The Committee on Foreign Investment in the United States (CFIUS) recently published its 2022 Annual Report, which provides information regarding transactions reviewed by CFIUS in 2022.[1]  Key takeaways from the 2022 Annual Report are below.

1. CFIUS reviewed a record number of transactions during 2022.

  • In 2022, CFIUS reviewed 440 notices and declarations of covered transactions or covered real estate transactions, of which 154 were short-form declarations and 286 were full notices.  CFIUS reviewed 436 notices and declarations in 2021 (164 declarations and 272 notices).[2]

2. CFIUS cleared a majority of transactions in either 30-day assessment period or initial 45-day review period in 2022.

  • CFIUS cleared 58% of transactions in either the 30-day assessment period for declarations or the initial 45-day review period for notices (i.e., such notices did not proceed to the additional 45-day investigation period).

3. A lower percentage of declarations received clearance in 2022 compared to 2021 and 2020.

  • Of the 154 declarations submitted to CFIUS in 2022 (compared to 164 in 2021), 90 received clearance.  This 58% clearance rate was a decrease from 73% in 2021 and 64% in 2020.  Although there was a decrease in 2022, this still means that more than half of declarations receive clearance at the conclusion of the 30-day assessment period, which likely will still encourage foreign investors, particularly those that previously have been through the CFIUS process, to file declarations instead of notices despite the risk that CFIUS could request a full notice at the end of the declaration review process.
  • CFIUS requested that parties submit full notices in connection with 32% (50 out of 154) of the declarations reviewed in 2022.  This is an increase from 18% in 2021.  28% of the 2022 declarations (44 out of 154) were subject to a mandatory filing requirement, compared to 29% of the declarations in 2021.
  • CFIUS did not conclude action on 9% (14 out of 154) of the 2022 declarations, compared to 7% in 2021.  Faced with that outcome (which sometimes is referred to as the “shoulder shrug”), parties can decide whether or not to submit a full notice.  If they decide not to do so, CFIUS has the ability to inquire about and review the transaction in the future.  Receipt of a shoulder shrug often is considered to satisfy CFIUS clearance closing condition requirements.
  • For the third year in a row, investors from Canada accounted for the highest number of declarations (22), followed by investors from Japan (18), Germany (13), South Korea (11), France (9), Singapore (9), United Kingdom (8), and UAE (7).

4. A higher percentage of notices proceeded to the investigation period in 2022 compared to 2021.

  • Of the 286 notices filed in 2022, 162 (approximately 57%) proceeded to the additional 45-day investigation period, which is an increase from 48% in 2021.
  • 88 of the 286 notices (31%) were withdrawn, compared to 27% in 2021.  68 of those notices were re-filed, with 53 re-filing in 2022 and 15 in 2023.  12 notices (approximately 14%) were abandoned by the parties after CFIUS informed the parties that it was unable to identify mitigation measures that would resolve its national security concerns, or CFIUS proposed mitigation measures that the parties were not willing to accept.  In eight instances, the parties withdrew and abandoned the transaction due to commercial reasons.
  • Similar to 2021, 2022 did not include any presidential decisions.
  • On average, CFIUS provided comments on draft notices within approximately seven business days and accepted formal notices for review within approximately four business days.

5. An uptick in the percentage of cases on which mitigation was imposed in 2022 and the non-notified team reviewed less cases than 2021.

  • CFIUS imposed mitigation measures as a condition to clearing the transaction in connection with 41 notices (23%) in 2022, compared to 10% in 2021.  Additionally, CFIUS imposed mitigation measures for three notices that were withdrawn or abandoned.
  • 214 mitigation agreements are currently under CFIUS monitoring.  16 mitigation agreements were terminated in 2022 and 22 were materially modified.
  • In 2022, 84 non-notified transactions[3] were considered by CFIUS, which is a significant decrease from the 135 non-notified transaction considered by CFIUS in 2021.  Of those 84, CFIUS requested a filing for only 11 of the transactions (13%), compared to 6% in 2021.  These statistics continue to confirm that being contacted by CFIUS in connection with a non-notified transaction does not automatically mean that CFIUS will request a filing.

6. Singaporean investors submitted the most CFIUS filings.

  • Unlike in 2021, where Chinese investors filed the most notices (44), Singaporean investors filed the most notices (37) in 2022, followed by Chinese and British investors (36 and 18 notices, respectively).[4] 
  • Overall, Singapore filed the most CFIUS filings in 2022 (46), with 37 notices and 9 declarations.

[1] Cleary’s summary of the CFIUS 2021 Annual Report can be found at: https://www.clearytradewatch.com/2022/08/cfius-2021-annual-report-five-key-takeaways/; see also https://home.treasury.gov/news/press-releases/jy1663.

[2] See https://home.treasury.gov/news/press-releases/jy0904

[3] Cleary previously wrote about the process behind non-notified transactions here.

[4] These figures represent total filing volume, which include transactions that are withdrawn and refiled, not distinct transactions.