What is CFIUS?
The Committee on Foreign Investment in the US reports directly to the President on transactions where a foreign party is planning to acquire a US business in a way that could have national security implications.
It is chaired by the Secretary of the Treasury, and the other members are all from elsewhere in the administration: the Secretaries of State, Defense, Homeland Security and Commerce; the Attorney General; the Directors of the Offices of Management and Budget as well as Science and Technology Policy; the U.S. Trade Representative; the Assistants to the President for National Security Affairs and Economic Policy; and the Chairman of the Council of Economic Advisers.
Companies that are planning to enter those sorts of transactions (such as AMD) voluntarily file notice so that their plans, if approved, get a ‘safe harbour’, meaning that they won’t be told to change or unwind the transaction after the fact.
The Committee has 30 days to decide if they want to perform an extended investigation or approve the transaction. The extended investigation takes 45 days, followed by a recommendation to the President, who can block the deal under Section 721 of the Defense Production Act of 1950 (Exon-Florio). In reality, very few deals are investigated and even fewer are blocked. If CFIUS wants more than 30 days they will ask the Company to re-file instead of starting the extended review. And if a deal probably won’t make it through, the filer usually just gives up.
That informal relationship with filers; the fact that the process is highly confidential because of competition and national security requirements; high profile deals that drew a lot of public scrutiny; along with the whole operation taking place within the administration, have done little to improve public confidence in CFIUS.