- Stewart A. Baker
+1 202 429 6402
- Stephen Heifetz
+1 202 429 6227
CFIUS Foreign Investment Reviews & FOCI Migration
The Committee on Foreign Investment in the United States (CFIUS) is a US government multi-agency committee that conducts national security reviews of in-bound foreign investments. The Committee effectively can block investments and force divestments if the Committee did not clear a transaction before deal closing. More often, when the Committee finds national security risks, CFIUS requires a “risk mitigation agreement” to allow the deal to proceed.
While transactions involving countries such as China and Russia sometimes are perceived to cause particular CFIUS scrutiny, transactions involving companies from many other countries, including close European allies, often generate challenging cases.
When the investment target has government contracts involving classified information, the Defense Security Service (DSS, a part of the Department of Defense) conducts a separate, parallel process to mitigate “Foreign Ownership Control or Influence” (FOCI).
Steptoe’s CFIUS/FOCI practice is led by two former government officials who were personally involved in these processes on behalf of the government. Stewart Baker served as the first Assistant Secretary for Policy at the Department of Homeland Security; Stephen Heifetz served as the Deputy Assistant Secretary and Acting Assistant Secretary for the Office of Policy Development at the Department of Homeland Security. Both served on CFIUS, where they reviewed hundreds of CFIUS cases, negotiated dozens of risk mitigation agreements, and interacted frequently with DSS officials regarding FOCI requirements.
In many of the most high-profile matters, Steptoe has helped non-US and US clients obtain government clearances. Steptoe helps clients determine whether a formal “notice” to CFIUS and/or DSS is warranted, interpret and apply CFIUS and FOCI regulations, compile the CFIUS notice and/or FOCI materials, interface with CFIUS and DSS, negotiate CFIUS and/or FOCI mitigation agreements, and otherwise advise clients about CFIUS, FOCI, and related matters.
In many instances, deal counsel at other law firms have called on Steptoe’s specialized CFIUS/FOCI practice to help clients understand and address the uniquely challenging government review processes.
The CFIUS and FOCI processes are highly confidential, and the government does not disclose even the fact that companies are subject to review. Publicly available information therefore is limited. But companies themselves sometimes disclose information about their interaction with the CFIUS and FOCI processes, and Steptoe lawyers have been involved in many seminal cases, including the following half dozen illustrative matters:
- Obtained CFIUS and DSS/FOCI clearance for acquisition by non-US company of a leading cyber security business
- Obtained CFIUS clearance for Lenovo, a multinational computer and personal technology company, with regard to its $2.9 billion acquisition of Motorola Mobility, a mobile telecommunications device company
- Represented Ralls Corporation before CFIUS; Ralls had acquired windfarm projects and our representation began when CFIUS requested Ralls submit to a CFIUS review, a review the US Court of Appeals subsequently found violated Ralls’ constitutional rights
- Advised Indian company regarding the FOCI aspects of its entrance into the US aerospace and defense market
- Advised US information technology company with classified contracts regarding CFIUS and DSS/FOCI processes entailed in transaction with European company
- Led US government executive branch efforts in the attempted Dubai Ports World-P&O transaction and the legislative and regulatory aftermath, a highly politicized CFIUS case that gave rise to the current CFIUS statute and regulations
Select News & Events
- Michael Vatis Appears on FOX Business to Discuss Cybersecurity
- Financial Times Quotes Stephen Heifetz on CFIUS Approval of Smithfield Deal
- The Asian Lawyer Quotes Stephen Heifetz on CFIUS and Chinese Investment
- Steptoe Receives 25 Practice, 32 Individual Mentions in Chambers Global 2013
- CFIUS Reviews, Canadian Bar Association
- Private National Security Law Practice: Committee on Foreign Investment in the United States (CFIUS), Georgetown University Law Center’s National Security Law Society
- US-China Roundtable Workshop on IT Product Security Assurance, United States Information Technology Office
- Chinese Investment and US National Security Reviews, PLI Webcast