An Overview of CFIUS and Its Increasing Influence on Cross-Border Transactions under the Trump Administration

The Committee on Foreign Investments in the United States (“CFIUS”), a government inter-agency body that is responsible for vetting cross-border transactions for national security interests, is taking on an increasingly influential role in the Trump administration.

The Committee on Foreign Investments in the United States (“CFIUS”), a government inter-agency body that is responsible for vetting cross-border transactions for national security interests, is taking on an increasingly influential role in the Trump administration.

In 2016, CFIUS reviewed somewhere between 100 to 150 transactions. According to a Treasury Department official, this number is expected to reach close to 200 in 2017.

To give you a better understanding of CFIUS and answer what its increased activity may mean for you, we provide the Who, What, When, Why, Where, and How of the Committee on Foreign Investments.

What is CFIUS?

CFIUS is an inter-agency committee of the United States government that reviews foreign investments in U.S. companies to assess its implications on national security. CFIUS is led by the United States Secretary of the Treasury and the Committee members include representatives from 16 U.S. departments and agencies, including the Defense, State and Commerce, and the Department of Homeland Security.

Why does it exist?

CFIUS was established by President Gerald Ford in 1975 to monitor the impact of foreign investment in the United States with the purpose of implementing United States policy on such investments. In 1988, Congress enacted the Exon–Florio Amendment that empowered the President to review and block proposed foreign mergers, acquisitions, and takeovers if such transactions were deemed to pose a threat to national security. President Ronald Reagan thereafter delegated the review process to CFIUS while retaining presidential power to block foreign investments forwarded by CFIUS.

Who does CFIUS concern?

Transactions involving foreign control of agricultural, mining, manufacturing, construction, financial services and utilities are especially likely to come under CFIUS review. Deals involving the transfer of intellectual property relating to biopharmaceutical, telecommunication, and energy are also likely candidates for CFIUS review.

In recent years, CFIUS has expanded the types of transactions it examines. For example, under the Obama administrative, CFIUS began reviewing transactions involving “large data sets that could involve personal data” of U.S. citizens; these types of transactions are now receiving heightened scrutiny under the Trump administration as well as transactions affecting cybersecurity and new technologies with military and civilian applications, such as artificial intelligence. Furthermore, under the Trump administration, CFIUS’s analysis has expanded to assess the transaction’s implications on economic security in addition to national security concerns. In the past, a CFIUS analysis did not address concerns about jobs and trade reciprocity, but that may be changing under the Trump administration.

How does CFIUS conduct its process?

All companies involved in an acquisition by a foreign entity must voluntarily notify CFIUS, but CFIUS can review transactions that are not voluntarily submitted.

Once CFIUS receives the notice or elects to review a proposed transaction, the company must provide extensive information regarding the transaction for CFIUS’s review. Once CFIUS receives all of the requested information, it has 30 days to review the transaction. If deemed necessary, CFIUS can order another 45-day investigation. If CFIUS concludes that a transaction does not present any problems, the parties receive a “safe harbor” and the transaction can proceed.

Most transactions reviewed by CFIUS are approved. However, if CFIUS finds that a transaction presents certain risks that can be mitigated, it can recommend a mitigation. CFIUS can also recommend the deal be abandoned if it doesn’t see a way to mitigate the risks.  The parties may follow CFIUS’s recommendation to mitigate or voluntarily abandon the transaction. If, however, the parties choose not to follow CFIUS’s recommendation to mitigate or abandon the transaction, CFIUS will send the case to the President, who can order the parties to mitigate or abandon the deal.

Where is there more risk of heightened CFIUS scrutiny?

Transactions involving Chinese (and to a lesser extent, Russian) acquirers have faced heightened CFIUS scrutiny.  According to a CFIUS report, 29 out of 143, which represents 20% of transactions it reviewed in 2015 were deals involving Chinese companies.  

Since the inception of CFIUS, U.S. presidents have blocked only four foreign investments over national security concerns, all of which involved Chinese entities. Most recently on September 13, 2017, President Donald Trump issued an Executive Order to block the proposed sale of Lattice Semiconductor Corp., an Oregon company that manufactures programmable logic devices, to Canyon Bridge Capital Partners, a Chinese consortium.  The U.S. government cited to national security risks for blocking the transaction.

As tensions escalate between North Korea and China, some legislators have proposed even more heightened scrutiny when reviewing Chinese deals.

When should I be concerned?

Now. Due to the increase in the number of CFIUS filings and the number of transactions being reviewed, the processing time for CFIUS pre-review and review is getting longer than before.  For example, the average time for CFIUS to accept a draft for review has increased from two weeks to six weeks. 

Foreign companies and individuals looking to buy U.S. companies or assets should prepare for the possibility of a lengthy CFIUS review, especially if such companies and assets implicate national security concerns.

Leave a Reply

Close Menu


Jen Kim is a Senior Counsel at Parsus LLP. Jenspecializes in cross-border M&A, investment and financing transactions.Shebrings a wealth of cross-border legal experience and cultural knowledge to facilitate multinational clients doing business in Asia and the U.S. Jen is an English-Korean bilingual corporate attorney who spent the first 8 years of her career at big law firms, initially in the Chicago office of Drinker Biddle &Reath then at Kim & Chang in South Korea. At Drinker Biddle &Reath, her practice focused on transactional work including M&A, private equity and partnership investments.At Kim & Chang, in addition to transactions, she worked on a broad range of matters for multinational clients in the life sciences, healthcare and chemical industries, serving as the outside general counsel for their operations in South Korea and the broader Asia Pacific region. Most recently, Jen was in-house at Reckitt Benckiser, a global consumer health company with well-known consumer brands in the US such as Lysol, Mucinex, Air Wick and Enfamil.  At Reckitt Benckiser, she was a member of the senior management team in Seoul looking after all legal and compliance matters for its Korea and Japan businesses before transitioning to her role in Chicago where she managed the integration of the company’s newly acquired infant formula business and led the North America health business in data privacy matters.

Jen graduated from EwhaWomans University majoring in business administration and received her J.D. degree from Northwestern University Pritzker School of Law.

David Kim| PARTNER

David Kim is a Partner at Parsus LLP. He specializes in corporate and technology transactions, with an emphasis on intellectual property. David has represented a variety of clients from start-ups to Fortune 500 companies in mergers and acquisitions, cross-border investment, financing, and licensing. His clients do business in a range of industries including entertainment, financial services, consumer products, gaming, software, and technology services.

Prior to returning to Parsus LLP, David served as an in-house intellectual property counsel for NBCUniversal, advising on technology and mergers and acquisitions for the various business units of the company. He assisted the company’s corporate development teams in assessing acquisition targets and negotiated NDAs, vendor service agreements, software and hardware licenses, and trial agreements for experimental and prototype technology. David was also one of the company’s primary resources on open source software-related matters.

Before joining NBCUniversal, David co-founded and served as a Partner of Parsus LLP, worked as in-house counsel for start-ups, and was an associate at Winston & Strawn, where he represented clients in intellectual property matters including patent assessment and analysis, IP licenses, and various phases of patent and copyright infringement litigation. At Winston, David also represented clients in general business and securities litigation concerning commercial disputes and business torts.

David received his A.B. degree from Harvard University and his J.D. degree from UCLA School of Law. 

Kristen Lee

Kristen Lee is an associate attorney at Parsus  LLP.  Her practice is focused on commercial transactions and the various day-to-day legal needs of businesses of all sizes, including business formation, corporate governance, commercial contracts, and mergers and acquisitions. Prior to joining Parsus, Kristen represented corporate clients in high-stakes litigation involving breach of contract, fraud, unfair competition, and other business torts.  

Kristen is a member of the Korean American Bar Association of Southern California.

Kristen received her B.A. degree from the University of Texas at Austin and her J.D. degree from Pepperdine School of Law.  Kristen is fluent in Korean. 


Evelyn Aguilar Shimazaki is Of Counsel at Parsus LLP. Her practice is focused on the representation of technology companies in intellectual property licensing and commercial transactions, including joint development, manufacturing, procurement, strategic alliances, outsourcing and other services arrangements. Prior to joining Parsus LLP, Evelyn was a Senior Counsel at Apple in Cupertino, California for fourteen years. After Apple, she joined Tesla in Palo Alto, California as Chief Counsel and more recently, Oculus VR, a division of Facebook in Menlo Park, California as a Consultant.  

Evelyn is a Founding Board Member of UCLA Law Women LEAD, an Advisory Board Member of the Lowell Milkin Institute of Business Law and Policy at UCLA School of Law, and a past President and Advisory Board Member of the Philippine American Bar Association of Los Angeles.

Evelyn received her B.A. degree from the University of California, Berkeley and her J.D. degree from UCLA School of Law. A native of the Philippines, Evelyn speaks Tagalog, Spanish and some Japanese.

Ju Park

Ju is a corporate lawyer by training and an entrepreneur at heart.  After attending the United States Military Academy at West Point for a year where she gained essential life skills including throwing grenades and applying a tourniquet, she graduated from McCombs Business School at the University of Texas majoring in finance.  Ju then graduated from UCLA School of Law where she focused her studies on International Business Law.  After law school, she practiced corporate law and litigation in the Los Angeles and Hong Kong offices of an international renowned law firm, Latham & Watkins, where she advised domestic and foreign clients, including Fortune 500 companies, on various corporate matters including general commercial contracts, corporate finance, IPOs and mergers and acquisitions.

Ju co-founded Parsus in 2009 with a vision to transform the legal services industry to make quality legal advice more available to and affordable for businesses of all sizes while improving the lifestyle and overall happiness of lawyers.  Over the years, and particularly since recently becoming a mother, Ju’s vision for Parsus has expanded to transform our extended community by committing a part of the firm’s profits and resources for charitable purposes.

In her role at Parsus LLP, Ju serves as outside transactional and general counsel to clients of all sizes and across a broad range of industries.  Her clients include domestic and foreign companies to whom she provides practical and cost-effective solutions to their general day-to-day business legal matters as well as major transactions such as mergers and acquisitions, corporate finance and cross-border transactions.  Ju combines her legal expertise with her business acumen to provide practical solutions to her clients’ legal issues without “over-lawyering” their contracts or deals.  Ju’s recent clients have included foreign and US companies acquiring and/or investing in US companies or assets, US companies receiving foreign and domestic investments, US subsidiaries of foreign companies going public, and foreign companies with ongoing US operations.  Ju also enjoys working with like-minded entrepreneurs and start-up executives.