CONGRESSIONAL RESEARCH SERVICE — The Committee on Foreign Investment in the United States (CFIUS)
James K. Jackson, Specialist in International Trade and Finance
October 11, 2017. Congressional Research Service 7-5700
(54 pages, pdf file) [1]


SUMMARY: The Committee on Foreign Investment in the United States (CFIUS) is an interagency body comprised of nine Cabinet members, two ex officio members, and other members as appointed by the President, that assists the President in overseeing the national security aspects of foreign direct investment in the U.S. economy. While the group often operated in relative obscurity, the perceived change in the nation’s national security and economic concerns following the September 11, 2001, terrorist attacks and the proposed acquisition of commercial operations at six U.S. ports by Dubai Ports World in 2006 placed CFIUS’s review procedures under intense scrutiny by Members of Congress and the public. Prompted by this case, some Members of Congress questioned the ability of Congress to exercise its oversight responsibilities given the general view that CFIUS’s operations lacked transparency. The current CFIUS process reflects changes Congress initiated in the first session of the 110th Congress, when the House and Senate adopted S. 1610, the Foreign Investment and National Security Act of 2007 (FINSA). In the 115th Congress, legislation has been introduced to include the Secretaries of Agriculture and Health and Human Services as permanent members of CFIUS and for other purposes.
Generally, efforts to amend CFIUS have been spurred by a specific foreign investment transaction that raised national security concerns. Despite various changes to the CFIUS statute, some Members and others are questioning the nature and scope of CFIUS’s reviews. The CFIUS process is governed by statute that sets a legal standard for the President to suspend or block a transaction if no other laws apply and if there is “credible evidence” that the transaction threatens to impair the national security, which is interpreted as transactions that pose a national security

Operated under Chair of the Treasury Department – 9 main federal agency secretaries, and other sub groups are identified – but names not available. It was composed of the following:

  • Secretary of the Treasury as the chairman
  • Secretary of State
  • Secretary of Defense
  • Secretary of Commerce
  • Assistant to the President for Economic Affairs [removed 2007]
  • Executive Director of the Council on International Economic Policy [removed 2007]
  • United States Trade Representative (added 1980) [removed 2007] (added back 2008)
  • Attorney General (added 1988)
  • Director of the Office of Management and Budget (added 1988) [removed 2007]
  • Director of the Office of Science and Technology Policy (added 1993) [removed 2007] (added back 2008)
  • National Security Advisor (added 1993) [removed 2007]
  • Assistant to the President for Economic Policy  (added 1993) [removed 2007]
  • Secretary of Homeland Security (added 2003)
  • Secretary of Labor (added 2007)
  • Director of National Intelligence (added 2007)

CFIUS does not have a federal logo or image.

In 1975, President Ford created the Committee by Executive Order 11858.  The Executive Order stipulated that the Committee would have “primary continuing responsibility within the Executive Branch for monitoring the impact of foreign investment in the United States, both direct and portfolio, and for coordinating the implementation of United States policy on such investment.”

In particular, CFIUS was directed to:

  • arrange for the preparation of analyses of trends and significant developments in foreign investments in the United States
  • provide guidance on arrangements with foreign governments for advance consultations on prospective major foreign governmental investments in the United States
  • review investments in the United States which, in the judgment of the Committee, might have major implications for United States national interests
  • consider proposals for new legislation or regulations relating to foreign investment as may appear necessary

In 1980, President Jimmy Carter added the United States Trade Representative and substituted the Chairman of the Council of Economic Advisers for the Executive Director of the Council on International Economic Policy by Executive Order 12188.

In 1988, the Exon–Florio Amendment was the result of national security concerns in Congress caused by the proposed purchase of Fairchild Semiconductor by Fujitsu.  The Exon-Florio Amendment granted the President the authority to block proposed mergers, acquisitions, and takeovers that threaten national security.  In 1988, President Ronald Reagan added the Attorney General and the Director of the Office of Management and Budget by Executive Order 12661.

In 1992, the Byrd Amendment required CFIUS to investigate proposed mergers, acquisitions, and takeovers where the acquirer is acting on behalf of a foreign government and affects national security.

In 1993, President Bill Clinton added the Director of the Office of Science and Technology Policy, the National Security Advisor, and the Assistant to the President for Economic Policy by Executive Order 12860.

In 2003, President George W. Bush added the Secretary of Homeland Security by Executive Order 13286.

In 2007, The Foreign Investment and National Security Act (FINSA) established the Committee by statutory authority, reduced membership to 6 cabinet members and the Attorney General, added the Secretary of Labor and the Director of National Intelligence, and removed 7 White House appointees.

In 2008, President Bush added the United States Trade Representative and the Director of the Office of Science and Technology Policy by Executive Order 13456 implementing the law. FINSA requires the President to conduct a national security investigation of certain proposed investment transactions, provides a broader oversight role for Congress, and keeps the President as the only officer with the authority to suspend or prohibit mergers, acquisitions, and takeovers. [2]

FINSA – Foreign Investment and National Security Act of 2007

Foreign Investment and National Security Act of 2007 (Pub.L. 110–49, 121 Stat. 246, enacted July 26, 2007) is an Act of the United States Congress.

The Act addresses investments made by foreign entities in the United States. The law strengthens pre-existing laws including the Exon-Florio Amendment and the Committee on Foreign Investment in the United States.

Legislative history

  • On February 28, 2007, the United States House of Representatives passed the bill by a vote of 423 to 0.
  • On June 29, 2007, the United States Senate passed their version of the bill  by unanimous consent.
  • On July 11, 2007, the House passed the Senate’s version, S. 1610 by a vote 370-45.

The bill establishes a framework for the review of foreign acquisitions of US assets by the Committee on Foreign Investment in the United States (CFIUS). CFIUS reform has been in the works since the Dubai Ports World transaction passed through CFIUS without a formal investigation, leaving a surprised and angry Congress determined to avoid a repetition of that scenario. Impetus for reform first began, however, when the China National Offshore Oil Corporation publicly announced an interest in UNOCAL in 2005, and even earlier that same year, when a GAO report revealed the lack of Congressional oversight and the degree to which some CFIUS transactions were escaping formal investigation through withdrawal of applications, among other things. [3]


United Defense
United Defense Industries was a United States defense contractor which is now part of BAE Systems Land and Armaments. This company produced combat vehicles, artillery, naval guns, missile launchers and precision munitions.  BAE Systems’ bid was referred to the Committee on Foreign Investment in the United States (CFIUS) to ensure there were no national security implications of the sale. The CFIUS granted approval of the deal in April 2005. BAE completed its acquisition of United Defense on June 24, 2005 and announced plans to merge the company with its existing land systems businesses to form BAE Systems Land and Armaments.
5 KB (449 words) – 07:37, 26 December 2015

Uranium One
Uranium One is a Canadian uranium mining company with headquarters in Toronto, Ontario. It has operations in Australia, Canada, Kazakhstan, South Africa and the United States.

In January 2013, Rosatom, the Russian state-owned uranium monopoly, through its subsidiary ARMZ Uranium Holding, purchased the company at a value of $1.3 billion. The purchase of the company by Russian interests is, as of October 2017, under investigation by the United States House Permanent Select Committee on Intelligence.

  • On July 5, 2005, Southern Cross Resources Inc. and Aflease Gold and Uranium Resources Ltd announced that they would be merging under the name SXR Uranium One Inc.
  • In 2007 Uranium One acquired a controlling interest in UrAsia Energy, a Canadian firm with headquarters in Vancouver from Frank Giustra. UrAsia has interests in rich uranium operations in Kazakhstan, and UrAsia Energy’s acquisition of its Kazakhstan uranium interests from Kazatomprom followed a trip to Almaty in 2005 by Giustra and former U.S. President Bill Clinton where they met with Nursultan Nazarbayev, the leader of Kazakhstan. Substantial contributions to the Clinton Foundation by Giustra followed, with Clinton, Giustra, and Mexican telecommunications billionaire Carlos Slim in 2007 establishing the Clinton Foundation’s Clinton Giustra Sustainable Growth Initiative to combat poverty in the developing world. In addition to his initial contribution of $100 million Giustra pledged to contribute half of his future earnings from mining to the initiative.
  • In June 2009, the Russian uranium mining company ARMZ Uranium Holding Co. (ARMZ), a part of Rosatom, acquired 16.6% of shares in Uranium One in exchange for a 50% interest in the Karatau uranium mining project, a joint venture with Kazatomprom.
  • In June 2010, Uranium One acquired 50% and 49% respective interests in southern Kazakhstan-based Akbastau and Zarechnoye uranium mines from ARMZ. In exchange, ARMZ increased its stake in Uranium One to 51%. The acquisition resulted in a 60% annual production increase at Uranium One, from approximately 10 million to 16 million lb. The deal was subject to anti-trust and other conditions and was not finalized until the companies received Kazakh regulatory approvals, approval under Canadian investment law, clearance by the US Committee on Foreign Investments, and approvals from both the Toronto and Johannesburg stock exchanges. The deal was finalized by the end of 2010. Uranium One’s extraction rights in the U.S. amounted to 0.2% of the world’s uranium production. Uranium One paid its minority shareholders a dividend of 1.06 US Dollars per share at the end of 2010.
  • In January 2013, ARMZ took complete control of Uranium One by buying all shares it did not already own.
  • In October 2013, Uranium One Inc. became a private company and a wholly owned indirect subsidiary of Rosatom.  From 2012 to 2014, an unspecified amount of Uranium was reportedly exported to Canada via a Kentucky-based trucking firm with an existing export license; most of the processed uranium was returned to the U.S., with approximately 25% going to Western Europe and Japan.

Congressional investigation:  Since uranium is considered a strategic asset with national security implications, the acquisition of Uranium One by Rosatom was reviewed by the Committee on Foreign Investment in the United States (CFIUS), a committee of nine government agencies including the United States Department of State, which was then headed by Hillary Clinton.  The voting members of the committee can object to such a foreign transaction, but the final decision then rests with the president.
18 KB (1,724 words) – 16:11, 28 December 2017

Exon–Florio Amendment
The Exon–Florio Amendment 50 U.S.C. app 2170 is a law that was enacted by the United States Congress in 1988 to review foreign investment within the United States. (It was later Amended in coordination of the SAFE Port Act of 2006.) The amendment was passed into law under the Omnibus Trade and Competitiveness Act of 1988 and amended Section 721 of Defense Production Act of 1950. All foreign investments that might affect national security may be reviewed and if deemed to pose a threat to security, the President of the United States may block the investment. According to the amendment, the president may block the investment when “there is credible evidence that leads the President to believe that the foreign interest exercising control might take action that threatens to impair the national security.” President Reagan delegated the review process to the Committee on Foreign Investment in the United States.
The amendment was sponsored by Senator J. James Exon and Representative James J. Florio. The amendment was proposed over concerns of foreign acquisitions by Japanese businesses.
3 KB (303 words) – 10:04, 27 June 2017

Lumileds is a lighting company globally developing, manufacturing, and distributing LEDs, light bulbs, and related products for automotive lighting, general lighting, and specialty lighting. Lumileds operates as a private company, having funds affiliated with Apollo Global Management.

  • In November 1999, Lumileds was formed  as a joint venture between Philips Lighting and Agilent Technologies.
  • In 2005, upon Philips’ acquisition, Lumileds became a business unit within Philips Lighting and became known as Philips Lumileds Lighting Company.
  • In March 2015, Lumileds parent company Philips agreed to sell an 80.1 percent stake in the business to the investment fund, Go Scale.
  • In October 2015, Financial Times reported that the Committee on Foreign Investment in the United States (CFIUS) regulatory body may block the $2.9B deal owing to fears of Chinese subversion of the US high-tech sector.
  • In January 2016, the deal was cancelled , due to the CFIUS concerns based on transfer of gallium nitride semiconductor technology, which is used in LEDs as well as defense applications.
  • In December 2016, Philips announced that it has signed an agreement to sell an 80.1% interest in Lumileds to certain funds managed by affiliates of Apollo Global Management. Philips retains the remaining 19.9% interest in Lumileds.
  • In July 2017, the transaction was completed, under customary closing conditions, including the relevant regulatory approvals

3 KB (339 words) – 18:16, 27 October 2017

Sovereign wealth fund
A sovereign wealth fund (SWF) is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such as private equity fund or hedge funds. Sovereign wealth funds invest globally. Most SWFs are funded by revenues from commodity exports or from foreign-exchange reserves held by the central bank. By historic convention, the United States’ Social Security Trust Fund, with $2.8 trillion of assets in 2014, and similar vehicles like Japan Post Bank’s 200 trillion yen of holdings, are not considered sovereign wealth funds.

Some sovereign wealth funds may be held by a central bank, which accumulates the funds in the course of its management of a nation’s banking system; this type of fund is usually of major economic and fiscal importance. Other sovereign wealth funds are simply the state savings that are invested by various entities for the purposes of investment return, and that may not have a significant role in fiscal management.

Former U.S. Secretary of the Treasury Lawrence Summers has argued that the U.S. could potentially lose control of assets to wealthier foreign funds whose emergence “shake[s] [the] capitalist logic” These concerns have led the European Union (EU) to reconsider whether to allow its members to use “golden shares” to block certain foreign acquisitions. This strategy has largely been excluded as a viable option by the EU, for fear it would give rise to a resurgence in international protectionism. In the United States, these concerns are addressed by the Exon–Florio Amendment to the Omnibus Trade and Competitiveness Act of 1988, Pub. L. No. 100-418, § 5021, 102 Stat. 1107, 1426 (codified as amended at 50 U.S.C. app. § 2170 (2000)), as administered by the Committee on Foreign Investment in the United States (CFIUS).

Their inadequate transparency is a concern for investors and regulators: for example, size and source of funds, investment goals, internal checks and balances, disclosure of relationships, and holdings in private equity funds.
SWFs are not nearly as homogeneous as central banks or public pension funds.
35 KB (2,772 words) – 08:54, 25 December 2017

Dubai Ports World controversy
The Dubai Ports World controversy began in February 2006 and rose to prominence as a national security debate in the United States. At issue was the sale of port management businesses in six major U.S. seaports to a company based in the United Arab Emirates (UAE), and whether such a sale would compromise port security.
The controversy pertained to management contracts of six major United States ports. The purchaser was DP World (DPW), a state-owned company in the UAE. The contracts had already been foreign-owned, by Peninsular and Oriental Steam Navigation Company (P&O), a British firm taken over by DPW (completed in March 2006). Although the sale was approved by the executive branch of the United States Government, various United States political figures argued that the takeover would compromise U.S. port security.
U.S. President George Bush argued vigorously for the approval of the deal, claiming that the delay sends the wrong message to U.S. allies. Legislation was introduced to the United States Congress to delay the sale.

DP World is a company owned by the government of Dubai in the United Arab Emirates, via a holding company. This holding company is under the direct control of the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, who is also the prime minister of the UAE.

  • In mid-October 2005, DP World approached the Committee on Foreign Investment in the United States (CFIUS) to clear regulatory hurdles for a possible acquisition of the British firm P&O. The CFIUS is the multi-agency federal panel that passes judgment on deals with foreign corporations that raise antitrust or national security questions, Soon after, DPW began negotiating the terms of the takeover with P&O. They were advised by former President Bill Clinton to submit to a 45-day review of the acquisition.
  • In December 2005, Coast Guard intelligence officials raised the possibility of significant security risks associated with the management of some U.S. port operations by a Dubai company, stating in a report that broad intelligence gaps prevented them from assessing the risks.
  • In February 2006, the stockholders of the Peninsular and Oriental Steam Navigation Company (P&O), a British firm, agreed to a sale of that company to DPW over a bid by PSA International of Singapore. As part of the sale, DPW would assume the leases of P&O to manage major U.S. facilities at the Port of New York and New Jersey, Port of Philadelphia, Port of Baltimore, Port of New Orleans, and the Port of Miami, as well as operations in 16 other ports.
    After P&O stockholders approved the deal, the arrangement was reviewed by the CFIUS headed by the U.S. Treasury Department. The transfer of leases was approved.
    When the deal appeared in the business press, it was noticed by Eller & Company, a Florida firm. Eller has two joint ventures with P&O and it feared becoming an “involuntary partner of DP World”, said Michael Kreitzer, Eller’s lawyer.  According to Kreitzer, Eller hired semi-retired lobbyist Joe Muldoon as a last-ditch effort to persuade Congress to block the deal. Soon Muldoon and Kreitzer got the attention of Democratic New York Senator Charles E. Schumer and an Associated Press reporter. Within days, Schumer held a press conference calling for a review and the AP ran the story nationally.
    Congressional politicians were quick to respond after Schumer’s press conference and the AP story put the Dubai Ports deal in the national spotlight. Both Democratic and Republican members of Congress started to question the approval. Republican leaders Dennis Hastert and Bill Frist, who usually work closely with the office of the President, publicly questioned the deal. Frist said “If the administration cannot delay the process, I plan on introducing legislation to ensure that the deal is placed on hold until this decision gets a more thorough review.”
  • On February 22, 2006, President Bush threatened to veto any legislation passed by Congress to block the deal, a veto that would be his first. In a statement to reporters, Bush claimed, “It would send a terrible signal to friends and allies not to let this transaction go through.” DP Worlds Chief Operating Officer, Ted Bilkey engaged a number of high-profile lobbying firms to garner congressional support for the deal.
    The controversy created a public and unusually high-profile dispute within the Republican Party, and between the Republican-controlled Congress and the Republican-controlled White House.
  • On February 23, 2006, DPW volunteered to postpone its takeover of significant operations at the ports to give the White House more time to convince lawmakers that the deal poses no increased risks from terrorism.
  • On February 24, 2006, it was reported that there are 22 U.S. ports in the deal, not just the six major ports mentioned in initial news stories and reports. According to the website of P&O Ports, the port-operations subsidiary of P&O, DPW would take over stevedore services at 12 East Coast ports including the Port of Portland (Maine); Port of Boston; Port of Davisville; New York City; Port Newark; Port of Philadelphia; Port of Camden; Port of Wilmington; Port of Baltimore; and Virginia locations at Newport News, Norfolk, and Portsmouth.
    Additionally, DPW would have taken over P&O stevedoring operations at nine ports along the Gulf of Mexico including the Texas ports of Beaumont, Port Arthur, Galveston, Houston, Freeport, and Corpus Christi, plus the Louisiana ports of Lake Charles and New Orleans.
    Former Senate Majority Leader and 1996 Republican presidential candidate Bob Dole was hired by Dubai Ports World to lobby Congress on its behalf against bipartisan criticism of the deal. Mr. Dole was a special counsel in the Washington office of the law firm of Alston & Bird. DP World hired the firm in 2005 to help shepherd its purchase of the British-based firm P&O.
  • On March 8, 2006 the House Panel voted 62–2 to block the deal, and senator Charles Schumer added amendments to a senate bill to block the deal, causing an uproar in the senate.
  • On March 9, 2006, Dubai Ports World released a statement saying they would turn over operation of U.S. ports to a U.S. “Entity”. Later that same day, American Enterprise Institute scholar Norm Ornstein reported on PBS’s “News Hour” that DP World was considering selling its U.S. operations to Halliburton.
  • In fall of 2016, Dubai Ports World eventually sold P&O’s American operations to American International Group’s asset management division, Global Investment Group for an undisclosed sum. The company is now known as Ports America. In New Jersey it operates as Port Newark Container Terminal (PNCT). Highstar Capital is shopping the company.
  • In 2017, a Turkish company seeks to buy Ports America, bringing us full circle to 2006.

24 KB (2,868 words) – 04:23, 30 August 2017

Bush, Congress In Dark About Port Deal“. CBS News. 2006-02-22. Archived from the original on 2006-03-10.
http ://cbs4denver .com/national/topstories_story_053102937.html

In another case of President Bush being caught off base again, spokesman Scott McClellan acknowledged on Wednesday, the president did not know about the sale of U.S. ports until after his administration had already approved it.
MCClellan said, “The president learned of this recently, he became aware of it.  And there was no objection raised by any of the departments during the review process or any concerns expressed about potential national security threats.”
He referred to the group of senior government and White House officials who examined these transactions and are known as the Committee on Foreign Investment in the United States.  The committee is chaired by Treasury Department Secretary John Snow and includes officials from the departments of defense, justice, commerce, state and homeland security.
After the president was briefed on what his administration had already decided, and in the wake of objections by Congress, the president, according to McClellan, spoke with the cabinet secretary of every government agency involved and asked “ Are you comfortable with this transaction going forward?  And each and every one expressed that they were comfortable with this transaction going forward.”
Congress is also hearing from some high profile lobbyists, including Bob Dole.  NBC News has confirmed the former Senate majority leader and Republican presidential candidate has been retained by Dubai Ports World to help push for their transaction.
Meanwhile, if D.P. World needs any strategic advice, the company has an existing consultant arrangement with Madeleine Albright, the former Clinton secretary of state.


CFIUS, “Covered Transactions, Withdrawals, and Presidential Decisions 2006-2008”, Accessed March 27, 2009.  (PDF is unavailable at the referenced link.)

CFIUS, “Covered Transactions, Withdrawals, and Presidential Decisions 2008-2010”, Accessed August 25, 2011. (PDF is available at this referenced link.)


U.S. Department of the Treasury – CFIUS at a Glance
By: Holly Shulman  2/19/2013 [5]

HOW does CFIUS work?

In its national security reviews, CFIUS considers the particular facts and circumstances of each transaction to identify and address the potential national security effects of the transaction. The Committee applies the same rules to each transaction, regardless of the nationality of the investor or the economic sector of the investment.
The CFIUS process contains the following key steps:

  • Filing: When a foreign company is acquiring a U.S. company, the companies may voluntarily file with CFIUS to have the transaction reviewed. The Committee also has the authority to initiate a review of a transaction, whether proposed or completed, that it believes may raise national security concerns.
  • 30-Day Review: CFIUS’s initial review of the transaction lasts for up to 30 days. During this period, Committee members review the transaction and may contact the companies for further information.  CFIUS also considers information provided by the intelligence community. Most transactions complete the CFIUS process within this initial 30-day review period, without any change or condition.
  • 45-Day Investigation: If at the end of the 30-day review the Committee requires more time to gather additional information or analyze complex issues, it begins an investigation which may last up to 45 additional days, to complete its national security assessment and make a final decision.  CFIUS members may also discuss steps that the companies may take to mitigate any national security concerns arising from the transaction. The Committee may require that the parties to a transaction implement specified mitigation.
  • Presidential Review: In rare instances, such as when CFIUS has determined that there are national security concerns that cannot be resolved by mitigation, CFIUS may recommend to the President that a transaction be prohibited.  Only the President has the authority to suspend or prohibit a transaction. When CFIUS refers a transaction to the President, the President must make a determination within 15 days.


The members of CFIUS include the heads of the following departments and offices:

Department of the Treasury (chair)
Department of Justice
Department of Homeland Security
Department of Commerce
Department of Defense
Department of State
Department of Energy
Office of the U.S. Trade Representative
Office of Science & Technology Policy



Secretary of the Treasury of the United States (Chair)

Incumbent – Steven Mnuchin, since February 13, 2017







Department of Justice – Attorney General of the United States

Incumbent – Jeff Sessions, since February 9, 2017







Secretary of Homeland Security of the United States

Incumbent – Kirstjen Nielsen, since December 6, 2017





Secretary of Commerce of the United States

Incumbent – Wilbur L. Ross, since February 28, 2017





Secretary of Defense of the United States

Incumbent – Jim Mattis, since January 20, 2017







Secretary of State of the United States

Incumbent – Rex Tillerson, since February 1, 2017







Secretary of Energy of the United States

Incumbent – Rick Perry, since March 2, 2017







United States Trade Representative

Incumbent – Robert Lighthizer, since May 15, 2017







Director of the Office of Science and Technology Policy





The following offices also observe and, as appropriate, participate in CFIUS’s activities:

  • Office of Management & Budget
  • Council of Economic Advisors
  • National Security Council
  • National Economic Council
  • Homeland Security Council

The Director of National Intelligence and the Secretary of Labor are non-voting, ex-officio members of CFIUS with roles as defined by statute and regulation.


Assistant Secretary of the Treasury for International Markets and Development

Incumbent – Heath Tarbert, Confirmed by Senate September 27, 2017, Assumed office October 2017

NOTE: This position is also EDS01 with the WORLD BANK


Featured Image: Credit


[1]  CRS

[2]  CFIUS

[3]  FINSA

[4]  CFIUS Investigations

[5]  Dept of Treasury

EDITOR NOTEFollow-up article to cover Council on Foreign Relations, World Bank and FIRMMA legislation ties to CFIUS.