
intelligence gathering, CFIUS identified 135
non-notified/non-declared transactions for consideration, and
requested filings from eight of those.
While CFIUS does not release most information on critical
technology to the public (for national security purposes), it did
tabulate foreign acquirers of critical technology by country. The
highest number of parties were from Germany (16); United Kingdom
(16); Japan (15); and South Korea (13). Again, these are all allies
of the United States, so it is not surprising that they represent
the most prominent home countries of acquirers of critical
The bulk of transactions that CFIUS reviewed and approved were
those involving acquirers based in friendly countries. This
reflects the trend of “friendshoring,” or relocating supply
chain nodes to trading partners with similar values. The outlier in
this regard is China, which constituted the largest country from
which foreign acquirers filed notices of covered transactions.
Despite rising political and trade tensions, China remains a major
trading partner with the United States (it is the United
States’ largest goods trading partner, totaling $559.2 billion
in 2020).9 China also represented the single largest
jump in notices of transactions year-over-year from 2020, when
parties submitted only 17 notices. Contrast this with the United
Kingdom, which submitted 14 notices in 2020 and one fewer, 13, in
For mitigation measures, these reflect ongoing and prominent
national security considerations: intellectual property
misappropriation and illicit technology transfer and limiting
foreign interference in U.S. operations (both commercial and
1. Committee on Foreign Investment in the United States,
Annual Report to Congress, Calendar Year 2021,”
(Aug. 2022) (available at https://home.treasury.gov/system/files/206/CFIUS-Public-AnnualReporttoCongressCY2021.pdf).
2. See 31 CFR 802.
3. 31 CFR 800.503.
4. 31 CFR 800.508(a).
5. 31 CFR 800.405.
6. 31 CFR 800.407(a).
7. 31 CFR 800.213.
8. 31 CFR 802.101.
9. U.S. Trade Representative, “The People’s
Republic of China,” (available at
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