Topic covers CFIUS organizational and related matters

CFIUS authorization

• Committee was first authorized by Executive Order 11858
  in 1975

• See Executive Orders below

• Committee is now expressly authorized by statute

• FINSA (2007) formally established CFIUS in statute
• See Section 721(k)(1) below

Committee membership

• Was changed over the years by Presidential executive order

• See Executive Orders below

• Now formalized by FINSA

• See Committee Membership below

• FINSA also establishes the Director of National Intelligence ("DNI'') and the Secretary of Labor as ex officio members of CFIUS

• FINSA specifies that the DNI is to provide independent analyses of any national security threats posed by transactions, and is to have no other policy role
• FINSA requires that the role of the Secretary of Labor, with respect to mitigation agreements, be defined by regulations

Lead agencies

• FINSA further anticipates that, for each transaction before CFIUS, the Department of the Treasury shall designate, as appropriate, one or more lead agencies. The lead agency, on behalf of CFIUS, may negotiate, enter into or impose, and enforce mitigation agreements or conditions with parties to the transaction to address any threats to national security posed by the transaction

FINSA specifies the following as members of CFIUS:

• Secretary of the Treasury (who serves as chairperson)
• Attorney General
• Secretary of Homeland Security
• Secretary of Commerce
• Secretary of Defense
• Secretary of State
• Secretary of Energy. 

• FINSA also provides that CFIUS may include, generally or on a case-by-case basis as the President deems appropriate, the heads of any other executive department, agency, or office

Foreign investment in the United States

Executive Order 11858  1975

• 40 FR 20263; May 9, 1975
• Text:  Federal Register archive Text  Alternate source
• Established CFIUS mainly to monitor and evaluate the impact of foreign investment in the United States
• Executive Order 11858 of May 7, 1975, 40 F.R. 20263 established the Committee with
  six members: the Secretaries of State, the Treasury, Defense, Commerce, and the Assistant
  to the President for Economic Affairs, and the Executive Director of the Council on
  International Economic Policy.

Executive Order 12188  1980

• International trade functions
• 45 FR 989; January 4, 1980
• Executive Order 12188, January 2, 1980, 45 F.R. 969,
  added the United States Trade Representative and substituted the Chairman of the Council of Economic Advisors for the Executive Director of the Council on International Economic Policy

Executive Order 12661  1988

• Implementing the Omnibus Trade and Competitiveness Act of 1988 and Related International Trade Matters
• 54 FR 779; January 9, 1989
• President delegated to CFIUS his responsibilities under Section 721
• Designated CFIUS to receive notices of foreign acquisitions of US companies, to determine whether a particular acquisition has national security issues sufficient to warrant an investigation and to undertake an investigation, if necessary, under the Exon-Florio provision
• CFIUS to submit a report and recommendation to the President at the conclusion of an investigation
• Executive Order 12661, December 27, 1988, 54 F.R. 779, added the Attorney
  General and the Director of the Office of Management and Budget.

Executive Order 12860  1993

• Adding members to the Committee on Foreign Investment in the United States
• 58 FR 47201; September 8, 1993
• Text:  Federal Register
• Expanded CFIUS membership to include the Director of the Office of Science and Technology Policy, the Assistant to the President for National Security Affairs and the Assistant to the President for Economic Policy
• In response to a sense of Congress resolution,
• Executive Order 12860,
  September 3, 1993, 58 F.R. 47201, added the Director of the Office of Science and
  Technology Policy, the Assistant to the President for National Security Affairs, and the
  Assistant to the President for Economic Policy.

Executive Order 13286  2003

• Amendment of Executive Orders, and Other Actions, in Connection With the Transfer of Certain Functions to the Secretary of Homeland Security
• 68 FR 10619, March 5, 2003
• Text:  Federal Register
• In February 2003, the Department of Homeland Security was added to CFIUS.
• Executive Order 13286, Section 57, February 28, 2003 added the Secretary of Homeland Security.
• Sec. 57. Executive Order 11858 of May 7, 1975 ("Foreign Investment in the United States"), as amended, is further amended by:
  
  (a) inserting "(8) The Secretary of Homeland Security." after "(7) The Attorney General." in section 1(a); and
  
  (b) redesignating subsection (8) as subsection (9) in section 1(a).
  
  
• This brought the membership of CFIUS to twelve under the chairmanship of the Secretary of Treasury. The other members are the Secretaries of State, Defense, and Commerce, the Attorney General, the Director of the Office of Management and Budget, the U.S. Trade Representative, and the Chairman of the Council of Economic Advisers.

Secretary of Homeland Security added to CFIUS

• Executive order

Executive Order 13456

• Further Amendment of Executive Order 11858 Concerning Foreign Investment in the United States
• 73 FR 4677, January 25, 2008
• Text:  Federal Register

• Executive Order 13456

• 73 Fed Reg 4676
• White House website
• President's statement

• Foreign investment in the US: enhanced CFIUS processes and procedures

• McGuireWoods  - February 12 2008
• Memo

• President Bush signs executive order implementing changes to national security reviews of foreign investment in the United States

• King & Spalding  - February 1 2008
• Memo

• President Bush issues changes to the Exon-Florio US national security review process

• Freshfields - January 31 2008
• Memo

• CFIUS review of foreign investment

• Sullivan & Cromwell LLP USA - January 31 2008
• Memo

Commentary

• Wilmer Hale  1.25.08

• Department of Treasury website

• FINSA further anticipates that, for each transaction before CFIUS, the Department of the Treasury shall designate, as appropriate, one or more lead agencies. The lead agency, on behalf of CFIUS, may negotiate, enter into or impose, and enforce mitigation agreements or conditions with parties to the transaction to address any threats to national security posed by the transaction

• Office of International Investment (ITI)
• Office of the Assistant General Counsel for International Affairs (IA)
• Office of Inspector General

• Audit report
• Audit report
• Audit reports

CFIUS / Exon-Florio