U.S. Department of the Treasury

Yes.  CFIUS retains the authority to review a transaction that could result in foreign control of any U.S. business, regardless of whether the foreign person is an “excepted investor.”  However, transactions involving excepted investors may be exempt from mandatory filing requirements under 31 C.F.R. § 800.401.

Not necessarily.  The regulations identify criteria that a foreign person must meet in order to qualify as an “excepted investor” or “excepted real estate investor” regarding, for example, its principal place of business, place of incorporation, and ownership.  The regulations also identify criteria that would preclude a foreign person from qualifying as an excepted investor, such as non-compliance with the law.

A list of factors posted here outlines what the Committee will consider when making a determination regarding an eligible foreign state’s national security-based foreign investment review processes and bilateral cooperation with the United States on national security-based investment reviews.

As detailed in the regulations, from February 13, 2020 to February 13, 2023, the countries identified as eligible foreign states are considered “excepted foreign states” and “excepted real estate foreign states” unless the Committee changes a foreign state's eligibility.  For each of these countries to remain excepted after the end of the three-year delayed effectiveness period (i.e., February 13, 2023), a Committee determination under 31 C.F.R. §§ 800.1001(a) or 802.1001(a), as applicable, is necessary.  This three-year period is intended to provide these initial eligible foreign states time to ensure that their national security-based foreign investment review processes and coordination with the United States on national security-based investment review meet the requirements under 31 C.F.R. §§ 800.1001(a) and 802.1001(a). 

In January 2022, the Committee determined that Australia and Canada have met these requirements.  Australia and Canada will remain excepted foreign states and excepted real estate foreign states unless the Committee rescinds a determination. 

CFIUS has identified Australia, Canada, and the United Kingdom as the initial excepted foreign states and excepted real estate foreign states.  CFIUS identified these countries due to certain aspects of their robust intelligence-sharing and defense industrial base integration mechanisms with the United States. 

In January 2022, CFIUS identified New Zealand as an eligible foreign state for the purposes of the excepted foreign state and excepted real estate foreign state definitions for reasons including New Zealand's intelligence-sharing relationship with the United States and its collective defense arrangement and cooperation with the United States.

As the excepted foreign state concept has significant implications for the national security of the United States, the Committee continues to identify a limited number of eligible foreign states and may expand the list in the future.

FIRRMA does not prohibit investments from any country, and investments from all foreign persons remain subject to CFIUS jurisdiction over transactions that could result in foreign control of a U.S. business.  As required by FIRRMA, however, the regulations limit the application of CFIUS’s jurisdiction over non-controlling “covered investments” and certain real estate transactions by certain foreign persons, defined as “excepted investors,” from certain “excepted foreign states.”  Any such eligible investor and foreign state must meet specific criteria to qualify for this status.