On April 11, the U.S. Department of the Treasury (“Treasury”), as Chair of the Committee on Foreign Investment in the United States (“CFIUS”), issued a Notice of Proposed Rulemaking (the “Proposed Rule”) that would modify and expand CFIUS’s mitigation and enforcement authority. Continue Reading Treasury Issues Proposed Rule to Enhance CFIUS Mitigation and Enforcement

On February 1, the United States Court of Appeals for the Eleventh Circuit unanimously granted a preliminary injunction in Shen v. Simpson, enjoining enforcement of a Florida law regulating foreign ownership of U.S. land.  That law prohibits citizens of the People’s Republic of China who are not lawful permanent residents of the United States from purchasing certain real property in Florida.  The Eleventh Circuit’s ruling enjoined enforcement of the law against two individual plaintiffs, and the court held that those plaintiffs had shown a “substantial likelihood of success” on their claim that the Florida law was preempted by the Foreign Risk Review Modernization Act of 2018 (“FIRRMA”), the most recent federal statute expanding the authority of the Committee on Foreign Investment in the United States (“CFIUS”), including with respect to certain real estate transactions.  In concurrence with the majority, Judge Abudu wrote that the plaintiffs also showed a substantial likelihood of success on their argument that Florida’s law violates the Equal Protection Clause of the Fourteenth Amendment to the U.S. Constitution.Continue Reading U.S. Circuit Court Finds that Florida Law Prohibiting Foreign Ownership of U.S. Land Likely Preempted by CFIUS Statute

On October 20, 2022, the U.S. Department of the Treasury released its first-ever Committee on Foreign Investment in the United States (CFIUS) Enforcement and Penalty Guidelines (the Guidelines).[1]  The Guidelines provide background and context regarding (1) the types of conduct that can result in CFIUS-related violations, (2) how CFIUS gathers information regarding potential CFIUS-related violations, and (3) the enforcement process CFIUS follows with respect to CFIUS-related violations, including the factors that CFIUS considers in determining whether a penalty is warranted and the calculation of any such penalty.
Continue Reading U.S. Treasury Department Issues First-Ever Guidance on CFIUS Enforcement and Penalty Practices

On September 15, 2022, President Biden issued an Executive Order that provides direction to the Committee on Foreign Investment in the United States (“CFIUS”) regarding some of the factors it should consider when evaluating the national security risks posed by transactions within the jurisdiction of CFIUS.[1]  Although, in many ways, the Executive Order simply codifies the priorities and areas of interest on which people familiar with CFIUS understand CFIUS is focused, the Executive Order puts market participants on clear notice that CFIUS will scrutinize transactions that implicate such priorities and areas of interest.
Continue Reading President Biden Issues CFIUS-Related Executive Order Regarding Evolving National Security Landscape