August 20, 2024

CFIUS updates website to include enforcement actions with civil monetary penalties

The U.S. Department of the Treasury recently announced that it updated the website for the Committee on Foreign Investment in the United States (“CFIUS”) in an effort to provide the public and the investing community with additional details regarding penalty actions issued in recent years as well as guidance on how the Committee approaches compliance and enforcement.  The website describes, with added transparency, a number of helpful details about the civil monetary penalties imposed by CFIUS, including the nature of the conduct that led to the penalty and mitigating and aggravating factors that the Committee considered when imposing the penalties.  According to the Department of Treasury, CFIUS has issued three times more penalties in 2023 and 2024 (to date) than was previously issued its nearly 50-year history.

One of the enforcement actions featured on the CFIUS website involves telecommunications company T-Mobile US, Inc.  CFIUS reported that, in 2024, it imposed a $60 million penalty against T-Mobile for violating the terms of a National Security Agreement (“NSA”) that the company signed with the CFIUS in 2018 related to the company’s merger with Sprint and the foreign ownership of the resulting entity.  According to CFIUS, between 2020 and 2021, “T-Mobile failed to take appropriate measures to prevent the unauthorized access to certain sensitive data and failed to report some incidents of an authorized access promptly to CFIUS,” in violation of a material provision in the NSA – actions that allegedly delayed CFIUS’s investigation and mitigation efforts and ultimately harmed “the national security equities of the United States.”  Following the action, T-Mobile has reportedly worked with CFIUS to improve its compliance program and has agreed to cooperate with the federal government to ensure that it meets its compliance obligations going forward.

U.S. Department of Treasury Press Release | CFIUS Enforcement Website