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Overview
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 Topic
covers national security reviews
- Specifically, FINSA provides for a 30-day CFIUS
review of covered transactions to determine the effect of the transactions on national security,
and address any threat
- Section 721, as amended by FINSA, also requires an additional 45-day
investigation in the following types of cases, subject to certain exceptions
(discussed below):
Agency
certifications
- To ensure high-level accountability for CFIUS
decisions, FINSA requires that a high-level official of the Department of the
Treasury and at the lead agency certify to Congress that, for any covered
transaction on which CFIUS has concluded action under section 721, CFIUS has
determined that there are no unresolved national security concerns
- The certification must be made at the Assistant
Secretary level or above for transactions on which CFIUS concludes action under
section 721 after a review, and at the Deputy Secretary level or above for
transactions on which CFIUS concludes action under section 721 after an
investigation.
- If it is the President who concludes action on a
transaction under section 721, then he must announce his decision publicly
- In addition, in order for CFIUS to conclude
action under section 721 for a foreign government-controlled transaction without
proceeding beyond a review to an investigation, the Department of the Treasury
and the lead agency must determine, at the Deputy Secretary level or above, that
the transaction will not impair national security
- Similarly, under sections 721(b)(2)(B)(i)(III)
and 721(b)(2)(D)(i), in cases where the transaction would result in foreign
control over critical infrastructure that could impair national security, and
such impairment has not been mitigated during the review period, CFIUS may
conclude action under section 721 without proceeding beyond a review if the
Department of the Treasury and the lead agency determine, at the Deputy
Secretary level or above, that the transaction will not impair national security
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Statute:
Section 721(b)(1) National security reviews
 (A)
In general
- (i) shall review the covered transaction to
determine the effects of the transaction on the national security
of the United States; and
- (ii) shall consider the factors specified in subsection (f)
for such purpose, as appropriate.
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| (B)
Control by foreign government |
(C)
Written notice- (i) In general.
Any party or parties to any covered transaction
may initiate a review of the transaction under this paragraph by submitting
a written notice of the transaction to the Chairperson
of the Committee.
- (ii) Withdrawal of notice.
No covered transaction for which a notice was submitted under clause (i) may
be withdrawn from review, unless a written request for such withdrawal is
submitted to the Committee by any party to the transaction and approved by
the Committee.
- (iii) Continuing discussions.
A request for withdrawal under clause (ii) shall not be construed to
preclude any party to the covered transaction from continuing informal
discussions with the Committee or any member thereof regarding possible
resubmission for review pursuant to this paragraph.
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(D)
Unilateral initiation of review
- (i) any covered transaction;
- (ii) any covered transaction that has previously
been reviewed or investigated under this section, if any party to the
transaction submitted false or misleading material information to the Committee
in connection with the review or investigation or omitted material information,
including material documents, from information submitted to the Committee; or
- (iii) any covered transaction that has
previously been reviewed or investigated under this section, if --
(I) any party to the transaction or the entity resulting from consummation of
the transaction intentionally materially breaches a mitigation agreement or
condition described in subsection (l)(1)(A);
(II) such breach is certified to the Committee by the lead department or agency
monitoring and enforcing such agreement or condition as an intentional material
breach; and
(III) the Committee determines that there are no other remedies or enforcement
tools available to address such breach.
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(E)
Timing- Any review under this paragraph
shall be completed before the end of the 30-day period beginning on the date
of the acceptance of written notice under subparagraph (C) by the
chairperson, or beginning on the date of the initiation of the review in
accordance with subparagraph (D), as applicable.
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(F)
Limit on delegation of certain authority-
The authority of the Committee to initiate a review under subparagraph (D)
may not be delegated to any person, other than the Deputy Secretary or an
appropriate Under Secretary of the department or agency represented on the
Committee.
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Legislative
history- Section 2 of FINSA
(2007)
amended section 721(b) in its entirety
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| Related
Topic Pages |
Section 721(b)(5)/(6)
Other statutory provisions
721(b)(5) Submission
of additional information.- No provision
of this subsection shall be construed as prohibiting any party to a covered transaction from submitting additional information concerning the
transaction, including any proposed restructuring of the transaction or any
modifications to any agreements in connection with the transaction, while
any review or investigation of the transaction is ongoing.
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721(b)(6)
Notice of results to parties.- The Committee
shall notify the parties to a covered transaction of the results of a review
or investigation under this section, promptly upon completion of all action
under this section.
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Legislative
history- Section 2 of FINSA
(2007)
amended section 721(b) in its entirety
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| Related
Topic Pages |
31 CFR 800.501 General SEC_CODE_REF_0090001192884
(a)
___________
- (a) The Committee's review or investigation (if necessary) shall
examine, as appropriate, whether:
- (1) The transaction is by or with any foreign
person and could
result in foreign control of a U.S. business;
- (2) There is credible evidence to support a
belief that any foreign
person exercising control of that U.S. business might take action that
threatens to impair the national security of the United States; and
- (3) Provisions of law, other than section 721
and the International
Emergency Economic Powers Act (50 U.S.C. 1701-1706), provide adequate
and appropriate authority to protect the national security of the
United States.
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(b)
___________
- During the thirty-day review period or during an investigation,
the Staff Chairperson may invite the parties to a notified transaction
to attend a meeting with the Committee staff to discuss and clarify
issues pertaining to the transaction. During an investigation, a party
to the investigated transaction may request a meeting with the
Committee staff; such a request ordinarily will be granted.
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(c)
___________
- The Staff Chairperson shall be the point of contact for
receiving material filed with the Committee, including notices.
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(d)
___________
- The Staff Chairperson shall be the point of contact for
receiving material filed with the Committee, including notices.
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- Proposal release
- Section 800.501. A new paragraph (c) has been
added to this section
to clarify the Chairperson's role in overseeing the secretariat
function for CFIUS. Parties contemplating filing notices or that have
filed notices should therefore work with the Staff Chairperson, who may
arrange contacts or meetings with other member agencies as appropriate.
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31 CFR 800.502 Beginning of thirty-day review
period
(a)
___________
- (a) The Staff Chairperson of the Committee shall accept a voluntary
notice the next business day after the Staff Chairperson has:
- (1) Determined that the notice complies with
Sec. 800.402; and
- (2) Disseminated the notice to all members of
the Committee.
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(b)
___________
- A thirty-day period for review of a transaction shall commence
on the date on which the voluntary notice has been accepted, agency
notice has been received by the Staff Chairperson of the Committee, or
the Chairperson of the Committee has requested a review pursuant to
Sec. 800.601(b). Such review shall end no later than the thirtieth day
after it has commenced, or if the thirtieth day is not a business day,
no later than the next business day after the thirtieth day.
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(c)
___________
- The Staff Chairperson shall promptly and in writing advise all
parties to a transaction that have filed a voluntary notice of:
- (1) The acceptance of the notice;
- (2) The date on which the review begins; and
- (3) The designation of any lead agency or
agencies.
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(d)
___________
- Within two business days after its receipt by the Staff
Chairperson, the Staff Chairperson shall send written advice of an
agency notice to the parties to a covered transaction. Such written
advice shall identify the date on which the review began.
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(e)
___________
- The Staff Chairperson shall promptly circulate to all Committee
members any draft pre-filing notice, any agency notice, any accepted
notice, and any subsequent information filed by the parties.
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- Proposal release
- Section 800.502. Provisions on commencing review
(which were
previously in section 800.404 of subpart D) have been consolidated with
provisions regarding the beginning of the 30-day review period in
section 800.502. The proposed regulations also provide that the 30-day
review period will commence on the next business day after the Staff
Chairperson has determined that the notice is complete and has
disseminated the notice to all CIFUS members, which the Staff
Chairperson is required to do promptly.
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31 CFR 800.701 Obligation of parties to provide information
(a)
___________
- Parties to a covered transaction that is notified under subpart
D shall provide information to the Staff Chairperson that will enable
the Committee to conduct a full review and/or investigation of the
proposed transaction, and shall promptly advise the Staff Chairperson
of any material changes in plans or information pursuant to Sec. 800.402(h). If deemed necessary by the Committee, information may be
obtained from parties to a covered transaction or other persons through
subpoena or otherwise, pursuant to 50 U.S.C. App. 2155(a).
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(b)
___________
- Documentary materials or information required or requested to
be filed with the Committee under this part shall be submitted in
English. Supplementary materials, such as annual reports, written in a
foreign language, shall be submitted in certified English translation.
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(c)
___________
- Any information filed with the Committee by a party to a
covered transaction in connection with any action for which a report is
required pursuant to section 721(l)(3)(B) with respect to the
implementation of a mitigation agreement or condition described in
section 721(l)(1)(A) shall be accompanied by a certification that
complies with the requirements of section 721(n) and Sec. 800.201. A
sample certification may be found at the Committee's section of the
Department of the Treasury Web site at
http://www.treas.gov/offices/
international-affairs/cfius/index.shtml.
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(d)
___________
- At the conclusion of a review or investigation, each party that
has filed additional information subsequent to the original notice
shall file a final certification. (See Sec. 800.201.) A sample
certification may be found at the Committee's section of the Department
of the Treasury Web site at
http://www.treas.gov/offices/international-
affairs/cfius/index.shtml.
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- Proposal release
- Section 800.701. FINSA includes an
important provision that
requires each notifying party to certify in writing that the
information it provides to CFIUS is complete and accurate as it relates
to itself and the transaction. This requirement pertains both to the
information in the voluntary notice (see Sec. 800.402(k)) and to
follow-up information. CFIUS may consider a party's failure to provide
a certification with regard to follow-up information to be a material
omission. (See Sec. 800.601(e).)
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Related Topics
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