Tue 07/27/2021 13:08 PM
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Relevant Document:
Report

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Takeaways

  • The Treasury Department released the public, unclassified version of CFIUS’ annual report to Congress for 2020, which includes information on transactions that were reviewed subsequent to the full implementation of the Foreign Investment Risk Review Modernization Act of 2018, or FIRRMA.

  • The number of declarations of covered transactions increased from 94 in 2019 to 126 in 2020.

  • The number of covered transactions from China reviewed by the agency continued to drop in 2020. In 2018 CFIUS reviewed 55 transactions from China; in 2019 CFIUS reviewed 25, and in 2020 CFIUS reviewed 17 - only five of which involved critical technology.

  • CFIUS states that it reviewed 122 transactions involving critical technology. The top five nations from which the most covered transactions originated were Japan with 18, Sweden with 10, Canada with 10, Germany with nine and the United Kingdom with nine.


The Treasury Department released the public, unclassified version of the CFIUS annual report to Congress for 2020, which includes information on transactions that were reviewed subsequent to the full implementation of the Foreign Investment Risk Review Modernization Act of 2018, or FIRRMA.

FIRRMA modernized CFIUS' processes, including the introduction of the concept of a “declaration,” which is an abbreviated notification whereby CFIUS must respond within a 30-day period. This process is an alternative to the more traditional filing of a voluntary notice with the committee.

The number of declarations of covered transactions increased from 94 in 2019 to 126 in 2020.

The report states that during the 2020 reporting period, declarations involving “critical technologies” were made mandatory under FIRRMA. Additionally, CFIUS notes that after Feb. 13, 2020, transactions involving “critical technologies, covered investment critical infrastructure, or sensitive personal data” where a foreign government has a substantial interest were also to submit mandatory declarations to CFIUS.

Under FIRRMA, following a review of a declaration, CFIUS may request that the parties file a written notice, initiate a unilateral review, inform the parties that the committee was unable to complete a review on the basis of the declaration, or notify the parties that the committee has completed its review. CFIUS notified parties involved with 81 of the 126 declarations that the committee completed its review without further action. In 34 cases, based on stipulations provided by the parties, the related transaction was subject to mandatory filing requirements. In an additional 28 cases, after the initial 30-day review CFIUS requested the parties file a formal notice.

CFIUS states that Japan accounted for the largest number of declared transactions from 2018 to 2020 with 15.4% of the total, or 37 declarations. Canada and the United Kingdom accounted for 13.2% (34 declarations) and 10% (24 declarations), respectively. China accounted for five declarations in 2020, up from three in 2019 and zero in 2018.

In total, the agency reviewed 187 notices of covered transactions in 2020, which includes transactions that resulted in the filing of a notice under the FIRRMA program described above. In turn, CFIUS conducted a subsequent investigation of 88 notices. CFIUS adopted mitigation measures with respect to 23 notices. Former President Donald Trump issued one order prohibiting a transaction involving the acquisition of musical.ly by ByteDance Ltd. during the reporting period.

The number of covered transactions from China reviewed by the agency continued to drop in 2020. In 2018 CFIUS reviewed 55 transactions from China; in 2019 CFIUS reviewed 25, and in 2020 CFIUS reviewed 17 - only five of which involved critical technology.

CFIUS states that it reviewed 122 transactions involving critical technology. The top five nations from which the most covered transactions originated were Japan with 18, Sweden with 10, Canada with 10, Germany with nine and the United Kingdom with nine.
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