What is CFIUS?
CFIUS (the Committee on Foreign Investment in the United States) is an interagency body chaired by the U.S. Department of the Treasury that reviews certain transactions involving foreign investment in U.S. businesses for national-security risks. CFIUS authority traces back to the Defense Production Act of 1950 as amended by the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA).
Which transactions does CFIUS review?
CFIUS reviews mergers, acquisitions, takeovers, and certain non-controlling investments by non-U.S. persons that could result in foreign control of, or specified access to, a U.S. business. FIRRMA expanded the scope to cover non-controlling investments in TID businesses — those dealing in critical technology, critical infrastructure, or sensitive personal data — and certain real-estate transactions near sensitive sites.
Mandatory vs. voluntary filings
Most CFIUS filings are voluntary, but a mandatory declaration is required for some covered investments in TID businesses, particularly where foreign-government ownership thresholds are met or where U.S. export controls would apply to the underlying technology. Failure to file when required can trigger civil penalties up to the value of the transaction.
Process and outcomes
A CFIUS filing typically proceeds through a 45-day review, optional 45-day investigation, and possible Presidential decision. CFIUS can clear a transaction, impose mitigation agreements (governance carve-outs, security officers, NSAs), or recommend that the President block or unwind the deal — as occurred with the 2018 prohibition of Broadcom’s bid for Qualcomm.
Why CFIUS matters in M&A
For cross-border M&A involving U.S. targets — including Turkish or other non-U.S. sponsors — CFIUS risk must be assessed in diligence, allocated in the transaction agreement (regulatory cooperation, reverse termination fees), and reflected in deal timing.