On August 2, 2022, the Treasury Department, as the lead agency of the Committee on Foreign Investment in the United States (CFIUS), released a public version of its annual report to Congress regarding foreign direct investment in the United States. Assistant Secretary for Investment Security Paul Rosen stated, “This year’s Annual Report demonstrates that CFIUS is reviewing a record number of transactions and taking important and necessary measures to safeguard national security, while also quickly clearing benign investments.” Key highlights from the 2021 report include:
- CFIUS reviewed a record number of covered transactions, including 272 full notices and 164 declarations.
- Regarding full notices, of the 272 filings, 130 moved into the second phase investigation after the initial 30 day review period. Nine transactions were withdrawn by the parties after CFIUS informed the parties that it could not identify mitigation measures that would resolve its national security concerns, or it proposed mitigation measures that the parties chose not to accept.
- Regarding the declarations, CFIUS cleared 120 with no action, while the parties to 30 transactions were directed to file full notices; for 12 of the declarations CFIUS was unable to conclude actions, and CFIUS rejected two declarations.
- CFIUS cleared nearly 60 percent of cases in either the 30-day assessment period for a declaration or the initial 45-day review period for a notice.
- On average, CFIUS provided comments on draft notices within 6.2 business days and accepted formal notices within 6 business days, down from 9.1 days in 2020.
- CFIUS continued to complete action on a majority of cases without conditions, and in 2021 only ten percent (26 transactions out of 272 filed) involved mitigation measures.
- There were no presidential reviews or actions taken on 2021 transactions.
- Of the filings CFIUS received in 2021, approximately 55% involved the financial, information and services sectors, 28% involved the manufacturing sector, 12% involved the mining, utilizes and construction sector, and the remaining 4% involved wholesale and retail sales and transportation.
- In 2021, the highest number of files involved Chinese investors accounting for 16.5% (44 notices), followed by Canada at 10.3% (28 filings) and Japan at 9.6% (26 filings).
- CFIUS reviewed 184 covered transactions involving acquisitions of U.S. critical technology companies in 2021. Of these critical technology reviews, major allied countries accounted for many of the transactions: Germany (16); United Kingdom (16); Japan (15); South Korea (13), the Cayman Islands (12); Israel (11); and Canada (10). China and Russia accounted for 10 and 5 critical technology reviews, respectively.
The report also indicates that in 2021, CFIUS staff identified numerous potential non-notified transactions. Sources for such information on non-notified transactions were interagency referrals, tips from the public, media reports, commercial databases, and congressional notifications. Ultimately, 135 transactions were identified in this manner; from these transactions, eight resulted in a CFIUS request for filing.