President Directs CFIUS to Increase Cyber Risk Scrutiny of Foreign Investments

CFIUS, or the committee on foreign investment in the United States is a part of the Treasury Department that reviews investments in U.S. companies by foreigners, such as the Chinese.

A couple of years ago, Congress passed an update to the CFIUS called FIRRMA, the Foreign Investment Risk Review Modernization Act, trying to put more teeth into CFIUS.

Now the President has told the CFIUS committee to sharpen its review of threats to sensitive data, cybersecurity, microelectronics and artificial intelligence.

This includes investments related to biotechnology and quantum computing.

This was done via an executive order, so it doesn’t have the force of law and the next president could decide that the Chinese stealing all of our quantum computing secrets is a good thing. Not likely, but definitely possible.

Under the Trump administration, Trump, through CFIUS, tried to force Chinese company ByteDance, owner of TikTok to sell the U.S. portion of the business. That attempt was not successful, although a few years later, it is possible that Oracle might store U.S. Tiktok users’ data. To be determined.

Treasury said that the number of deals that Chinese investors have submitted to CFIUS this year have doubled. That is a good think because before FIRRMA, a lot of deals went under the radar. The new rules allow the feds to unwind deals years later if it decided it is bad for US national security, so more investors are applying up front.

If you are involved in foreign investment in your company, this is definitely something to pay attention to. Credit: Reuters