WASHINGTON — Today, the U.S. Department of the Treasury, as Chair of the Committee on Foreign Investment in the United States (CFIUS), issued a Notice of Proposed Rulemaking (NPRM) to enhance certain CFIUS procedures and sharpen its penalty and enforcement authorities. The proposed rule reflects CFIUS’s evolution and increased focus on monitoring, compliance, and enforcement. It also marks the first substantive update to the mitigation and enforcement provisions of the CFIUS regulations since the enactment and implementation of the Foreign Investment Risk Review Modernization Act of 2018, which amended CFIUS’s governing statute (section 721 of the Defense Production Act of 1950). The proposed rule hones CFIUS’s ability to accomplish its national security mission consistent with the United States’ open investment policy.
CFIUS is authorized to review certain transactions involving foreign investment into businesses in the United States and certain transactions by foreign persons involving real estate in the United States in order to determine the effect of such transactions on the national security of the United States. CFIUS enforces transaction parties’ compliance with its statute and regulations, as well as agreements entered into and conditions and orders imposed under such authorities, through its authority to impose civil monetary penalties and seek other remedies.
The proposed rule would refine and enhance CFIUS’s authorities through the following key changes:
“As CFIUS has refined its focus on compliance and enforcement, we’ve identified important enhancements to our regulations to more effectively deter violations, promote compliance, and swiftly address national security risks in connection with CFIUS reviews,” said Assistant Secretary for Investment Security Paul Rosen. “These updates reflect lessons learned in the course of our monitoring, compliance, and enforcement work and build on the 2022 CFIUS Enforcement and Penalty Guidelines.”
In assessing compliance and whether to bring an enforcement action in a particular case, CFIUS will continue to evaluate the facts and circumstances surrounding the conduct including the aggravating and mitigating factors described in the CFIUS Enforcement and Penalty Guidelines.
Treasury continues to assess other aspects of CFIUS’s authorities to determine whether additional regulatory enhancements are appropriate.
Treasury encourages the public to submit written comments in response to the proposed rule. Comments will be accepted for 30 days following publication in the Federal Register.
More information is available on the CFIUS webpage.
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