Treasury's Annual CFIUS Report to Congress Includes First Statistics on Critical Technology Declarations

The Treasury Department released its annual report to Congress for fiscal year 2020 on the Committee on Foreign Investment in the U.S., outlining CFIUS statistics, key judgments and an overview of transactions reviewed by the committee. Unlike previous annual reports, the FY20 version includes statistics on declarations required for transactions involving critical technologies. The report includes numbers on the declarations made under the requirements, which took effect in October but applied to transactions after Feb. 13, 2020 (see 2009140041), and the pilot program that preceded the requirements.

The declarations were “mandatory for control transactions and certain non-controlling investments in U.S. businesses that produce, design, test, manufacture, fabricate, or develop one or more critical technologies, consistent with definitions” from the Foreign Investment Risk Review Modernization Act, Treasury said. During FY20, CFIUS reviewed and took some sort of action on “126 declarations of covered transactions (including under the Pilot Program) submitted in 2020.” Of those, CFIUS requested that 28 file a written notice. CFIUS said it was unable to “complete action” on 16 declarations, and informed parties in 81 declarations that it completed all actions.

On average, it took 4.7 business days between the date declaration was submitted and when it was accepted, CFIUS said. The average for completing reviews and investigations was 29.8, it said. While CFIUS is able to waive the declaration requirement, it said it didn't waive the requirement for any transactions.

CFIUS said 187 covered transaction notices were filed last year, down from the number filed in 2018 and 2019, which were 2,229 and 231, respectively. CFIUS took an average of 45 days to complete a review of covered transactions and 86 days to complete an investigation in 2020, the report said.

The report also notes a drop in investigations -- CFIUS conducted 88 investigations in 2020 after conducting 113 investigations in 2019 and 158 in 2018. “The proportion of notices proceeding to investigation in 2020 was approximately 47 percent, down from approximately 49 percent of notices in 2019,” it said. “While the number of notices filed in 2020 decreased from 2019, the overall number of transactions reviewed or assessed by the Committee increased substantially, due to the introduction of declarations as a method for filing any type of transaction with the Committee.”