CFIUS’s Annual Report Spells Trouble for Dealmakers

This article was originally published in Financier Worldwide. Any opinions in this article are not those of Winston & Strawn or its clients. The opinions in this article are the authors’ opinions only.

On July 31, 2023, the Committee on Foreign Investment in the United States (CFIUS) released its annual report providing statistics for calendar year 2022. With this latest report, CFIUS watchers now have two years’ worth of CFIUS statistics for the Biden administration, and the numbers are not good for dealmakers.

In 2022, CFIUS set a new record for the highest number of withdraw–refiles in a single year, indicating that CFIUS continues to struggle getting its work done within its 90-day statutory deadline. CFIUS also set a record for the highest number of mitigation agreements in a single year. Finally, it set a record for the highest number of notices requested for transactions that were originally filed as declarations, making the new declarations process less efficient.

CFIUS set these records even though Chinese companies are filing fewer transactions, which means CFIUS is spending more time and resources picking apart transactions from countries regarded as neutral, or even as partners and allies.

Overall, the annual report for 2022 shows that the CFIUS process is becoming more difficult to negotiate in a timely and predictable manner and, in some cases, transactions can get bogged down in the CFIUS quagmire for several months.

Read the full article co-authored by associates David Houck and Tommy Leinenweber and published in the October 2023 issue of Financier Worldwide Magazine.

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