Committee on Foreign Investment in the United States - CFIUS

Foreign countries have devised many ways to get their hands on our technology, and one of them is to buy a U.S. company. Once this happens, the technology (as well as profits) might be transferred to a country that has been sanctioned by the U.S. government, meaning high tariffs were placed or financial transactions are restricted.

So, in 1975, President Gerald Ford established the Committee on Foreign Investment in the U.S., better known as CFIUS.

Run by the U.S. Treasury, with other departments such as Defense, Commerce, State, and Homeland Security, their purpose is to review foreign investments in U.S. companies that might have major implications for the United States’ national interests. All companies that will be involved in an acquisition by a foreign firm are supposed to voluntarily notify CFIUS, but CFIUS can review them even if they don’t. The CFIUS committee takes 30 days to decide whether to authorize the transaction or begin an investigation, which can happen about 40% of the time.

There have been many instances where CFIUS did not approve an acquisition and the deal fell through. As just two examples, in 2017 President Trump blocked the acquisition by a Chinese purchaser of Lattice Semiconductor, and in 2018 he blocked Singapore-based Broadcom Limited from purchasing Qualcomm in a hostile takeover, citing national security concerns raised by CFIUS. So, thankfully, CFIUS takes their responsibilities very seriously, and is not your average rubber-stamp type of government authority.