New CFIUS Enforcement Guidelines: Executive Briefing
On October 20, 2022, the U.S. Department of the Treasury (“Treasury”), in its role as chair of the Committee on Foreign Investment in the United States (“CFIUS”), issued the first-ever CFIUS Enforcement and Penalty Guidelines (the “Guidelines”). The Guidelines apprise the public of CFIUS’s intention to penalize violations of the CFIUS regulations, emphasize the importance of voluntary self-disclosures of violations, and provide a basic overview of the penalty process.
As a threshold matter, it is important to clarify what constitutes a “violation” in the CFIUS context. The relevant regulations provide for CFIUS review of certain foreign investments in U.S. businesses and empower CFIUS to block or mitigate such investments on national security grounds. While CFIUS retains broad discretion to take such action in the context of transactions, “violations” punishable by monetary penalties only arise in specific circumstances.
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