The Committee on Foreign Investment in the United States decides whether a foreign purchase of an American business threatens national security, and it runs on a fixed statutory clock: a 45-day initial review, an optional 45-day investigation extendable by 15 days, and a 15-day window for the President to act, according to the committee's own published process. A February 21, 2025 policy memorandum has changed which deals enter that clock quickly and which face a slower, wider one.
What Is CFIUS and What Can It Actually Do?
CFIUS is an interagency committee, chaired by the Treasury Department and run through its Office of Investment Security, that reviews transactions in which a foreign person could acquire control of a U.S. business, plus certain foreign purchases of real estate near sensitive sites, for their effect on national security. Its authority traces to the 1988 Exon-Florio Amendment to the Defense Production Act, which first gave the President power to block a transaction, and was substantially expanded by the 2007 Foreign Investment and National Security Act and the 2018 Foreign Investment Risk Review Modernization Act, known as FIRRMA.
FIRRMA is the law that matters most today. It extended CFIUS jurisdiction beyond outright control deals to certain non-controlling investments and transactions touching critical technology, and it created the mandatory-filing regime described below. The committee does not have to approve or reject a deal publicly — most reviews end quietly, with CFIUS telling the parties in writing that it has concluded action and found no unresolved risk.
How Does the Review Clock Actually Run?
Once Treasury staff determine a filed notice is complete, the clock starts the next business day. From there the process moves through defined stages, each with its own statutory deadline.
| Stage | Length | What happens |
|---|---|---|
| Initial review | 45 days | CFIUS agencies assess the filed notice; most cases close here |
| Investigation | 45 days, extendable once by 15 days | Opens only in specific circumstances set out in the Defense Production Act |
| Presidential decision | 15 days | Follows only if CFIUS refers the case to the President |
At the end of any stage, CFIUS can clear a deal outright, negotiate a mitigation agreement that imposes conditions on the buyer, or refer the matter upward. The President's authority to block or unwind a transaction is the process's ultimate backstop, but it is rarely used — most outcomes are settled earlier, through mitigation or a decision by the parties to abandon the deal rather than wait out an investigation.
Which Deals Must File, and Which Don't Have To?
For most transactions, a CFIUS filing is voluntary: the parties choose to file to get legal certainty that the deal cannot later be unwound, a process the committee lays out in its published overview of the review process. Federal regulations at 31 C.F.R. part 800 make a filing mandatory in defined cases, chiefly where a foreign government is acquiring a substantial interest in certain sensitive U.S. businesses, and where the transaction involves a U.S. business that produces, designs, tests, manufactures, fabricates or develops critical technology subject to specific export controls. Separate rules impose a mandatory notification requirement for certain foreign purchases of real estate near military installations and other sensitive sites.
Skipping a required filing carries real exposure. Treasury updated its enforcement and penalty framework in a final rule that took effect December 26, 2024, revising how the government calculates fines for violations of CFIUS orders, mitigation agreements and mandatory-filing requirements — a sign, laid out in the committee's own guidance, that non-filing is treated as a compliance failure on its own, independent of whether the underlying deal posed any actual risk.
What Changed With the 2025 Policy Shift?
The America First Investment Policy memorandum, issued February 21, 2025, directs Treasury to expand CFIUS's reach in one direction and speed it up in another. It instructs the committee to strengthen scrutiny of "greenfield" investments, meaning new U.S. facilities built with foreign capital, which fall outside CFIUS's traditional acquisition-of-control focus, and to extend jurisdiction to "emerging and foundational" technologies, naming artificial intelligence specifically. The memorandum identifies China as the primary concern, alongside Cuba, Iran, North Korea, Russia and Venezuela, and lists semiconductors, artificial intelligence, quantum computing, biotechnology, hypersonics, aerospace and advanced manufacturing as sectors it wants shielded from investment tied to those governments.
For everyone else, the memorandum moves the other way. It establishes a fast-track review lane for investors from allied and partner nations and states a preference for passive investment structures that carry no governance or management rights, treating those as lower-risk by design. It also directs CFIUS to stop relying on the kind of lengthy, open-ended mitigation agreements that have defined the process for years, replacing them with concrete conditions a company can complete on a fixed schedule.
What Is the Strongest Case Against Widening the Net?
The memorandum's own text concedes the tension it creates: broadening CFIUS jurisdiction to cover greenfield projects and a wider band of technology necessarily pulls more transactions into a process that can still run 45 to 105 days before a deal fully clears, before any presidential referral is even in play. That is why the same document pairs the expansion with a fast-track lane and a move away from open-ended mitigation agreements — an implicit acknowledgment that a slower, broader review regime risks pushing allied capital elsewhere if it is not offset by speed for lower-risk deals. The policy's answer is to sort investment by the investor's origin rather than screen every deal identically; whether that sorting holds up in practice depends on how consistently Treasury applies the fast-track lane, which the memorandum itself does not measure.
What Does This Change for Companies and Dealmakers?
The practical shift is that the identity of the capital now matters earlier in a deal's timeline than it used to. A transaction backed by investors from an allied nation, structured without governance rights, is positioned to move through a faster lane and settle any conditions on a fixed schedule rather than an open-ended one. A transaction touching artificial intelligence, semiconductors or another named critical-technology sector, backed by capital connected to China or the other five governments the memorandum names, now sits inside an expanded jurisdiction that reaches even greenfield projects that previously fell outside CFIUS's reach entirely. For dealmakers, the source of financing is no longer a detail to resolve during diligence. It is a variable that determines which review clock a transaction is on before the first filing is ever submitted.
FAQ
Can CFIUS unwind a deal after it has already closed?
Yes. CFIUS retains authority to review a transaction it was not notified of, even after closing, and can require the parties to unwind it if the President determines it threatens national security, which is one reason voluntary filing for legal certainty is common practice.
Does every foreign investment in a U.S. company need a CFIUS filing?
No. Most transactions are reviewed only if the parties choose to file voluntarily. A filing becomes mandatory only in specific cases set out in federal regulation, chiefly government-controlled investors and deals touching critical technology or certain sensitive real estate.
What happens if a company skips a mandatory filing?
Treasury can pursue civil penalties under its enforcement and penalty rules, which were revised in a final rule effective December 26, 2024, and CFIUS can still review, and potentially unwind, the transaction later regardless of whether a penalty is assessed.
Who actually decides whether a deal is blocked?
CFIUS itself can clear a deal or negotiate mitigation, but the authority to block or force divestment of a transaction rests with the President, following a referral that occurs only after the committee's investigation stage concludes without resolution.
For a related policy perspective, read How a Federal Government Shutdown Actually Works.
For more context, read How a Pentagon Program Moves From Requirement to Fielding.