CFIUS’ First Full Year Under FIRRMA

Skadden's 2020 Insights

Michael E. Leiter Katie Clarke

Key Takeaways for 2020 and Beyond

  • The vast majority of CFIUS filings will remain voluntary, and important considerations remain for voluntarily filing, including CFIUS’ expanded jurisdiction and increased attention to non-notified transactions.
  • CFIUS’ jurisdiction and sensitivity will remain aligned with export control laws, and both foreign investors and U.S. companies considering business combinations should develop or maintain fundamental competency in the subject area.
  • CFIUS is expected to have greater resources and appetite for enforcing mitigation agreements; therefore, companies must prioritize understanding and complying with both new and existing agreements.
  • CFIUS’ increasing interest in companies that collect U.S. citizen information is likely to result in increased mitigation to shield foreign investors from accessing that information.
  • Parties contemplating covered transactions in the information and communications technology sector should expect more focus on supply chain restrictions and vendor review in potential mitigation agreements.
  • The Committee remains primarily concerned with the national security threats posed by China, and thus both Chinese investors and non-Chinese investors with significant Chinese connections are likely to be subject to increased scrutiny.
  • The majority of CFIUS’ requirements will continue to apply to “excepted investors” from “excepted countries” even if CFIUS establishes, as expected, a “white list” of such investors and countries.
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.