The government shutdown, which is now in its fourth week, is causing a backlog of cases that will need to be reviewed by the Committee on Foreign Investments (“CFIUS”) once the government reopens.
CFIUS is an interagency committee chaired by the Secretary of the Treasury, which reviews certain transactions involving foreign investment in the Unites States in order to determine the effect of such transactions on national security. The shutdown will ultimately cause a delay in the ability of foreign acquirers to finalize transactions involving investments in the United States.
Since the government shutdown that began on December 22, 2018, CFIUS activities have been suspended. CFIUS has only been able to perform “caretaker functions” related to cases filed before the enactment of the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”), which was signed into law in August 2018.
In addition, the deadlines for all other cases that were not initiated prior to the enactment of FIRRMA are “tolled” during the shutdown. Although CFIUS filings can continue to be made during the shutdown, the Committee will not officially accept the filings for review.
The clock will not start running on any cases that are “tolled,” meaning the review or investigation process will not start until after the shutdown ends and CFIUS is able to officially acknowledge receipt of the case. CFIUS members will not be able to examine these transactions in order to identify and address any national security concerns that may arise as a result of the proposed transactions.
A link to the Department of Treasury’s contingency plan can be found here.