The Committee on Foreign Investment in the United States (CFIUS) Page: 12 of 38
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The Committee on Foreign Investment in the United States (CFIUS)
concerns privately with individual CFIUS members. Secondly, and perhaps more importantly, it
provides a process for firms to avoid risking potential negative publicity that could arise if a
transaction were to be blocked or otherwise labeled as impairing U.S. national security interests.
For some firms, public knowledge of a CFIUS investigation has had a negative effect on the
value of the firm's stock price.
For CFIUS members, the informal process has been beneficial because it has given them as much
time as they have felt was necessary to review a transaction without facing the time constraints
that arise under the formal CFIUS review process. This informal review likely has also given the
CFIUS members added time to negotiate with the firms involved in a transaction to restructure
the transaction in ways that have addressed any potential security concerns or to develop other
types of conditions that members feel are appropriate in order to remove security concerns.
Committee Membership
President Bush's January 23, 2008 Executive Order 13456 implementing P.L. 110-49 made
various changes to the law. The Committee consists of nine members, including the Secretaries of
State, the Treasury, Defense, Homeland Security, Commerce, and Energy; the Attorney General;
the United States Trade Representative; and the Director of the Office of Science and Technology
Policy.30 The Secretary of Labor and the Director of National Intelligence serve as ex officio
members of the Committee.3' The Executive Order added five executive office members to
CFIUS in order to "observe and, as appropriate, participate in and report to the President": the
Director of the Office of Management and Budget; the Chairman of the Council of Economic
Advisors; the Assistant to the President for National Security Affairs; the Assistant to the
President for Economic Policy; and the Assistant to the President for Homeland Security and
Counterterrorism. The President can also appoint members on a temporary basis to the
Committee as he determines.
Cases
In addition to the Dubai Ports cases, a number of investment transactions have attracted public
and congressional attention. After a lengthy review by CFIUS in 2000, Verio, Inc., a U.S. firm
that operates websites for businesses and provides internet services, was acquired by NTT
Communications of Japan. Verio's stock price reportedly fell during the CFIUS investigation as a
result of uncertainty in the market about prospects for the transaction. The CFIUS review was
instigated by the FBI, which had expressed concerns during the initial review stage that the
majority interest of the Japanese government in NTT could give it access to information
30 The United States Trade Representative and the Director of the Office of Science and Technology Policy were added
through E.O. 13456, issued January 23, 2008.
31 Executive Order 11858 of May 7, 1975, 40 F.R. 20263 established the Committee with six members: the Secretaries
of State, the Treasury, Defense, Commerce, and the Assistant to the President for Economic Affairs, and the Executive
Director of the Council on International Economic Policy. Executive Order 12188, January 2, 1980, 45 F.R. 969, added
the United States Trade Representative and substituted the Chairman of the Council of Economic Advisors for the
Executive Director of the Council on International Economic Policy. Executive Order 12661, December 27, 1988, 54
F.R. 779, added the Attorney General and the Director of the Office of Management and Budget. Executive Order
12860, September 3, 1993, 58 F.R. 47201, added the Director of the Office of Science and Technology Policy, the
Assistant to the President for National Security Affairs, and the Assistant to the President for Economic Policy.
Executive Order 13286, Section 57, February 28, 2003, added the Secretary of Homeland Security. P.L. 110-49
reduced the membership of CFIUS to six Cabinet members and the Attorney General, it added the Secretary of Labor
and the Director of National Security as ex officio members, and removed seven White House appointees.Congressional Research Service
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Jackson, James K. The Committee on Foreign Investment in the United States (CFIUS), report, August 12, 2016; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc1020755/m1/12/: accessed April 23, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.