Page 77 - The CFIUS Book

5. The future of CFIUS
5.1. AllCFIUS,allthetime
CFIUS has moved prominently to center stage in the world of foreign direct investment. As we stated in the introduction, in the last few years, CFIUS has experienced a surge in the number of foreign investments submitted for review.105 We expect the number of filings to continue to increase due to the changes imposed by FIRRMA. Relatedly, FIRRMA authorizes CFIUS to collect a filing fee up to one percent of the value of the transaction, or $300,000. Those additional resources should allow CFIUS to continue to review the increased numbers of filings in 2018 and 2019. Nevertheless, we are in a period of CFIUS uncertainty. While FIRRMA authorizes a vast number of changes in how CFIUS conducts reviews, some of those changes may not be effective for over a year. While other changes are immediately effective, many details need to be clarified through regulations. CFIUS is expected to issue regulations implementing the legislation towards the end of 2019.
In the meantime, we provide our predictions for CFIUS reviews and enforcement below.
5.2. Expansion into privacy and data security
At the same time as CFIUS is reviewing more core national security transactions, we expect CFIUS filings to reach even higher numbers in 2019 because of expanded CFIUS reach and a broader interpretation of its remit. Where the Committee has generally scrutinized foreign acquisition of U.S. “critical infrastructure”, it has signaled that it may look closely at any deal where the target collects or maintains sensitive personal information. The blocking of the Ant Financial/MoneyGram deal continued signaled a laser-sharp focus on data security and protection. In addition, the blocking of the potential Broadcom-Qualcomm transaction (described in Section 3.4 above) highlights the Committee’s willingness to swiftly address potential threats to U.S. leadership in key technology sectors. Accordingly, foreign investment in the following areas may be subject to increasing CFIUS review:
l Healthcare
l Telecommunications l Financial services
l Mortgage lenders
l Insurance brokers
l Internet service providers
l Internet search engines
l Recruiting and job placement platforms
THE CFIUS BOOK
77