Companies Facing Increased Scrutiny, Delays From CFIUS, Lawyers Say

The Committee on Foreign Investment in the U.S. is increasing scrutiny on transactions involving sensitive technologies, trade lawyers said. Companies are facing more CFIUS-related delays and a heavier involvement by political appointees as the Trump administration seeks to put more pressure on China, the lawyers said. Transactions by companies that operate in industries that don’t seem to affect national security are attracting CFIUS attention, said Dechert's Mark Thierfelder, on Friday's webinar hosted by the law firm. “Deals that we might have thought about as being simple from an approval process in prior years seem to be getting an increasingly harder look.” In areas that may be national security risks, companies should expect even more CFIUS scrutiny, especially with critical tech, said Neal Wolin, CEO of Brunswick Group and former CFIUS chair. This is partly due to the administration’s increased focus on tech competition with China and a heightened White House involvement in foreign direct investment matters, Wolin said. “The willingness of the White House to be engaged in and involved in these kinds of conversations … has increased,” he said. “There's a lot of focus and a lot of politics around these kinds of deals, so inevitably the work of the committee gets shaped by that broader political context.” The Treasury Department and the White House didn't comment Monday.