What is CFIUS & Why Should I Care?
CFIUS, or the Committee on Foreign Investment in the United States, is an interagency committee authorized to review transactions involving foreign investments to determine their impact on national security and to evaluate whether they present an undue risk to American interests.
On Sept. 15, 2022, President Biden signed an Executive Order (E.O.) that provides direction on the desired scope of CFIUS review, in recognition of the nation’s evolving supply chain and technological developments and the importance of responding to emerging risks. The E.O. aims to strengthen U.S. industrial and supply chain resilience in the face of foreign investments which may undermine U.S. national security. Exiger is well positioned to support both government and industry clients as they navigate the impacts of the first-ever presidential directive defining additional national security factors for CFIUS to consider when evaluating transactions.
The E.O. provides USG agencies with clear guidance on how to review transactions and enumerate current-day risk factors in areas where America’s national security and critical infrastructure resilience could be exposed from foreign investment.
National Security Risk Factors
The E.O. directs CFIUS to consider five sets of national security factors for strengthening its foreign investment screening process:
- How a foreign transaction could affect critical U.S. supply chain resilience and security
- The impact on U.S. technological leadership in areas affecting U.S. national security
- Potential consequences of industry investment trends in key sectors
- Cybersecurity risks that could undermine national security
- Risks to sensitive personal data
Critical technology sectors emphasized in the E.O. include microelectronics, quantum computing, artificial intelligence, biotechnology, climate adaptation technologies, critical materials, and other rapidly growing industries.
How Exiger Can Help Identify Foreign Investment Risks
Our award-winning technology platform, DDIQ, is designed to surface risks related to foreign ownership and control, data breaches, and reputational issues to help both government agencies and industry evaluate risk factors related to a transaction. The platform identifies recent mergers and acquisitions and flags companies that operate with critical technology. It is an invaluable tool for agencies evaluating and monitoring transactions, and for law firms and corporations navigating the CFIUS review process.
|5 Factors CFIUS E.O. Focuses On||Applying Exiger’s Analytical Tools|
|Impact on Resilience 7 Security to Supply Chains||Supply Chain Explorer illuminates supply chains to the Nth tier and identifies concentration risk of key suppliers|
|Technical Leadership on Emerging Technologies||DDIQ identifies risk factors associated with key players in emerging critical technology markets|
|Cumulative Foreign Investment in Priority Industries||Our reach across commercial markets provides visibility when investment trends pose risk to key sectors|
|Cybersecurity Risks||Supply Chain Explorer identifies cyber risk factors such as historical data breaches, sub-tier suppliers, and exposure to threats|
|Risks to U.S. Persons Data||DDIQ surfaces data security risks of potentially covered entities and can identify key concentrations of data|
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