CFIUS Screening for Foreign Investors
National security review process for foreign acquisitions of US businesses
CFIUS at a Glance
45+45
Review Days
Initial + investigation
30
Declaration Days
Short-form review
$5M
Penalty Risk
Per violation
~15%
Filing Rate
Deals with foreign buyers
What is a Covered Transaction?
CFIUS reviews transactions that could result in foreign control of a US business or grant foreign persons access to sensitive information or technology.
Control Transactions
- Acquisition of voting interest
- Merger with US business
- Asset purchase giving control
- Change in investor rights
- Long-term lease of facilities
Non-Control Investments (TID)
- Board seat or observer rights
- Access to material non-public info
- Substantive decision involvement
- Critical technology access
- Sensitive personal data access
TID US Business Categories
TID businesses face stricter CFIUS scrutiny
TID stands for Technology, Infrastructure, and Data. These categories receive enhanced review.
Critical Technology
- Defense articles (ITAR controlled)
- Export controlled items (EAR)
- Nuclear equipment (10 CFR Part 110)
- Select agents and toxins
- Emerging/foundational tech
Critical Infrastructure
- Telecommunications systems
- Energy/power infrastructure
- Water treatment facilities
- Transportation systems
- Financial infrastructure
Sensitive Personal Data
- Data on 1M+ US persons
- Genetic data on any amount
- Financial data
- Health records
- Geolocation data
When is Filing Mandatory?
Failure to file when required: Up to $5M penalty
Mandatory Filing Triggers
- TID business + foreign government interest (25%+)
- Critical technology requiring US govt authorization
- Substantial interest by listed countries
- Specific sectors designated by Treasury
Voluntary but Recommended
- Government contractor status
- Proximity to military installations
- Prior CFIUS concerns in sector
- High-risk investor country
Declaration vs. Full Notice
Short-Form Declaration
- 5 pages maximum
- 30-day review period
- Lower preparation cost
- May request full notice
- Good for low-risk transactions
Full Notice
- Comprehensive filing
- 45-day initial review
- + 45-day investigation possible
- Required for complex deals
- Higher legal fees
CFIUS Review Timeline
Declaration Path
- Day 1: Declaration accepted
- Day 1-30: Assessment period
- Day 30: Response issued
- Outcomes: Clear, request notice, or unable to conclude
Full Notice Path
- Day 1-45: Initial review
- Day 45: Clear or investigate
- Day 46-90: Investigation (if needed)
- Day 90+: Presidential review (rare)
Possible CFIUS Outcomes
Positive Outcomes
- No action letter (cleared)
- Safe harbor granted
- Mitigation agreement accepted
Negative Outcomes
- Presidential block order
- Forced divestiture
- Transaction abandonment
Country of Origin Risk Factors
China, Russia, Iran, North Korea face highest scrutiny
High Scrutiny Countries
- China (PRC)
- Russia
- Iran
- North Korea
- Cuba, Venezuela, Syria
Lower Risk Indicators
- NATO/Five Eyes countries
- Japan, South Korea, Australia
- EU member states
- Countries with security agreements
Sector Sensitivity Analysis
High Sensitivity
- Semiconductors and AI
- Aerospace and defense
- Biotech and pharmaceuticals
- Telecommunications
- Cybersecurity
Lower Sensitivity
- Retail and hospitality
- Food and beverage
- General manufacturing
- Professional services
- Real estate (non-sensitive locations)