Page 54 - The CFIUS Book

THE CFIUS BOOK
finds appropriate in determining whether a transaction poses national security risk.42 Consequently, according to 2008 CFIUS Guidance, “CFIUS considers the national security factors identified in section 721 and all other national security factors that are relevant to a covered transaction it is reviewing.”43
Thus in practice, the listed factors do not effectively limit the scope of types of transactions subject to CFIUS review. In part, this is a result of the conscious effort after the events of September 11, 2001 to expand the scope. In 2007, new legislation known as FINSA44 explicitly added the areas of critical infrastructure and homeland security to the CFIUS review process.45
3.2.2. National Security Assessment
In making its national security assessment, CFIUS casts a wide net for potential national security risks. The main sources of information available to CFIUS are the following:
1. Notification review and inquiry: CFIUS staff undertakes a broad review of the information contained in the notification and responses by the parties to questions from CFIUS staff. The regulations also provide parties the opportunity to request ameeting.46 InformationprovidedinsuchmeetingsisalsoconsideredintheCFIUS review.
2. Public information review: CFIUS staff reviews publicly available sources of information about the parties and the industry sector involved.
3. Government information review: The constituent agencies of CFIUS, listed in the opening sections of this book, may have information on file on the parties and the transaction. The CFIUS guidance refers to that information as “government sources” of information.
4. Classified information review: As noted earlier in Section 3.1.1, the Director of National Intelligence issues a classified National Security Threat Assessment to CFIUS staff on or before the 20th day after commencement of the review. The expiration of this 20-day period is not directly communicated to the parties, but our experience is that the period starting about 21 days after the commencement of the review can be a heavy
period of questions from CFIUS staff to the parties, likely driven by questions raised in the National Security Threat Assessment.
rESpOnSIvEnESS IS CrITICal TO maInTaInIng gOOd COmmUnICaTIOn wITH rEgUlaTOrS and avOIdIng dElayS In yOUr rEvIEw Or InvESTIgaTIOn.
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