Understanding the Role of CFIUS in Real Estate Transactions with Foreign Buyers and Lenders
The Committee on Foreign Investment in the United States (“CFIUS”) is an interagency committee, chaired by the Department of the Treasury, authorized to review and investigate foreign investments in the United States to evaluate potential threats to national security posed by such transactions. CFIUS has authority to initiate review of any foreign investment in the U.S. that results in control of a U.S. company and that may negatively affect the national security of the United States.
Key national security concerns historically considered by CFIUS include whether the transaction involves secured facilities, government facilities, export-controlled information, U.S. government contracts, critical infrastructure, a foreign government purchaser, the opportunity for surveillance or sabotage, the acquirer’s prior dealings with governments or entities unfriendly to the United States, and the post-acquisition plans for the acquired business. Chinese investments in the United States continue to be the leading source of most cases filed with CFIUS, followed by investments from the United Kingdom, Canada, Japan, and France. In 2014, notices from Germany, Israel, the Netherlands, South Korea, Switzerland, and the United Kingdom doubled from the prior year levels.
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“Understanding the Role of CFIUS in Real Estate Transactions with Foreign Buyers and Lenders,” by Brian S. Gocial, George T. Boggs, and Martin Luskin was published in the Winter/Spring 2017 edition of The Real Estate Finance Journal, a Thomson Reuters publication. Reprinted with permission.
This article was first published in the December 2016 edition of Foundation, Blank Rome’s quarterly real estate newsletter.