CFIUS is Key to Safeguarding National Security

April 16, 2018

International companies help broaden the U.S. economy, making it more resilient. They also help open new markets and give other countries a stake in America’s economic success, which also benefits U.S. foreign policy.

In the process of welcoming international companies, we also have an obligation to safeguard our national security interests, so for the small percentage of foreign direct investment that could have national security implications, a comprehensive review of the proposed transaction is overseen by the Committee on Foreign Investment in the United States (CFIUS).

CFIUS is a federal inter-agency committee chaired by the Department of the Treasury and comprised of eight other voting members (the Departments of Commerce, Defense, Homeland Security, Justice, State, and Energy; the U.S. Trade Representative; and the White House Office of Science and Technology), two permanent non-voting members (the Director of

National Intelligence and the Department of Labor), and several other White House offices that act as observers and, on a case-by-case basis, participate in CFIUS reviews.

With its narrow and non-political mandate, the CFIUS process helps to ensure the necessary balance between the protection of vital national security interests and the promotion of global investment in the U.S. economy.

As policymakers consider potential changes intended to modernize CFIUS to keep up with the latest threats, it is critical that the process must continue to be focused on national security and not inadvertently jeopardize the U.S. economy. It cannot become an instrument for influencing trade policies in other countries, for advancing political agendas of protectionism, or for trying to address industrial espionage.

CFIUS needs to be properly resourced to quickly clear transactions that pose no threat to national security and investigate those transactions that might have national security implications. Failure to ensure a timely, predictable process will hurt U.S. competitiveness.