The U.S. Department of the Treasury recently submitted its annual report to Congress on the work of the Committee on Foreign Investment in the United States (CFIUS) in calendar year 2023, issued pursuant to the Defense Production Act of 1950, 50 USC § 4565, as amended. Following a brief introduction about CFIUS, its composition, authority, processes and increased efforts to utilize and enhance its enforcement tools, the seventy page report, which was released on July 23, 2024, describes the transactions handled by the Committee and notable developments from 2023.
While the case load remained significant, there were fewer transactions filed in 2023 than in preceding years – 342 in total, with about 2/3 filed through notices and 1/3 through the short-form declaration process. However, the number of transactions cleared within the first 30- or 45-day period increased from 58 percent in 2022 to 66 percent in 2023.
The Committee reported that it improved the efficiency with which it reviewed and investigated cases while remaining focused on diligence, compliance, and the enforcement of CFIUS authorities. In 2023, the Committee also assessed or imposed four penalties, which is more than double the total number previously imposed in its nearly 50-year history, including the first penalty issued by the Committee under the regulations implementing the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”). For the first time ever, the Committee also issued formal determinations of noncompliance specifically related to a failure to comply with mandatory filing provisions under 31 CFR § 800.40. In addition, for the first time in five years, CFIUS reduced the withdraw and refile rate from 23 percent in 2022 to 18 percent in 2023. A key finding in the report was that economic, industrial and cyber espionage by foreign actors such as China, Russia, Iran and North Korea continues to pose a significant threat to U.S. security, prosperity, and competitive advantage.
U.S. Department of Treasury Press Release | CFIUS Annual Report – CY 2023