The AFIP echoes these concerns and directs consideration of expanded authorities relating to greenfield investments, real estate near sensitive facilities, research facilities and other assets that may provide foreign adversary actors with strategic access or leverage. Focus on China The House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party has continued to press for a broader and more restrictive approach to China-related investment risk. Members of Congress have focused in particular on military- civil fusion, real estate near sensitive U.S. facilities, agricultural land, technology transfer, data access and supply-chain leverage. At the state level, a patchwork of national-security- oriented land restrictions has also expanded, with some measures specifically targeting Chinese investors. Enforcement actions directed at Chinese- affiliated entities have intensified, as evidenced by the presidential divestment order (and subsequent DOJ judicial enforcement action) in the Suirui/Jupiter Systems matter discussed above. Ongoing geopolitical tensions between the United States and China continue to be a central factor that should be carefully weighed in any transactional risk assessment. While U.S.-China geopolitical tensions remain central to CFIUS risk assessment, the Trump administration has also announced preliminary discussions regarding a potential bilateral “Board of Investment” between the United States and China, described by the White House as a government-to-government forum for discussing investment-related issues. The concept remains undefined and should not be described as modifying CFIUS jurisdiction, creating an exemption from CFIUS review or providing transaction-level pre-clearance unless and until formal guidance, rules or procedures are issued. If developed, the mechanism may provide a diplomatic channel for identifying categories of investment that do not present national security concerns, but the Committee’s statutory
risk-based review framework would remain controlling absent legal change. Changes to the CFIUS Regulations In November 2024, Treasury released a final rule further defining the scope of CFIUS’ authority as it relates to enforcement actions and setting penalties. The changes to CFIUS’ implementing regulations (31 C.F.R. Part 800 and 802) build on CFIUS’ Enforcement and Penalty Guidelines, which were published in October 2022, and reflect lessons learned by CFIUS with respect to compliance, deterrence, enforcement and addressing U.S. national security risks in connection with CFIUS’ work. Key changes to the CFIUS regulations include: ^ Timing constraints for CFIUS mitigation negotiations. CFIUS may now impose a deadline of no fewer than three business days for transaction parties to provide a substantive response to proposed mitigation agreement terms, including initial proposals and subsequent revisions, unless CFIUS grants an extension. If parties fail to respond within the specified timeframe, CFIUS may reject the notice under review, increasing timing and execution risk for parties that are not prepared to negotiate mitigation efficiently. ^ Enhanced ability to investigate and request information . CFIUS may request the following types of information from transaction parties: (i) information to monitor compliance with or enforce the terms of a mitigation agreement, order or condition; (ii) information to determine whether transaction parties have made material misstatements or omitted material information during the course of previously concluded review or investigation (including in such cases where the transaction parties’ CFIUS filing was rejected by CFIUS); and (iii) information necessary to determine whether the non-notified transaction would constitute a “covered transaction” that is subject to CFIUS’ jurisdiction for review. In
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