CFIUS: Twice as many mitigation-related penalties in 2023 than in five decades
In 2023, the interagency Committee on Foreign Investment in the United States (‘CFIUS’) assessed or imposed four civil monetary penalties for violations of material provisions of mitigation agreements, saying in its annual report to Congress this is ‘double the number of civil monetary penalties that CFIUS had previously issued during its nearly 50-year history.’
‘2023 was a busy year for CFIUS in reviewing transactions for national security risk, monitoring compliance with mitigation agreements, expanding the reach of its jurisdiction, and enforcing against violations of CFIUS legal authorities,’ said the Treasury Department’s Assistant Secretary for Investment Security Paul Rosen. ‘Last year CFIUS sharpened its review and enforcement toolkit while doubling down on efficiency and due diligence in reviewing and investigating covered transactions,’ he explained in a press release published 24 July, together with the public version of the report to Congress.
According to the report, in 2023 investors from China filed the highest number of notices, accounting for 14 percent (33 notices) of total notices, followed by investors from the United Arab Emirates at 9 percent (22 notices). ‘Investors from the United Kingdom (19 notices), Singapore (19 notices), and Canada (16 notices) rounded out the top five respectively,’ the report explained.
For the three-year period from 2021 through 2023, investors from China again filed the highest number of notices, accounting for 13.5 percent (115 notices) of total notices, followed by investors from Singapore with 8.4 percent (72 notices) and Canada with 8.1 percent (69 notices). ‘Japan and the United Kingdom round out the top five with 6.5 percent each (56 notices each),’ the report said.
‘Regarding distinct transactions (i.e., counting only once those transactions that originated as a declaration and were then also filed as a notice, or notices that were refiled), the highest number of notices in 2023 were from investors from Canada, Japan, and the United Kingdom,’ CFIUS told Congress.
Treasury said the highlights from the report include:
- The overall number of covered transactions reviewed or assessed by the Committee (on the basis of a written notice or a declaration) in 2023 was 342.
- In 2023, CFIUS cleared 66 percent of distinct transactions that did not require mitigation measures in either the 30-day assessment period for a declaration or the initial 45-day review period for a notice, an increase from 58 percent in 2022.
- CFIUS assessed or imposed four civil monetary penalties for violations of material provisions of mitigation agreements, double the number of civil monetary penalties that CFIUS had previously issued during its nearly 50-year history.
- CFIUS improved its efficiency and case processing by decreasing withdrawn and refiled transactions, which restart the CFIUS review period, from 24 percent to 18 percent of notices (and from 63 to 43 notices as a total number), the first such reduction in five years.
https://home.treasury.gov/system/files/206/2023CFIUSAnnualReport.pdf
