Takeaways from the 2023 9th National Conference on CFIUS

By Nina Kelleher

At the American Conference Institute’s 9th National Conference on CFIUS, regulators, internal and external counsel, third-party monitors, auditors and other subject matter experts gathered in Arlington, Virginia. While they covered many topics within the CFIUS sphere, a few topics emerged repeatedly either from panelists or attendees in the Q&A section:

Penalties – Assistant Secretary of the Treasury for Investment Security Paul Rosen and members of the Department of Justice indicated that there have been penalties imposed for violations of National Security Agreements and that data around those penalties would be disclosed to the public at a later date. Three types of conduct may constitute a violation: failure to file; non-compliance with CFIUS mitigation; and material misstatement, omission or false certification.

Non-Notifieds – A focus on review of non-notified transactions identified by CFIUS in a variety of ways including, but not limited to, press releases, news and media reports, securities filings, public notifications/whistleblowers, and deal databases.

Reverse CFIUS? – While there is nothing official or in place to date, it does seem clear that there is general bipartisan support over some process to review outbound investment. There was also much discussion on President Biden’s executive order signed on September 15, 2022, safeguarding robust considerations of evolving national security risks.

While the event was well-attended by attorneys, regulators and advisors, only a handful of companies that may be impacted by CFIUS were present. This may suggest that transaction parties are in a reactive position after deciding to do a deal instead of factoring CFIUS into their deal due diligence and evaluation from the get-go. In any event, companies should anticipate a continued trend of increased CFIUS enforcement.