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Congress close to enacting new CFIUS rules that could make some US inbound investments more costly

Legislative action may increase the cost of some US inbound investments. Congress close to enacting new CFIUS rules that could make some US inbound investments more costly. Congress has approved for President Trump’s expected signing the National Defense Authorization Act of 2018 which contains provisions that will alter the operation of the Committee on Foreign Investment in the United States (CFIUS). CFIUS can block proposed transactions, require the parties involved to institute procedures to mitigate potential risk, and even unravel completed transactions if it believes the threat to US national security is too high. Some of the provisions altering CFIUS could make certain US inbound transactions more difficult or costly due to new reporting and review requirements.

Congress moves on CFIUS

Congress has approved for President Trump’s expected signing the National Defense Authorization Act of 2018 (NDAA) which contains provisions that will alter the operation of the Committee on Foreign Investment in the United States (CFIUS). CFIUS can block proposed transactions, require the parties involved to institute procedures to mitigate potential risk, and even unravel completed transactions if it believes the threat to US national security is too high. Some of the provisions altering CFIUS could make certain US inbound transactions more difficult or costly due to new reporting and review requirements. 

The House of Representatives and the Senate introduced bills – both titled, The Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) – proposing reform of CFIUS earlier in the year. The Senate’s version was incorporated into the NDAA, which then went into conference and was passed by the House on July 26. The Senate gave final approval to the NDAA on August 1, clearing the way for stricter CFIUS rules to be enacted soon with President Trump’s expected signing of the legislation.

Contact us

Michael Burak

Partner, US Inbound Services Leader, PwC US

Tel: +1 (973) 236 5398

Patrick M. McCarthy

Leader of the Global Intelligence Operations Center, U.S. Navy (Retired), PwC US

Tel: +1 (703) 682 5593

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