Tasked with reviewing foreign acquisitions of U.S. companies, the interagency Committee on Foreign Investment in the United States (CFIUS or the “Committee”) plays a critical role in protecting U.S. infrastructure. Foreign companies making investments in U.S. assets may voluntarily submit to CFIUS review when such transactions may implicate national security concerns. The CFIUS practice at Akin Gump Strauss Hauer & Feld LLP offers extensive experience in advising and representing clients during all stages of possible CFIUS review and in helping companies avoid the possibility of a post-closing CFIUS evaluation and divestiture order.
In its role as the administrator of the foreign investment review process under the Exon-Florio Amendment to the Defense Production Act, CFIUS may, through its executive authority, suspend or prohibit any foreign acquisition, merger or takeover of a U.S. company that “threatens to impair” the national security of the United States. In the CFIUS process, certain transactions face special scrutiny, such as those involving foreign government-owned or-controlled entities and those involving assets in certain sensitive U.S. industries—for example, energy and natural resources, aerospace and defense, and technology. Such review can result in foreign party concessions that restrict that party’s control over, and/or access to, the intended U.S. entity.
Cases that attracted both public and congressional attention due to insufficient CFIUS scrutiny led to the passage of the Foreign Investment and National Security Act of 2007 (FINSA), which expanded the scope of CFIUS investigations and increased congressional oversight of the Committee. Conversant in these laws and their application, Akin Gump’s CFIUS lawyers are committed to helping clients navigate the CFIUS process, and related timelines, to a successful conclusion, in order to permit the closing of transactions without any outstanding CFIUS exposure.
Akin Gump favors a direct and proactive approach in dealing with the Committee at every potential stage of the process. We first evaluate whether a voluntary submission for a CFIUS review is warranted, based on a variety of legal and political considerations. Should a CFIUS review appear necessary, our team engages key Committee members promptly to explain the proposed transaction, provide information about the parties and solicit comments from CFIUS members regarding potential concerns. Such communication and alacrity are essential in cases where transactions are particularly complex or contentious, especially considering the limited time CFIUS has to determine the necessity of a full investigation.
Clients engaged in potentially controversial transactions benefit from the firm’s multifaceted approach, in which not only members of the international trade team, but also lawyers in our national security, communications, public law and policy, corporate and other relevant practices, engage with CFIUS, Congress and executive branch officials, and the media to address potentially sensitive aspects of a transaction. Our attorneys have represented both buyers and sellers before CFIUS, successfully guiding them through the review process and, in most cases, obtaining clearance of the transaction by CFIUS during the initial 30-day review.