On August 13, 2018, President Trump signed into law legislation that will sharpen the rules governing U.S. national security reviews by the Committee on Foreign Investment in the United States (CFIUS). The final legislation will intensify scrutiny of foreign investments in U.S. critical infrastructure and critical technology companies and investments by Chinese companies, although some of the more draconian measures included in the original bill have been stripped. Most noticeable among the changes in the final legislation is a retreat from an attempt to extend CFIUS jurisdiction to outbound investments such as joint ventures located abroad. The legislation instead relies on U.S. export control laws to reach a variety of transactions that fall short of acquisitions or significant investments, in an attempt to limit the transfer of U.S. technology to certain foreign countries, especially China. In many ways, the final legislation gives CFIUS more authority to accomplish what it already has been doing—focusing on technology sectors, China, access to personal information, and investments in companies in proximity to sensitive U.S. Government facilities.

Special thanks to Lisa Raisner, Head of Government Relations, who co-authored this publication.