COMMITTEE ON 

FOREIGN 

INVESTMENT IN THE 

UNITED STATES

Treasury Should 

Coordinate 

Assessments of

Resources Needed to 

Address Increased 

Workload

Report to Congressional Requesters

February 2018

GAO-18-249

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-18-249, a report to 

congressional requesters

February 2018

COMMITTEE ON FOREIGN INVESTMENT IN 

THE UNITED STATES

Treasury Should Coordinate Assessments of

Resources Needed to Address Increased Workload

What GAO Found

The Committee on Foreign Investment in the United States (CFIUS) has 

experienced an increased workload in recent years, and member agency officials 

have expressed concerns that CFIUS staff levels may not be sufficient to 

complete committee functions. Officials attribute the increased workload to an 

increase of over 50 percent in the volume of transactions reviewed from 2011 to 

2016 and the complexity of those reviews in terms of technology, transaction 

structure, and national security concerns, compared to a modest increase in the 

number of staff assigned to CFIUS. Member agency officials stated that CFIUS 

is able to review all transactions that have been submitted to the committee. 

However, officials and external experts expressed concerns that agencies were 

limited in their ability to complete other functions, such as identifying transactions 

about which they have not been voluntarily notified but that may pose a risk. 

Standards for Internal Control in the Federal Government states that 

management should establish the organizational structure necessary to achieve 

its objectives and periodically evaluate this structure. Treasury—the agency that 

leads CFIUS— has not coordinated member agencies’ efforts to better 

understand the staffing levels needed to address the current and future workload 

associated with core functions of the committee. Without this information, CFIUS 

may be limited in its ability to fulfill its objectives and address national security 

concerns.

Table: Committee on Foreign Investment in the United States (CFIUS) Member Agency Staff 

Compared to the Number of Covered Transactions Reviewed, 2011-2016

2011 2012 2013 2014 2015 2016

Percentage

change 

2011-2016

Covered 

Transactions 

Reviewed 111 114 97 147 143 172 55%

Number of 

staff assigned 82 82 79 85 83 91 11%

Source: GAO analysis of Treasury-reported CFIUS cases and agency-reported staffing levels. | GAO-18-249

Officials from CFIUS member agencies and selected nonmember agencies, as 

well as external experts, expressed a range of views on the potential benefits 

and drawbacks to possible changes to CFIUS. GAO organized the possible 

changes into three categories: (1) altering the structure of CFIUS, (2) redefining 

which transactions should be considered for CFIUS review, and (3) expanding 

the factors CFIUS considers when evaluating the impacts of a foreign transaction 

on national security. Agency officials were generally satisfied with CFIUS’ 

structure, such as the committee’s chair and membership. Views among officials 

and experts varied on redefining which transactions should be considered for 

review, such as requiring CFIUS to review all transactions covered by its 

authority regardless of notification. Officials and experts generally did not support

expanding the list of national security factors CFIUS considers, such as by 

adding a net economic benefit test. Agency officials and experts agreed that one 

trade-off related to some possible changes is a likely increase to the CFIUS 

workload, which they noted is already straining agencies’ staff resources.

View GAO-18-249. For more information, 

contact Kimberly Gianopoulos at (202) 512-

8612 or gianopoulosk@gao.gov or Marie Mak 

at (202)-512-4841 or makm@gao.gov. 

Why GAO Did This Study

The United States economy has 

historically been the largest recipient of 

foreign direct investment in the world—

receiving $373 billion in 2016, 

according to U.S. government 

statistics. Ensuring that these foreign 

investments do not harm national 

security can be a challenge. CFIUS is 

an interagency group that reviews 

transactions under its authority—

certain foreign acquisitions or mergers 

of U.S. businesses—to determine their

effects on U.S. national security, while 

maintaining an open investment 

climate. If CFIUS identifies concerns, it 

may work with parties to the 

transaction to mitigate them. In rare 

cases, CFIUS may recommend that 

the President block or suspend a 

transaction. 

GAO was asked to review the CFIUS 

process and possible changes to that 

process. This report (1) examines 

changes in CFIUS’s workload and 

staffing from 2011 through 2016, and

(2) provides information on stakeholder 

views on potential changes to CFIUS.

GAO analyzed CFIUS information on 

staffing levels and transactions 

reviewed, and interviewed officials 

from member agencies, selected 

nonmember agencies that have 

CFIUS-related expertise, and 

knowledgeable external experts, such 

as think tanks.

What GAO Recommends

Treasury, as CFIUS lead, should 

coordinate member agencies’ efforts to 

better understand the staffing levels

needed to address the current and 

projected CFIUS workload associated 

with core committee functions. 

Treasury concurred.
Page i GAO-18-249 Foreign Investment

Letter 1

Background 2

Stakeholders Have Concerns about the Increased CFIUS 

Workload but Treasury Has Not Coordinated Staffing Level 

Assessments 13

CFIUS Member Agencies and External Experts Provided Views 

on Benefits and Drawbacks of Possible Changes to CFIUS 22

Conclusions 30

Recommendation for Executive Action 31

Agency Comments and Our Evaluation 31

Appendix I Objectives, Scope, and Methodology 37

Appendix II Characteristics of Transactions Reviewed by the Committee 

on Foreign Investment in the United States (CFIUS) 39

Appendix III Factors to Determine Whether Submitted Transactions Pose a

National Security Risk 41

Appendix IV Reported Number of Agency Staff Assigned to Committee Activities 42

Appendix V Comments from the Department of the Treasury 43

Appendix VI Comments from the Department of Agriculture 44

Appendix VII GAO Contacts and Staff Acknowledgments 45

Contents
Page ii GAO-18-249 Foreign Investment

Tables

Table 1: Covered Transactions Reviewed by the Committee on 

Foreign Investment in the United States (CFIUS), 2011-

2016 14

Table 2: Number of Instances CFIUS Member Agencies Acted as 

Co-lead in 2016. 18

Table 3: Perspectives Expressed Regarding Possible Changes to 

the Chairmanship of CFIUS 23

Table 4: Perspectives Expressed Regarding Possible Addition of 

New Voting Members 23

Table 5: Perspectives Expressed Regarding Possible Extension of 

Voting Rights to Ex Officio Members 24

Table 6: Perspectives Expressed Regarding Extension of CFIUS 

Timeframes 25

Table 7: Perspectives Expressed Regarding Expansion of the 

Definition of a Covered Transaction 26

Table 8: Perspectives Expressed Regarding Mandatory CFIUS 

Review of All Covered Transactions 27

Table 9: Perspectives Expressed Regarding Mandatory CFIUS 

Review of Selected Subsets of Covered Transactions 28

Table 10: Perspectives Expressed Regarding Expansion of the 

National Security Factors CFIUS Should Consider 29

Table 11: Perspectives Expressed Regarding the Addition of a Net 

Economic Benefit Test to CFIUS Review 30

Table 12: Treasury List of Illustrative Factors the Committee on 

Foreign Investment in the United States and the President 

Should Consider in Determining Whether a Transaction 

Notified to the Committee Poses a National Security Risk 41

Table 13: Reported Number of Member Agency Staff Assigned to 

Committee on Foreign Investment in the United States 

(CFIUS) Activities in Fiscal Year 2016 42

Figures

Figure 1: Members of the Committee on Foreign Investment in the 

United States (CFIUS) 4

Figure 2: Process for Reviewing Transactions Notified to the 

Committee on Foreign Investment in the United States 

(CFIUS) 8

Figure 3: Total Number of CFIUS Member Agency Staff Assigned 

to CFIUS Activities, Compared to the Number of Covered 

Transactions Reviewed, 2011-2016 19
Page iii GAO-18-249 Foreign Investment

Abbreviations

CFIUS Committee on Foreign Investment in the United States

DHS Department of Homeland Security

DOD Department of Defense

DOE Department of Energy

DOL Department of Labor

FBI Federal Bureau of Investigation

FCC Federal Communications Commission

FINSA Foreign Investment and National Security Act of 2007

HHS Department of Health and Human Services

ODNI Office of the Director of National Intelligence

OMB Office of Management and Budget

OSTP Office of Science and Technology Policy

State Department of State

Treasury Department of the Treasury

USDA Department of Agriculture

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-18-249 Foreign Investment

441 G St. N.W.

Washington, DC 20548

February 14, 2018

Congressional Requesters

The United States economy has historically been the world’s largest 

recipient of foreign direct investment, receiving $373.4 billion in 2016, 

according to the Bureau of Economic Analysis. The Bureau also reported 

that businesses acquired, established, or expanded by foreign direct 

investors employed 480,800 workers in the United States that year. 

Ensuring that these foreign investments do not harm U.S. national 

security can be a challenge. Concerns have included foreign acquisitions 

of U.S. companies in traditional sectors, such as semiconductors, and 

cutting-edge fields, such as artificial intelligence, as well as an increase in 

the number of acquisitions from certain countries. The Committee on 

Foreign Investment in the United States (CFIUS) is an interagency 

committee that reviews certain foreign acquisitions, mergers, or takeovers 

of U.S. businesses to determine the effect of a transaction on the national 

security of the United States. Informed by the committee’s review, the 

President of the United States has the authority to block or suspend a 

transaction that threatens to impair the national security of the United 

States.1 In the wake of concerns about the acquisition of commercial port 

operations for six U.S. ports by Dubai Ports World—a company based in 

the United Arab Emirates—Congress passed the Foreign Investment and 

National Security Act of 2007 (FINSA).2 The FINSA amendments 

currently guide the CFIUS review process. Congressional bills have been 

introduced proposing ways to reform the CFIUS process.

You asked us to review issues related to the CFIUS process and possible 

changes to that process. This report (1) examines changes in CFIUS’s 

workload and staffing from 2011 through 2016, and (2) provides 

information on stakeholder views on potential changes to CFIUS.

 1

Congress directed that this authority can only be invoked when no law other than section 

721 of the Defense Production Act of 1950 and the International Emergency Economic 

Powers Act provides adequate and appropriate authority to protect national security, and 

when there is credible evidence that the foreign interest exercising control might take 

action that threatens to impair national security.

2

FINSA is the most recent amendment to section 721 of the Defense Production Act of 

1950. Pub. L. No. 110-49, 121 Stat. 246 (2007) (amending section 721 of the Defense 

Production Act of 1950, codified as amended at 50 U.S.C. § 4565).

Letter
Page 2 GAO-18-249 Foreign Investment

To address these objectives, we reviewed relevant laws, executive 

orders, and regulations. We analyzed information on workload and 

staffing levels to determine the extent to which CFIUS workload and 

staffing levels have changed from 2011 through 2016, the most recent 

information available at the time of our review. We also conducted 

individual semistructured interviews with selected stakeholders, which 

consisted of officials from the 9 CFIUS voting member agencies, the 2 ex 

officio nonvoting member agencies, and 3 selected nonmember agencies 

that have CFIUS case-related expertise, as well as with 16 external 

experts3 to collect views and information on the challenges, such as 

workload, that CFIUS faces, potential changes to address the challenges, 

and their possible benefits and drawbacks. The information obtained from 

these stakeholders cannot be generalized across all stakeholders. 

Appendix I provides more information on our scope and methodology.

We conducted this performance audit from December 2016 to February 

2018 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

In 1975, an executive order established CFIUS to monitor the impact of 

and coordinate U.S. policy on foreign investment in the United States.4 In 

1988, Congress enacted the Exon-Florio amendment adding section 721 

to the Defense Production Act of 1950.5 The amendment authorized the 

President to investigate the impact of certain foreign acquisitions of U.S. 

companies on national security and to suspend or prohibit acquisitions 

 3

These external experts include former government officials, lawyers who represent 

parties with transactions notified to CFIUS, and representatives from industry associations 

and think tanks.

4

Exec. Order No. 11,858, 40 Fed. Reg. 20,263 (May 7, 1975).

5

Omnibus Trade and Competitiveness Act of 1988, Pub. L. No. 100-418, Title V, Subtitle 

A, Part II, § 5021, 102 Stat. 1425 (Aug. 23, 1988).

Background

CFIUS Overview
Page 3 GAO-18-249 Foreign Investment

that might threaten to impair national security.6 FINSA further amended 

the Defense Production Act, established CFIUS as it currently exists, and 

guides the committee.7 One of the purposes of FINSA’s enactment was to 

ensure national security while promoting foreign investment and the 

creation of U.S. jobs.

CFIUS reviews transactions involving a large variety of countries and 

industry sectors to determine if such transactions pose a threat to national 

security and whether the transactions should be allowed to proceed (for 

more information on the characteristics of transactions reviewed by 

CFIUS, see app. II). FINSA does not formally define national security, but 

provides a number of factors for CFIUS and the President to consider in 

determining whether a transaction poses a risk. These factors include the 

potential national security-related effects on U.S. critical technologies and 

whether the transaction could result in the control of a U.S. business by a 

foreign government. CFIUS also may consider other factors that it finds 

appropriate in determining whether a transaction poses a national 

security risk (for a full list of factors, see app. III).

Under FINSA, CFIUS is chaired by the Secretary of the Treasury and 

includes voting members from the Departments of Commerce, Defense, 

Energy, Homeland Security, Justice, and State; and the Offices of the 

U.S. Trade Representative, and Science and Technology Policy. In 

addition, the Office of the Director of National Intelligence (ODNI) and the 

Department of Labor (DOL) are nonvoting ex officio members. Various 

other White House offices also observe and, as appropriate, participate in 

CFIUS activities (see fig. 1). CFIUS may also solicit perspectives and 

expertise from nonmember agencies, such as the Department of 

Agriculture, designating them as members for purposes of the review of 

particular transactions, as appropriate, which can include negotiating or 

imposing mitigation measures or referring the transaction to the President 

for decision. The committee, which meets weekly at a staff level, 

generally has three core functions: (1) review transactions that have been 

submitted to the committee and take action as necessary to address any 

national security concerns; (2) monitor and enforce compliance with 

mitigation measures; and (3) identify transactions of concern that have 

not been notified to CFIUS for review.

 6

Pub. L. No. 100-418, § 5021.

7

50 U.S.C. § 4565.
Page 4 GAO-18-249 Foreign Investment

Figure 1: Members of the Committee on Foreign Investment in the United States 

(CFIUS)

Note: CFIUS may also solicit perspectives and expertise from nonmember participant agencies, such 

as the Department of Agriculture, when necessary.

The Secretary of the Treasury, as the chair of CFIUS, is responsible for a 

number of tasks. According to Department of the Treasury (Treasury) 

officials, these tasks, including coordinating operations of the committee, 

facilitating information collection from parties to a transaction,8 reviewing 

 8

According to federal regulations, the terms “party to a transaction” and “parties to a 

transaction” mean: “(a) in the case of an acquisition of an ownership interest in an entity, 

the person acquiring the ownership interest, and the person from which such ownership 

interest is acquired, without regard to any person providing brokerage or underwriting 

services for the transaction; (b) in the case of a merger, the surviving entity, and the entity 

or entities that are merged into that entity as a result of the transaction; (c) in the case of a 

consolidation, the entities being consolidated, and the new consolidated entity; (d) in the 

case of a proxy solicitation, the person soliciting proxies, and the person who issued the 

voting interest; (e) in the case of the acquisition or conversion of convertible voting 

instruments, the issuer and the person holding the convertible voting instruments; and (f) 

in the case of any other type of transaction, any person who is in a role comparable to that 

of a person described in paragraphs (a) through (e) of this section.” 31 C.F.R. § 800.220.
Page 5 GAO-18-249 Foreign Investment

and sharing data on mergers and acquisitions with member agencies, 

and managing CFIUS timeframes, are carried out by Treasury employees 

specifically staffed to support CFIUS. Treasury also communicates on the 

committee’s behalf with the parties, members of Congress, and the 

general public. When necessary, Treasury is responsible for delivering 

the committee’s recommendation that the President should suspend or 

prohibit a transaction.

In examining covered transactions, CFIUS members seek to identify and 

address, as appropriate, any national security concerns that arise as a 

result of the transaction. According to the FINSA amendment, a “covered”

transaction is defined as any merger, acquisition, or takeover by or with 

any foreign person that could result in foreign control of any person 

engaged in interstate commerce in the United States.9 CFIUS reviews 

“notices” that have been submitted—or notified—to the committee by 

parties to transactions. Notices to CFIUS contain information about the 

nature of the transaction and the parties involved. According to guidance 

on the Treasury website, with limited exceptions, a transaction receives 

“safe harbor” when CFIUS has completed its review and determines that 

the transaction may proceed. According to Treasury officials, safe harbor 

provides the parties to the transaction some certainty that CFIUS and the 

President will not subject the transaction to review again.

FINSA does not require that parties notify CFIUS of a transaction; 

however, CFIUS may choose to initiate a review of any covered 

transaction.10 Transactions that have not been notified to CFIUS for 

review are known as “non-notified transactions.” According to member 

agency officials, Treasury and several other member agencies have 

processes for identifying non-notified transactions for CFIUS to potentially 

review. For instance, Treasury staff compile data on mergers and 

 9

50 U.S.C. § 4565(a)(3). FINSA further defines a covered transaction as one that is 

proposed or pending after August 23, 1988. There are certain transactions by foreign 

entities that CFIUS does not have the authority to review. According to regulations, these 

noncovered transactions include start-ups, as well as acquisitions of assets, if such assets 

do not constitute a U.S. business, such as equipment or land. See 31 C.F.R. §§ 800.211, 

800.226, 800.301, 800.302. 

1050 U.S.C. § 4565(b). If member agencies become aware of a transaction that might be 

covered that has not been voluntarily notified to CFIUS and may raise national security 

considerations, CFIUS may invite the parties to the transaction to submit a notice. CFIUS 

also has the authority to unilaterally initiate a review of the transaction. 50 U.S.C. § 

4565(b)(1)(D).

Selecting Transactions for 

CFIUS Review
Page 6 GAO-18-249 Foreign Investment

acquisitions and distribute information about potential non-notified 

transactions to member agencies for review. In addition, according to 

member agency officials, in 2010, the Federal Bureau of Investigation 

(FBI) began a working group, now called Project Iceberg, which is 

responsible for identifying and understanding counterintelligence threats 

posed by foreign investments that have not been notified to CFIUS. The 

working group holds monthly meetings that intelligence agencies as well 

as CFIUS member agencies are invited to attend. In the absence of 

voluntary reporting by the parties involved or independent discovery of 

the transaction, it is possible that CFIUS may not review a covered 

transaction that could pose a risk to national security.11

Based on information including FINSA and regulations, the CFIUS 

process for reviewing transactions that have been notified to the 

committee comprises up to four stages: pre-notice consultation, national 

security review, national security investigation, and presidential action. 

CFIUS reviews each transaction individually, with a focus on the aspects 

of the transaction that could pose a risk.12 For each transaction reviewed, 

the committee identifies agencies with relevant expertise to act as co-lead 

with Treasury to guide the transaction through the CFIUS process.13

CFIUS reviews are confidential and protected from public disclosure. A 

CFIUS review could be concluded when CFIUS members reach 

consensus about whether the transaction should be allowed to proceed, 

including on the basis of mitigation, if necessary, or when the parties 

withdraw their notice, whether for commercial reasons or in light of 

 11According to agency officials, there are thousands of transactions every year that 

involve foreign entities, not all of which pose a national security concern. CFIUS member 

agency officials have varying opinions about the number of those that might potentially 

pose a concern and should be reviewed by CFIUS. 

12According to Treasury officials, CFIUS considers the intent and capabilities of the 

acquirer to cause harm to U.S. national security (threat) and the nature of the U.S. 

business and its susceptibility to impairing U.S. national security (vulnerability) should the 

vulnerability be exploited or the business compromised. CFIUS views national security risk 

as a function of the interaction between threat and vulnerability and the potential 

consequences of that interaction for U.S. national security.

13According to Treasury officials, co-lead agencies may include agencies that are not 

standing members of the committee, but which become ad hoc members for purposes of 

particular transactions due to their expertise pertaining to such transactions.

CFIUS Process for 

Reviewing Notified 

Transactions
Page 7 GAO-18-249 Foreign Investment

CFIUS’s national security concerns.14 Absent one of these conclusions to 

a CFIUS review, the committee may send the transaction to the 

President, with a recommendation that the President suspend or prohibit 

it. See figure 2 for an overview of the steps that comprise the CFIUS 

process for reviewing selected transactions.

 14CFIUS may also reject and not review a notice if the parties do not satisfy requirements 

in the regulations, such as not including all of the information required for CFIUS to review 

the transaction. CFIUS may also reject a notice if, during the course of CFIUS review, 

there is a material change to the transaction or information comes to light that contradicts 

material information provided in the notice by the parties.
Page 8 GAO-18-249 Foreign Investment

Figure 2: Process for Reviewing Transactions Notified to the Committee on Foreign Investment in the United States (CFIUS)

a

CFIUS may identify for the parties information that, even though not required for acceptance of the 

notice, may facilitate CFIUS’s review and which the parties may want to compile before the review 

begins. The questions that CFIUS poses to the parties during the pre-notice consultation sometimes 

give parties an indication of the national security issues that CFIUS may consider with respect to the 

transaction during the course of the review.

b

According to Treasury officials, parties may withdraw and resubmit their notice at any point in the 

process to allow more time to engage with CFIUS to resolve national security concerns identified by 

the committee. Parties may also withdraw and subsequently choose to abandon the transaction.
Page 9 GAO-18-249 Foreign Investment

Pre-Notice Consultation

Before a transaction is reviewed by CFIUS, Treasury may conduct a prenotice consultation with parties to a notified transaction. Upon request, 

Treasury and other agencies meet with the parties, provide informal 

guidance on the CFIUS review process, and may review early drafts of 

the notice.

Once the parties have developed the final draft, they submit it to the 

committee for review. When Treasury, with input from member agencies, 

determines that the notice of the transaction is complete, the official 

CFIUS review of the transaction commences.

National Security Review

CFIUS conducts a national security review of each notified transaction, 

which includes determining whether it is a covered transaction and 

developing a national security threat assessment. The national security 

review lasts up to 30 days and begins the day after Treasury determines 

the filing is complete and circulates the filing to CFIUS member agencies. 

At the beginning of the national security review, CFIUS identifies co-lead 

agencies. According to Treasury officials, typically within the first 10 to 12 

days of the national security review, CFIUS develops a “covered 

transaction analysis,” which determines whether the transaction is a 

covered transaction according to FINSA.

15 According to Treasury officials, 

there typically is consensus among voting members on whether the 

transaction is a covered transaction.16 During the national security review, 

CFIUS also assesses whether there is credible evidence that the foreign 

party in control of that U.S. business might take action to impair the 

national security of the United States17 as well as whether the covered 

 15As part of this analysis, CFIUS examines whether the transaction could result in foreign 

control of a U.S. business.

16Treasury officials stated that if consensus cannot be reached by members of the 

committee as to whether the transaction is a “covered transaction” as defined by FINSA, 

the case will be reviewed by senior-level officials at each of the member agencies until 

consensus is reached. CFIUS may also end its review if it is determined that the notified 

transaction is not a covered transaction. According to Treasury officials, CFIUS does not 

“clear” a transaction that is “not covered” and a certification to Congress is not required in 

such instances. 

1731 C.F.R. § 800.501(a)(2).
Page 10 GAO-18-249 Foreign Investment

transaction is a foreign government-controlled transaction.18 Concurrently, 

ODNI develops a national security threat assessment, with input and 

support from the intelligence community, to be completed during the first 

20 days of the national security review.19

If CFIUS finds that the covered transaction does not present national 

security risks or that other provisions of law provide adequate and 

appropriate authority to address the risks, CFIUS may end its review. If 

CFIUS chooses to conclude its review at this point, CFIUS is to advise 

the parties in writing that the transaction has been cleared and allowed to 

proceed. According to information provided by Treasury, CFIUS has 

historically concluded action on the majority of transactions during or at 

the end of the 30-day national security review. The committee’s 

determination must be certified to specified members of Congress after 

the review is completed.20 However, if at the end of the national security 

review, CFIUS has not yet determined that there are no unresolved 

national security concerns and the committee requires additional time, 

CFIUS may proceed to a national security investigation, which must be 

completed within 45 days.

21

National Security Investigation

If, during the 45-day national security investigation, CFIUS identifies an 

unresolved national security concern, it works with the parties to mitigate, 

if appropriate, any national security risks that may exist. If an agency 

identifies an unresolved national security concern, the agency develops 

an analysis of the potential risks posed by the covered transaction and 

includes recommendation for action, such as mitigation measures or 

 18According to FINSA, the term ‘‘foreign government-controlled transaction’’ means any 

covered transaction that could result in the control of any person engaged in interstate 

commerce in the United States by a foreign government or an entity controlled by or 

acting on behalf of a foreign government. 50 U.S.C. § 4565(a)(4).

1950 U.S.C. § 4565(b)(4).

2050 U.S.C. § 4565(b)(3)(A). According to Treasury officials, the Assistant Secretary of the 

Treasury and the co-lead agency certify that there are no unresolved national security 

concerns.

21Additionally, transactions that are foreign government-controlled or that would result in 

control by a foreign person of critical infrastructure of or within the United States move 

automatically to a national security investigation unless, at the lead agency Secretary- or 

Deputy Secretary-level, CFIUS concludes that the transaction will not impair U.S. national 

security. 50 U.S.C. § 4565(b)(2)(B) and (D).
Page 11 GAO-18-249 Foreign Investment

referral to the President, and shares this analysis with other members of 

the committee. Mitigation measures may include ensuring that only 

authorized persons have access to certain technologies, information, or 

facilities, or providing the U.S. government the right to review certain 

business decisions and to object if the decisions raise national security 

concerns.22 According to Treasury officials, CFIUS member agencies aim 

for mitigation that would be effective, can be monitored, and would be 

enforceable. If there is a difference of opinion among CFIUS member 

agencies about the level or type of mitigation that should be utilized, 

CFIUS agencies discuss the matters to reach consensus.23

In some cases, parties may choose to withdraw and resubmit the notice.24

If CFIUS has determined that national security concerns cannot be 

mitigated, according to Treasury officials, CFIUS typically advises the 

parties that the committee will refer the matter to the President for 

decision. According to Treasury officials, parties have the opportunity to 

withdraw and resubmit the notice if they need additional time to discuss 

CFIUS’s concerns or to present additional information or mitigation 

proposals for CFIUS’s consideration.25 Sometimes parties choose to 

withdraw and abandon the transaction if, for instance, CFIUS proposes 

mitigation measures that the parties choose not to accept. Parties may 

also abandon the transaction for commercial reasons unrelated to the 

CFIUS review. If parties choose to withdraw and resubmit a transaction, 

the national security review begins again, and the committee has another 

75 days to complete the review of the transaction.

If CFIUS obtains consensus from committee members that there are no 

unresolved national security concerns or the national security concerns 

have been mitigated, the national security investigation ends, and the 

 22For example, in at least one instance, CFIUS member agency officials reported that they 

have imposed a requirement that, under certain circumstances, a third party be allowed to 

monitor electronic communication between the parties to the covered transaction to 

ensure that the communication does not pose a risk to national security.

23Treasury designates agencies as co-leads for mitigation, which are responsible for 

monitoring any mitigation measures. Co-leads for mitigation typically are the agencies that 

served as co-lead agencies for purposes of the review and investigation.

24Parties may choose to withdraw their notice at any point prior to the conclusion of the 

CFIUS review process. 31 C.F.R. § 800.507.

25Treasury must, as appropriate, establish a process to track any actions that may be 

taken by any party to the transaction, in connection with the transaction, before the notice 

is resubmitted. 50 U.S.C. § 4565(l)(2)(A)(iii).
Page 12 GAO-18-249 Foreign Investment

covered transaction receives safe harbor. Treasury and the co-lead 

agency send written certification to specified members of Congress that 

there are no unresolved national security concerns.26 However, if the 

committee concludes that a proposed foreign investment threatens to 

impair the U.S. national security and the threat cannot be mitigated, 

CFIUS will elevate the notice to the President for determination and 

CFIUS may recommend that the President suspend or prohibit the 

transaction.27 According to Treasury officials, parties may also withdraw 

their notice at this point rather than have the President decide whether to 

block the transaction.

Presidential Action

If, at the end of the national security investigation, CFIUS elevates a 

transaction to the President for determination, the President has 15 days 

from the completed investigation to decide to prohibit or suspend the 

acquisition, or to take no action.28 Only four transactions reviewed by 

 26The Secretary or Deputy Secretary of the Treasury and the secretary or deputy 

secretary of the co-lead agency certify to specified members of Congress that there are no 

unresolved national security concerns. For a list of the members of Congress, see 50 

U.S.C. § 4564(b)(3)(C)(iii).

27CFIUS may choose not to mitigate national security concerns or to not refer a 

transaction to the President for determination if another U.S. law, separate from section 

721 as amended by FINSA and the International Emergency Economic Powers Act, 

provides adequate and appropriate authority to protect the national security of the United 

States. According to Treasury officials, examples of U.S. laws that may cause CFIUS to 

not take action include export controls such as the International Traffic in Arms 

Regulations and Export Administration Regulations.

2850 U.S.C. § 4565(d). Presidential authority to suspend or prohibit a covered transaction 

only applies when the President determines, among other things, that no law, other than 

section 721 of the Defense Production Act of 1950 and the International Emergency 

Economic Powers Act, provides adequate and appropriate authority to protect the national 

security of the United States.
Page 13 GAO-18-249 Foreign Investment

CFIUS have been the subject of a presidential prohibition since the 

committee was established in 1975.29

CFIUS has experienced an increase in workload in recent years, but 

Treasury, as CFIUS lead, has not coordinated member agency efforts to 

better understand staffing levels needed to complete core committee 

functions. According to CFIUS member agency officials, the volume of 

transactions notified to the committee and the complexity of CFIUS 

reviews in terms of technology, transaction structure, and national 

security concerns have increased substantially from 2011 through 2016, 

while CFIUS staffing levels have experienced a modest increase during 

the same time period. Member agency officials stated that CFIUS is able 

to review all transactions that have been voluntarily notified to the 

committee. However, many stakeholders, including most member agency 

officials and several external experts, expressed concerns that CFIUS 

member agencies were limited in their ability to complete other CFIUS 

functions, such as identifying non-notified transactions. In addition, 

agency officials were unsure if they would have sufficient staff if the 

CFIUS workload were to continue to increase. Standards for Internal 

Control in the Federal Government states that management should 

establish the organizational structure necessary to achieve its objectives 

and periodically evaluate this structure. Treasury has not coordinated 

member agency efforts to better understand the staffing levels needed to 

complete the current and future workload associated with core functions 

of the committee.

 29Most recently, in September 2017, the President issued an order prohibiting the $1.3 

billion dollar acquisition of Lattice Semiconductor Corporation, a U.S. firm, by purchasers 

including Canyon Bridge Fund I, LP, a U.S.-based firm with links to a Chinese corporation. 

According to SEC filings, the parties to this transaction had withdrawn and refiled with 

CFIUS multiple times. Ultimately, according to the executive order announcing the 

decision, the President blocked the transaction due to the finding of credible evidence that 

the purchasers might, in exercising control of the acquired company, take action that 

threatened to impair the national security of the United States. 82 Fed. Reg. 43,665 (Sept. 

18, 2017). When referencing any specific transactions that may have been reviewed by 

CFIUS, we relied on publicly available information that we identified and was not derived 

from information filed with CFIUS.

Stakeholders Have 

Concerns about the 

Increased CFIUS 

Workload but 

Treasury Has Not 

Coordinated Staffing 

Level Assessments 
Page 14 GAO-18-249 Foreign Investment

Despite figures decreasing in one year, overall, the number of covered 

transactions that CFIUS reported it reviewed increased from 111 

transactions in 2011 to 172 transactions in 2016, or almost 55 percent 

(see table 1).30 In 2017, CFIUS reviewed 238 transactions, according to 

Treasury officials.

31 According to member agency officials, the increased 

volume of covered transactions resulted in increased work for all CFIUS 

members, no matter which agency is the co-lead, because each member 

agency must review each transaction notified to the committee.

Table 1: Covered Transactions Reviewed by the Committee on Foreign Investment 

in the United States (CFIUS), 2011-2016

Year Covered 

Transactions 

Reviewed

Transactions 

That Proceeded 

to National 

Security 

Investigations

Transactions 

Withdrawn after 

Submissionc

Transactions 

Resulting in 

Use of 

Mitigation 

Measures

2011 111 40 6 8

2012 114b 45 22 8

2013 97 48 8 11

2014a 147 51 12 9

2015a 143 66 13 11

2016 172b 79 27 17

Source: Annual Report to Congress. Committee on Foreign Investment in the United States, 2015. | GAO-18-249

a

In both 2014 and 2015, CFIUS rejected one notice because the parties did not satisfy requirements 

in the regulations or because a material change to the transaction or information came to light that 

contradicted material information the parties provided in the notice.

b

Of the covered transactions reviewed, the President blocked one transaction in 2012 and another in 

2016.

c

The statistic for transactions withdrawn may include transactions that have been withdrawn and 

resubmitted to the committee, transactions withdrawn for commercial reasons, and transactions 

withdrawn due to national security concerns raised by CFIUS. For example, according to information 

provided by Treasury, the number of transactions withdrawn and abandoned in light of CFIUS-related 

national security concerns was two in 2014, three in 2015, and five in 2016.

 30According to one Treasury official, transactions that parties notified to CFIUS but were 

ultimately determined not to be covered transactions are not included in the number of 

covered transactions reviewed by CFIUS. Additionally, transactions for which parties 

participated in pre-notice consultation but ultimately did not file a notice with CFIUS also 

are not included.

31According to Treasury officials, this reflects the number of notices for which CFIUS 

initiated a review and could include transactions that CFIUS determined to be “not 

covered.”

The Volume of Covered 

Transactions CFIUS 

Reviewed Increased 

between 2011 and 2016
Page 15 GAO-18-249 Foreign Investment

The number of reported covered transactions requiring national security 

investigations almost doubled during this same period, increasing from 40 

transactions in 2011 to 79 transactions in 2016. Treasury officials told us 

that they estimated that the total number of transactions that proceeded

to national security investigations was greater in 2017 than it was in 

2016.32 They said that the increase in the number of covered transactions 

that require a national security investigation is another indication that the 

committee’s workload has increased. One Treasury official noted that the 

number of times that parties withdraw and resubmit transactions can 

increase the workload of the committee as it must review the transaction 

each time it is submitted.

Additionally, the number of reported covered transactions that include 

mitigation measures has increased. Each year, CFIUS places mitigation 

measures on a relatively small number of covered transactions. For 

example, according to Treasury officials, 18 (roughly 10 percent) of 172 

transactions the committee reviewed in 2016 resulted in mitigation 

measures. According to member agency officials, mitigation measures 

rarely expire; thus, the number of these measures increases over time, as 

does the accompanying workload for co-lead agencies tasked with 

overseeing the measures.

Officials from CFIUS member agencies stated that the complexity of 

CFIUS reviews in terms of technology, transaction structure, and national 

security concerns has increased in recent years. They said that additional 

time and staff have been required to address this rise in complexity and to 

complete these reviews. For instance, one member agency official told us 

that reviews of transactions from parties whose companies use new and 

emerging technologies, such as artificial intelligence and robotics, 

typically require input from agency subject matter experts to help the 

committee understand how, if at all, the acquisition of these technologies 

by foreign parties could create national security concerns.

According to member agency officials, the amount of time and number of 

staff needed to review a transaction can fluctuate greatly based on, 

among other things, the technology involved. One agency official said that 

6 of their employees, on average, are involved in reviewing a less 

complex transaction, but up to 15 employees may be necessary to 

 32As of January 2018, data for 2017 had not yet been finalized by Treasury. 

The Increased Complexity 

of CFIUS Reviews Has 

Increased CFIUS 

Workload
Page 16 GAO-18-249 Foreign Investment

complete the review if the technology involved is more complicated. The 

number of agency staff involved can increase further if senior level 

management is required to participate in the review. This official also 

stated that most of the transactions reviewed in the past were from 

sectors that agency officials were familiar with and involved more 

predictable issues, but recently, transactions more frequently involved 

complex technology, which required additional expertise. Officials from 

another member agency stated that a majority of their staff involved in 

reviewing transactions do not have CFIUS as a primary duty and that 

their agency has reallocated resources to address the increased case 

load. One Treasury official stated that one case was so complex that it 

required one staff member to dedicate all of their time to its review, and 

the other responsibilities of this employee had to be shifted to other 

members of the staff. 

Additionally, according to member agency officials, reviews of 

transactions involving technologies the government frequently uses have 

increased, requiring additional time and staff to understand how this 

technology affects various agencies. For instance, member agency 

officials said that reviewing transactions involving semiconductors, which 

are commonly used in an array of products used by the government, 

typically requires additional time and staff because CFIUS member

agencies must understand, among other things, how the approval of a 

transaction could affect systems across government agencies.

According to CFIUS member agency officials, the structures of the 

transactions the committee reviews have also become more complex, 

requiring more time and staff to assess. For example, business 

arrangements—such as complex corporate arrangements, joint ventures, 

loan arrangements, nondisclosure agreements, and memoranda of 

understanding—may require the work of additional staff. Treasury officials 

also stated that these arrangements can make it more difficult to 

determine whether the transaction is covered by CFIUS authorities, as 

there may be commercial relationships that affect the parties’ decisionmaking. According to Treasury officials, such arrangements can also 

increase the complexity of the national security review, as they may 

create additional “indirect threats” that must also be analyzed.

Member agency officials explained that it has become more challenging 

to identify the ultimate beneficial owners—the persons who ultimately own 

and control a company—due to the structure of the transaction. According 

to Treasury officials, in certain countries, it can be difficult to distinguish 

between control by a private entity and control by a state entity due to the 
Page 17 GAO-18-249 Foreign Investment

various relationships created by the transaction structure. In these cases, 

CFIUS often requires additional information from the parties in such 

transactions before the national security review can begin. Member 

agency officials stated that they had been encountering these 

arrangements more frequently, and additional time and staff had been 

required to examine the national security implications of these 

transactions.

Finally, the nature of the national security concerns the committee 

considers has expanded beyond the traditional threats, requiring more 

time and staff to assess them, according to member agency officials. 

National security concerns include traditional ones, such as threats to 

U.S. critical infrastructure. Emerging concerns include the possibility of a 

foreign entity obtaining access to personally identifiable information that, if 

disclosed, could be exploited for purposes that have national security 

consequences or the proximity of property to areas considered sensitive 

by the U.S. government.33

According to agency officials, the number of staff assigned to CFIUS 

activities has not kept pace with the increase in covered transactions 

reviewed by CFIUS. According to one Treasury official, the more an 

agency is required to act as co-lead, the more time and staff are needed 

of the agency. After Treasury, which acts as co-lead on every review, the 

Departments of Defense (DOD), Energy (DOE), and Homeland Security 

(DHS) acted as co-lead on the largest number of CFIUS reviews in 2016 

(see table 2).

 33The Department of Defense has been concerned about the potential for foreign entities 

to obtain property near areas the U.S. government considers sensitive, as we discussed in 

our December 2014 and April 2016 reports. GAO, Defense Infrastructure: Risk 

Assessment Needed to Identify If Foreign Encroachment Threatens Test and Training 

Ranges, GAO-15-149 (Washington, D.C.: Dec. 16, 2014). GAO, Defense Infrastructure: 

DOD Has Made Limited Progress in Assessing Foreign Encroachment Risks on Federally 

Managed Land, GAO-16-381R (Washington, D.C.: Apr. 13, 2016).

Treasury Has Not 

Coordinated Assessments 

of Staffing Levels Needed 

to Complete CFIUS Core 

Functions
Page 18 GAO-18-249 Foreign Investment

Table 2: Number of Instances CFIUS Member Agencies Acted as Co-lead in 2016.

Agencya Number of Instances Agencies 

Acted as Co-lead in 2016b

Department of the Treasury (Chair) 172

Department of Defense 71

Department of Energy 39

Department of Homeland Security 32

Department of Commerce 22

Department of Justice 15

Department of State 2

Office of the United States Trade Representative 0

Office of Science and Technology Policy 0

Source: GAO presentation of information reported by agencies. | GAO-18-249

a

Although not a member agency, USDA acted as a co-lead for 3 cases in 2016.

b

Treasury is co-lead on every CFIUS notice. The number of instances other member agencies act as 

co-lead may not add up to the total number led by Treasury because multiple agencies could act as 

co-lead for any one notice. The number of instances agencies acted as a co-lead are for calendar 

year 2016.

According to information provided by member agency officials, CFIUS 

saw a modest increase in staff assigned to CFIUS activities since 2011, 

with Treasury, DOD, DOE, DHS, and State adding a few staff, while 

staffing levels did not rise at the other member agencies. The total 

number of staff assigned to CFIUS activities increased from 82 in 2011 to 

91 in 2016, an increase of 11 percent. During that same period, covered 

transactions reviewed by CFIUS increased from 111 transactions in 2011 

to 172 transactions in 2016, an increase of almost 55 percent (see fig. 3).
Page 19 GAO-18-249 Foreign Investment

Figure 3: Total Number of CFIUS Member Agency Staff Assigned to CFIUS 

Activities, Compared to the Number of Covered Transactions Reviewed, 2011-2016

Member agency officials stated that the number of staff assigned to work 

on CFIUS activities may fluctuate throughout the year based on the 

committee’s work. For example, as previously discussed, CFIUS member 

agencies may rely on experts with other responsibilities throughout each 

agency to provide assistance with the review as the need arises. For 

instance, in fiscal year 2016, DOE had four staff dedicated to CFIUS, but 

one DOE official said he reaches out to relevant subject matter experts, 

who have other responsibilities, to provide input on transactions within 

their area of expertise.

Treasury officials stated that staff have been able to review the number of 

transactions that have been voluntarily notified to CFIUS to date. One 

Treasury official said that, despite the increase in the number of 

transactions reviewed by CFIUS, the committee has almost always 

provided a determination to the parties within the timeframes required as 
Page 20 GAO-18-249 Foreign Investment

to whether the covered transaction should be allowed to proceed or 

blocked by the President.34 Further, Treasury officials stated that despite 

staff constraints, CFIUS has, as needed, appropriately mitigated the 

national security concerns for the transactions the committee has 

approved.

However, several member agency officials and external experts 

expressed concerns that, due to staff constraints, CFIUS member 

agencies were limited in their ability to complete other CFIUS functions, 

such as monitoring mitigation measures and identifying non-notified 

transactions. First, the time and staff necessary to monitor mitigation 

measures varies. For instance, according to one member agency official, 

some mitigation measures require daily monitoring from officials, while 

other mitigation measures require only the review of an annual report 

submitted by parties to the transaction. Several member agency officials 

acknowledged that they have fewer staff than they would like to devote to 

monitoring mitigation measures.

Second, these member agency officials also said that they are not able to 

devote the amount of time they would like to the task of identifying nonnotified transactions. CFIUS member agencies review data on mergers 

and acquisitions to identify non-notified transactions of concern, those 

that have not been notified to CFIUS for review. In recent years, 

according to agency officials, CFIUS has seen an increase in the number 

of non-notified transactions CFIUS could potentially review.35 One official 

indicated that in 2016, their agency examined 2,683 potential non-notified 

transactions, an increase of roughly 38 percent from 2014. Member 

agency officials stated that because non-notified transactions are 

frequently reviewed after the acquisition has been completed, the process 

of mitigating potential national security concerns of non-notified 

transactions can be difficult.36 Several member agency officials suggested 

that they would like to devote more time to examining non-notified 

 34According to one Treasury official, this includes those transactions where the parties 

withdraw and refile to gain more time to address the committee’s concerns, which restarts 

the 75-day CFIUS review.

35Treasury officials were unable to identify the overall number of non-notified transactions 

that have been filed with CFIUS. Member agency officials stated that the non-notified 

transactions identified sometimes end up voluntarily filing with CFIUS, thus these 

transactions are not categorized as non-notified transactions in CFIUS data.

36According to member agency officials, non-notified transactions are often identified 

using public data sources and most transactions have already been completed by the time 

they are reported publicly.
Page 21 GAO-18-249 Foreign Investment

transactions, but staff constraints limit the amount of time agencies can 

spend conducting this task.

Several member agency officials said that they do not know if current 

staffing levels would be able to address a further increase in CFIUS 

workload. Treasury officials noted that the volume of transactions 

reviewed by CFIUS will likely continue to increase. Moreover, 

congressional bills have been introduced that, if enacted, would alter the 

CFIUS process. As discussed later in this report, agency officials stated 

that some of these potential changes would likely further increase CFIUS 

workload. According to several CFIUS member agency officials, if the

CFIUS workload were to increase, additional staff would likely be 

necessary to complete committee functions, such as identifying nonnotified transactions and monitoring mitigation measures. Officials from 

two member agencies also expressed concerns about their ability to 

review transactions that have been notified to the committee if the volume 

of CFIUS notices increased.

According to Treasury officials, CFIUS does not have a centralized 

budget, and Treasury does not have authority to determine CFIUS 

staffing levels at committee member agencies. Treasury officials stated 

that they have taken steps, in coordination with the Office of Management 

and Budget (OMB), to collect data from the member agencies on current 

staffing levels expended on CFIUS core functions but have not 

established timeframes for this data collection. Standards for Internal 

Control in the Federal Government states that management should 

establish the organizational structure necessary to achieve its objectives 

and periodically evaluate this structure. Treasury officials stated that they

have conducted an assessment of Treasury’s staffing needs and have

encouraged other agencies to do the same. However, Treasury, as 

CFIUS lead, has not coordinated member agencies’ efforts to better 

understand the staffing levels needed to address the current and future 

CFIUS workload associated with core committee functions, such as 

identifying and reviewing non-notified transactions. Without this 

information, CFIUS may be limited in its ability to fulfill its objectives and 

address threats to the national security of the United States.
Page 22 GAO-18-249 Foreign Investment

Officials from CFIUS member agencies (voting and nonvoting) and 

selected nonmember participant agencies, as well as external experts, 

expressed a range of views on the potential benefits and drawbacks to 

possible changes to CFIUS. In our interviews with them, these 

stakeholders discussed a variety of possible changes to CFIUS that we 

organized into three categories: (1) altering the structure of CFIUS, (2) 

redefining which merger and acquisition transactions should be 

considered for CFIUS review, and (3) expanding the list of factors CFIUS 

considers as it evaluates the impacts of a foreign transaction on national 

security.37 For the most part, CFIUS member agencies and nonmember 

participant agencies stated that the existing structure is working 

effectively and described drawbacks to potential changes, such as

changing membership or voting rights. Perspectives among agency 

officials and external experts varied on the potential effects of redefining 

which transactions should be considered for review, such as requiring 

CFIUS to review all covered transactions. Agency officials and external 

experts described a range of potential effects of expanding the list of 

factors CFIUS considers. They generally stated that including a net 

economic benefit test in the review, for example, would not be beneficial. 

Many officials and external experts agreed that one potential drawback of 

many of the possible changes is a likely increase to the CFIUS workload, 

generating concerns about the committee’s capacity to complete its core 

functions.

In general, officials from member and nonmember agencies participating 

in CFIUS were satisfied with the structure of the committee. Possible 

changes, which would affect the way CFIUS is organized and does its 

work, include changes to the chairmanship of CFIUS, changes to the 

voting membership of CFIUS (adding new voting members and giving 

voting rights to current nonvoting members), and changes to the 

timeframes under which CFIUS works. However, for the most part, CFIUS 

member agencies and nonmember participant agencies reported that the 

existing structure works effectively. See tables 3, 4, 5, and 6 for details on 

the perspectives expressed on these changes.

 37See appendix III for the list of factors CFIUS currently considers.

CFIUS Member 

Agencies and 

External Experts 

Provided Views on 

Benefits and 

Drawbacks of 

Possible Changes to 

CFIUS

Agencies Participating in 

CFIUS Were Generally 

Satisfied with the Structure 

of the Committee
Page 23 GAO-18-249 Foreign Investment

Table 3: Perspectives Expressed Regarding Possible Changes to the Chairmanship of CFIUS

Possible change: Change chairmanship of CFIUS from Treasury to an agency with a greater national security focus 

Bottom line: CFIUS member agencies told us they are generally content with Treasury’s leadership of the committee.

In Favor Against

A few external experts suggested that replacing Treasury 

as chair with one of the national security agencies might 

help strengthen CFIUS’s national security focus or its 

ability to monitor and enforce mitigation measures.

Most voting member agency officials told us that they were in favor of 

keeping Treasury as the chair of CFIUS. (Officials from four member 

agencies did not respond to this question.)

A few member agency officials told us that other agencies do not have the 

financial expertise and balance of economic and national security 

responsibilities that make Treasury well suited to assessing whether a 

particular transaction is covered under CFIUS authorities.

A few agency officials and one external expert stated that such a change 

would likely require significant restructuring by the affected agencies with 

limited effect on outcomes.

Legend:

CFIUS Committee on Foreign Investment in the United States

Treasury Department of the Treasury

Source: GAO analysis of interviews with stakeholders. | GAO-18-249

Table 4: Perspectives Expressed Regarding Possible Addition of New Voting Members

Possible change: Add new voting members to CFIUS, such as USDA, FCC, FBI, or HHS

Bottom line: Nonmember agencies we spoke with generally see their current participation in CFIUS as appropriate to address their 

issues.

In Favor Against

One nonmember agency official and a couple of 

external experts suggested new members could 

potentially provide the committee with more consistent 

access to expertise on issues such as food security, 

biopharma, or telecommunications.

HHS officials stated they would be in favor of becoming 

a CFIUS member to identify and mitigate national 

security risks more effectively within their areas of 

expertise.

According to officials at most member agencies, Treasury generally 

identifies notices that require expertise beyond the member agencies and 

reaches out to other agencies as needed.

Officials from three nonmember agencies—FBI, FCC, and USDA—told us 

they were satisfied with their current involvement in CFIUS. FBI specifically 

noted that they participate in nearly every meeting as part of the Department 

of Justice.

Officials from three nonmember agencies—FCC, USDA, and HHS—said 

they currently devote relatively little time to CFIUS activities and are only 

called upon to review the small number of transactions for which they have 

expertise. Officials from two of these agencies additionally noted that 

making them voting members of CFIUS would entail a substantial increase 

in their workload, largely reviewing transactions that are unrelated to their 

areas of expertise. For example, USDA told us that from 2013 to 2016 they 

participated in roughly 25 reviews out of a total CFIUS caseload of around 

550.

Legend:

CFIUS Committee on Foreign Investment in the United States

FBI Federal Bureau of Investigation

FCC Federal Communications Commission

HHS Department of Health and Human Services

USDA Department of Agriculture

Source: GAO analysis of interviews with stakeholders. | GAO-18-249
Page 24 GAO-18-249 Foreign Investment

Table 5: Perspectives Expressed Regarding Possible Extension of Voting Rights to Ex Officio Members

Possible change: Grant voting rights to ex officio members—ODNI and DOL

Bottom line: Ex officio CFIUS members do not see a need for a voting role.

In Favor Against

A few external experts suggested that giving a vote to 

ODNI, with its responsibility for intelligence and 

security, could help strengthen CFIUS’s national 

security focus.

Officials from ODNI and a few other agencies we spoke with stated that 

ODNI’s role as the impartial developer of the national security threat 

assessment is important. One official told us that ODNI having a vote on the 

committee could call into question whether its assessments remained 

impartial and objective. A few external experts noted that this could be seen 

as prescribing policy, which they said is not the role of intelligence agencies.

DOL officials described limited involvement in CFIUS as an ex officio member 

and stated they did not believe that additional involvement on their part is 

merited. They told us that, since 2015, they reviewed 2 cases, of a total 

CFIUS caseload of over 300.

Legend:

CFIUS Committee on Foreign Investment in the United States

ODNI Office of the Director of National Intelligence

DOL Department of Labor

Source: GAO analysis of interviews with stakeholders. | GAO-18-249
Page 25 GAO-18-249 Foreign Investment

Table 6: Perspectives Expressed Regarding Extension of CFIUS Timeframes

Possible change: Extend timeframes beyond the current 30 days for review and the 45 days for investigation, if necessary

Bottom line: Most member agency officials stated that CFIUS almost always completes its reviews within current timeframes and that 

the option to withdraw and refile provides flexibility. They stated additional time could benefit a small number of reviews, but this would 

need to be balanced against costs to government and industry.

In Favor Against

A few external experts stated that CFIUS could benefit from 

additional time to develop a thorough understanding of 

complex issues associated with a given transaction or to 

obtain additional information from parties in the timeframes 

provided. They also stated that current timeframes may be 

insufficient to develop effective mitigation measures.

A few external experts suggested that a tiered system—

allowing more time for complex transactions—might 

alleviate the pressures for parties to withdraw their 

transaction and resubmit it with additional information 

requested by CFIUS.

A few external experts suggested that allowing CFIUS to 

pause the timeline to request additional information from 

the companies might alleviate the time pressures of these 

requests, creating less uncertainty about the timeframes for 

the business community than the current withdraw and 

resubmit process.a

Officials from most member agencies stated that they are almost always

able to complete most reviews within the current timeframes, although a 

few acknowledged that a small number require additional time because 

of, for example, insufficient information provided by the company or the 

complexity of the issue reviewed.

A few agency officials and external experts stated that the business 

community prefers the clarity of an explicit timeline because of the costs 

of additional delays and would prefer to have the review completed more 

quickly.

Legend:

CFIUS Committee on Foreign Investment in the United States

Source: GAO analysis of interviews with stakeholders. | GAO-18-249

a

According to the CFIUS annual report, in 2015, out of 143 transactions, 13 (9 percent) withdrew their 

transaction after filing. Nine of these withdrawn transactions were subsequently refiled and fully 

reviewed by CFIUS, while the other 4 were abandoned.

Member agency officials and external experts offered a range of views 

about the effects of changes to the types of transactions reviewed by 

CFIUS. Possible changes, which would affect which merger and 

acquisition transactions would be considered for CFIUS review, include 

changes to the definition of a covered transaction and changing the 

voluntary notification process to make review of all or some covered 

transactions mandatory. Stakeholders we spoke with identified benefits 

and drawbacks to each of these changes. Many stakeholders agreed that 

one potential drawback of these possible changes is a likely increase to 

the CFIUS workload. See tables 7, 8, and 9 for details on the 

perspectives expressed.

Perspectives Varied on the 

Effects of Changes to the 

Types of Transactions to 

Be Considered for CFIUS 

Review
Page 26 GAO-18-249 Foreign Investment

Table 7: Perspectives Expressed Regarding Expansion of the Definition of a Covered Transaction

Possible change: Expand the statutory definition of a covered transaction to include foreign transactions not considered acquisitions of 

an existing U.S. company, such as the creation of a new business in the United States

Bottom line: A few member agency officials and external experts said that more clearly including the creation of new businesses and 

joint ventures could improve CFIUS coverage, but others stated that CFIUS has used existing flexibilities to address these concerns in 

the past.

In Favor Against

According to a few member agency officials and external 

experts, some types of foreign investment in the United 

States are not clearly included under the definition of a 

covered transaction, such as certain types of joint ventures 

and the creation of new businesses, and may present 

national security concerns, such as the proximity of a new 

business to sensitive locations.a One external expert noted a 

lack of data about trends on these types of investments, 

raising concerns that CFIUS would not review these 

transactions for national security risks without expanding the 

definition of a covered transaction. By explicitly including 

these transactions, CFIUS could be more likely to review 

possible risks associated with them.

A few member agency officials and experts stated that CFIUS has 

sufficient authority to examine some of these types of investments. For 

example, a few external experts stated that, in the past, CFIUS had 

been able to review transactions of interest, even though they were 

newly created businesses, rather than an acquisition of an existing 

business.

One external expert noted that, in some cases, joint ventures not 

covered by CFIUS could be reviewed elsewhere in the government 

under export control authorities, because of concerns about technology 

transfer to a foreign party.

One member agency official and a couple of external experts 

expressed concern that this would substantially increase the CFIUS 

workload.

Legend:

CFIUS Committee on Foreign Investment in the United States

Source: GAO analysis of interviews with stakeholders. | GAO-18-249

a

The Department of Defense has been concerned about the potential for foreign entities to obtain 

property near areas the U.S. government considers sensitive, as we discussed in our December 2014 

and April 2016 reports. GAO, Defense Infrastructure: Risk Assessment Needed to Identify If Foreign 

Encroachment Threatens Test and Training Ranges, GAO-15-149 (Washington, D.C.: Dec. 16, 

2014). GAO, Defense Infrastructure: DOD Has Made Limited Progress in Assessing Foreign 

Encroachment Risks on Federally Managed Land, GAO-16-381R (Washington, D.C.: Apr. 13, 2016).
Page 27 GAO-18-249 Foreign Investment

Table 8: Perspectives Expressed Regarding Mandatory CFIUS Review of All Covered Transactions

Possible change: Make CFIUS review of all covered transactions mandatory

Bottom line: According to a few member agency officials, mandatory review of all covered transactions could limit their ability to 

identify and focus on those transactions that genuinely require the committee’s attention and would represent a substantial increase in 

workload.

In Favor Against

A few external experts stated that requiring all covered 

transactions to file with CFIUS could reduce the chance 

that national security risks are being missed due to 

companies not voluntarily filing with CFIUS and not being 

identified through CFIUS non-notified transaction reviews.

A few external experts suggested that a modest filing fee, 

such as that used by the Federal Trade Commission for 

proposed mergers, could be used to alleviate resource 

constraints.

Officials from a few member agencies noted that a requirement to review 

all transactions would limit their ability to identify and focus on those 

transactions that genuinely require the committee’s attention.

Officials from one member agency stated that CFIUS’s current ability to 

initiate reviews provides incentive for companies to notify CFIUS about 

their transactions.

Officials from most member agencies told us that they believed that they 

could not manage such a substantial increase in transactions filed with 

CFIUS given current staffing levels.

A few external experts suggested that, rather than mandatory filing of a 

formal notice for all covered transactions, mandatory registration, such as 

that used by the Securities and Exchange Commission, would create a 

listing of all covered transactions to facilitate non-notified review while 

imposing limited additional burdens on CFIUS or the business community.

Legend:

CFIUS Committee on Foreign Investment in the United States

Source: GAO analysis of interviews with stakeholders. | GAO-18-249
Page 28 GAO-18-249 Foreign Investment

Table 9: Perspectives Expressed Regarding Mandatory CFIUS Review of Selected Subsets of Covered Transactions

Possible change: Make review of selected subsets of covered transactions, such as those from a particular country or in a particular 

sector, mandatory

Bottom line: A few member agency officials stated that their risk analyses already consider these factors and making filing mandatory 

for selected subsets of foreign mergers and acquisitions would represent an increase in workload.

In Favor Against

Officials from a few member agencies and a few external 

experts stated that focusing on factors such as country of 

origin or industry sector could provide greater attention to 

key areas of concern. While resulting in an increase in 

workload, this approach would result in less of an increase 

than would mandatory filing of all transactions.

Officials from a few member agencies, as well as one external expert, 

expressed concern that if there were a list of sectors or countries for 

which filing would be mandatory, that list could quickly become outdated 

as circumstances change. Problems identified with such a list include the 

time and resources needed to update it.

One external expert stated that the creation of a formal list of countries to 

receive particular attention could risk violating a bilateral or multilateral 

trade or investment agreement.

Officials from a few member agencies stated that their risk analyses 

already consider these factors when determining whether to review a nonnotified transaction.

A few external experts stated that CFIUS already evaluates risks of 

foreign control and that focusing on state-owned enterprises would be of 

limited benefit.

Legend:

CFIUS Committee on Foreign Investment in the United States

Source: GAO analysis of interviews with stakeholders. | GAO-18-249

Member agency officials and external experts were generally satisfied 

with the list of factors CFIUS currently considers when it reviews foreign 

transactions and offered a variety of opinions on the effects of changes to 

them. Possible changes include expanding the statutory national security 

factors to be considered and introducing an economic impact 

assessment. Stakeholders we spoke with identified benefits and 

drawbacks to each of these changes. See tables 10 and 11 for details on 

the perspectives expressed.

Most Stakeholders Were 

Satisfied with the Factors 

CFIUS Currently 

Considers in Reviewing 

Foreign Transactions
Page 29 GAO-18-249 Foreign Investment

Table 10: Perspectives Expressed Regarding Expansion of the National Security Factors CFIUS Should Consider

Possible change: Expand the statutory national security factors for CFIUS to consider as part of its reviews to explicitly include 

additional factors, such as food security, personally identifiable information, or soft power

Bottom line: Most member agency officials stated that CFIUS’s existing national security factors provide flexibility to allow it to pursue 

reviews on a range of topics.

In Favor Against

Officials from one member agency and a couple of external 

experts raised concerns that CFIUS may overlook new risks that 

are not clearly identified by the illustrative factors for consideration 

delineated in FINSA.

Most member agency officials and a few external experts stated 

that the lack of specificity in the statute allows CFIUS the flexibility 

to pursue reviews more easily as national security risks change 

than a more formal and precise definition would allow. One 

external expert expressed concerns that a less flexible and more 

precise approach would be too restrictive and could result in 

parties actively trying to circumvent CFIUS review.

Most member agency officials stated that member agencies reach 

out to agency subject matter experts and nonmember agencies 

with the expertise to assess these new or changing threats when 

conducting their reviews. According to a few external experts, 

CFIUS has covered cases on these new and changing threats in 

recent instances.

A few external experts expressed concerns that proposals to add 

certain national security factors to the CFIUS statute were more 

about economic reciprocity than national security, and could be 

better dealt with through other trade authorities. For example, a 

few external experts held differing views on whether food security 

issues were a legitimate national security issue or an economic 

issue.

Legend:

CFIUS Committee on Foreign Investment in the United States

FINSA Foreign Investment and National Security Act of 2007

Source: GAO analysis of interviews with stakeholders. | GAO-18-249
Page 30 GAO-18-249 Foreign Investment

Table 11: Perspectives Expressed Regarding the Addition of a Net Economic Benefit Test to CFIUS Review

Possible change: Include a net economic benefit test as part of the CFIUS review

Bottom line: According to most officials and a few external experts, implementing a net economic benefit test would require substantial 

changes to the existing staff, resources, and processes for CFIUS, and might detract from its ability to address national security 

concerns.

In Favor Against

A few external experts suggested that some observers 

believe that a net economic benefit test could enable the 

United States to assess the economic value of a given 

transaction, beyond the scope of questions of national 

security.

Officials from most CFIUS member agencies stated that staff currently 

working on CFIUS are focused on assessing and mitigating national 

security risks. A few officials said that additional economists and labor 

and industrial experts would likely be necessary to assess the net 

economic benefit of a potential transaction.

A few member agency officials stated that adding a net economic 

benefit test would weaken the existing focus on national security. They 

suggested that CFIUS may not be the appropriate entity to conduct 

such an analysis.

One external expert stated that businesses understand and respect 

the need to mitigate national security concerns, but may be less likely 

to willingly subject themselves to an evaluation of the economic 

benefits of their proposed transactions.

Officials from one member agency and a couple of external experts 

expressed concern that implementing a net economic benefit test 

might lead to reciprocal action by other countries that could reduce 

opportunities for foreign investment by U.S. companies.

Officials from a few member agencies noted that any effort to 

implement a net economic benefit test would need to be designed with 

existing international treaties and trade agreements in mind. 

Legend:

CFIUS Committee on Foreign Investment in the United States

Source: GAO analysis of interviews with stakeholders. | GAO-18-249

The United States maintains an open investment climate that recognizes 

the benefits of foreign investment to its economy. CFIUS reviews certain 

foreign acquisitions, mergers, or takeovers of U.S. businesses to 

determine the effect of the transaction on the national security of the 

United States. The increased number of covered transactions notified to 

CFIUS and the complexity of these cases compared with the modest 

increase in the number of people assigned to reviewing them have, 

according to member agency officials, taxed the staff of CFIUS member 

agencies. Member agency officials and external experts have expressed 

particular concern that CFIUS member agencies were limited in their 

ability to complete core functions, such as identifying non-notified 

transactions and monitoring mitigation measures. At the same time, 

congressional bills have been introduced proposing changes to FINSA 

that could increase the committee’s workload. Officials from Treasury and 

other member agencies are aware of pressures on their CFIUS staff 

Conclusions
Page 31 GAO-18-249 Foreign Investment

given the current workload and have expressed concerns about possible 

workload increases. Treasury and OMB have begun to collect information 

from agencies on their current CFIUS staffing levels. This is a crucial first 

step that could facilitate a better understanding for both the committee 

and Congress of the current staffing levels across the committee’s 

organizational structure. However, Treasury, as CFIUS lead, has not 

coordinated member agency efforts to assess the current and future 

staffing levels needed to complete the committee’s core functions. 

Without attaining an understanding of the staffing levels needed to 

address the current and future CFIUS workload, particularly if legislative 

changes to CFIUS’s authorities further expand its workload, CFIUS may 

be limited in its ability to fulfill its objectives and address threats to the 

national security of the United States.

The Secretary of the Treasury, as the chair of CFIUS, and working with 

member agencies, should coordinate member agencies’ efforts to better 

understand the staffing levels needed to address the current and 

projected CFIUS workload associated with core committee functions. 

(Recommendation 1)

We provided a draft of this report for review and comment to the 

Departments of Agriculture, Commerce, Defense, Energy, Health and 

Human Services, Homeland Security, Justice, Labor, State, and the 

Treasury as well as the Offices of the U.S. Trade Representative, Science 

and Technology Policy, and the Director of National Intelligence, and the 

Federal Communications Commission. We also provided a draft to the 

Office of Management and Budget.

Treasury provided written comments, which are reproduced in appendix 

V. In its comments, Treasury stated that it is working with OMB to 

determine current resource levels across the CFIUS member agencies 

and has encouraged agencies to assess their staffing needs. Treasury 

also stated that it generally concurred with the draft report’s 

recommendation to “conduct an assessment to better understand staffing 

levels needed to address the current and projected CFIUS workload.” 

However, Treasury noted that CFIUS does not have a centralized budget, 

and Treasury does not have the authority over CFIUS staffing levels at 

member agencies. We acknowledge Treasury’s points and, therefore, we 

modified the report and clarified the recommendation to focus on 

Treasury’s coordination role, since, as we note in the report, Treasury is 

responsible for coordinating the operations of the committee and 

Recommendation for 

Executive Action

Agency Comments

and Our Evaluation
Page 32 GAO-18-249 Foreign Investment

communicating on the committee’s behalf with the parties, members of 

Congress, and the general public. Treasury stated in an email that the 

clarifications to the recommendation address the point raised in its 

comment letter.

USDA also provided written comments, reproduced in appendix VI. In its 

comments, USDA stated that it generally agreed with the findings in 

GAO’s draft report. The letter further noted that USDA is satisfied with 

Treasury’s willingness to include USDA in cases related to food and 

agriculture and is comfortable continuing to work as a non-voting member 

of CFIUS.

The Departments of Commerce, Homeland Security, State, Treasury, and 

the Offices of the U.S. Trade Representative and Science and 

Technology Policy provided written technical comments, which we 

incorporated as appropriate. 

The Departments of Defense, Energy, Health and Human Services, 

Justice, Labor, the Office of the Director of National Intelligence, and the 

Federal Communications Commission indicated via email that they did 

not have comments.

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the Departments of 

Agriculture, Commerce, Defense, Energy, Health and Human Services, 

Homeland Security, Justice, Labor, State, and the Treasury as well as the 

Offices of the U.S. Trade Representative, Science and Technology 

Policy, and the Director of National Intelligence, and the Federal 

Communications Commission. In addition, the report will be available at 

no charge on the GAO website at http://www.gao.gov.

If you or your staff have questions about this report, please contact 

Kimberly Gianopoulos at (202) 512-8612 or gianopoulosk@gao.gov or 

Marie A. Mak at (202) 512-2527 or makm@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found 
Page 33 GAO-18-249 Foreign Investment

on the last page of this report. GAO staff who made key contributions to 

this report are listed in appendix VII.

Kimberly M. Gianopoulos

Director, International Affairs and Trade

Marie A. Mak

Director, Acquisition and Sourcing Management
Page 34 GAO-18-249 Foreign Investment

List of Requesters

The Honorable Steve Chabot

Chairman

Committee on Small Business

House of Representatives

The Honorable Bennie G. Thompson

Ranking Member

Committee on Homeland Security

House of Representatives

The Honorable Devin Nunes

Chairman

Permanent Select Committee on Intelligence

House of Representatives

The Honorable Robert B. Aderholt

Chairman

Subcommittee on Agriculture, Rural Development, Food and Drug

 Administration, and Related Agencies

Committee on Appropriations

House of Representatives

The Honorable John Culberson

Chairman

Subcommittee on Commerce, Justice, Science, and Related Agencies

Committee on Appropriations

House of Representatives

The Honorable Mike Rogers

Chairman

Subcommittee on Strategic Forces

Committee on Armed Services

House of Representatives

The Honorable Dana Rohrabacher

Chairman

Subcommittee on Europe, Eurasia, and Emerging Threats

Committee on Foreign Affairs

House of Representatives
Page 35 GAO-18-249 Foreign Investment

The Honorable Ralph L. Abraham

House of Representatives

The Honorable Mo Brooks

House of Representatives

The Honorable Bradley Byrne

House of Representatives

The Honorable Ken Calvert

House of Representatives

The Honorable Paul Cook

House of Representatives

The Honorable Peter A. DeFazio

House of Representatives

The Honorable Rosa DeLauro

House of Representatives

The Honorable Brian Fitzpatrick

House of Representatives

The Honorable Denny Heck

House of Representatives

The Honorable Duncan D. Hunter

House of Representatives

The Honorable Sam Johnson

House of Representatives

The Honorable Walter B. Jones

House of Representatives

The Honorable Thomas McClintock

House of Representatives

The Honorable Robert Pittenger

House of Representatives
Page 36 GAO-18-249 Foreign Investment

The Honorable Bill Posey

House of Representatives

The Honorable Chris Smith

House of Representatives
Appendix I: Objectives, Scope, and 

Methodology

Page 37 GAO-18-249 Foreign Investment

This report (1) examines changes in the Committee on Foreign 

Investment in the United States’ (CFIUS) workload and staffing from 2011 

through 2016, and (2) provides information on stakeholder views on 

potential changes to CFIUS.

To address these objectives, we reviewed relevant laws, executive 

orders, and regulations. We interviewed officials from each CFIUS voting 

member agency, including the Departments of Commerce, Defense, 

Energy, Homeland Security, Justice, State, and the Treasury as well as 

the Offices of the U.S. Trade Representative and Science and 

Technology Policy. We also interviewed officials from the two nonvoting 

ex officio members, the Office of the Director of National Intelligence and 

the Department of Labor. In addition, we interviewed officials from 

nonmember agencies that have CFIUS case-related expertise, including 

the Departments of Agriculture and Health and Human Services, and the 

Federal Communications Commission.

To examine the changes in CFIUS workload and staffing levels over the 

past 5 years, we analyzed information on workload and staffing levels at 

the voting member agencies from 2011 through 2016, the most recent 

information available at the time of our review. We also reviewed the 

2014 and 2015 CFIUS annual reports. In addition, we interviewed officials 

from the nine CFIUS voting member agencies about their workload and 

staffing levels; any changes in the volume, types, and complexity of 

transactions reviewed by CFIUS; and their ability to complete the core 

functions of the committee. We requested information from the 9 CFIUS 

voting member agencies on the number of staff assigned to CFIUS more 

than 50 percent of their time.

To collect information on stakeholder views on potential changes to 

CFIUS, we conducted individual semi-structured interviews with selected 

stakeholders, which consisted of officials from the nine CFIUS voting 

member agencies, the two ex officio nonvoting member agencies, and 

three selected nonmember agencies that have CFIUS case-related 

expertise, as well as with external experts. To identify external experts, 

we asked stakeholders to recommend other stakeholders we should 

speak with (i.e., snowball sampling). From our list of potential 

stakeholders, we selected 16 external experts, including former 

government officials, lawyers who represent parties with transactions 

notified to CFIUS, and representatives from industry associations and 

think tanks. In our interviews, we collected views and information on the 

challenges that CFIUS faces, options for addressing the challenges, and 

the possible benefits and drawbacks of these options. The information 

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 38 GAO-18-249 Foreign Investment

obtained from these stakeholders cannot be generalized across all 

stakeholders; however, these stakeholders provided insights into the 

possible effects of implementing certain changes to CFIUS.

We conducted this performance audit from December 2016 to February 

2018 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.
Appendix II: Characteristics of Transactions 

Reviewed by the Committee on Foreign 

Investment in the United States (CFIUS)

Page 39 GAO-18-249 Foreign Investment

CFIUS reviews covered transactions from a large variety of industries, but 

the largest number of transactions reviewed come from the manufacturing 

sector. In 2016, the manufacturing sector represented approximately 42 

percent of the 172 covered transactions reviewed by CFIUS and, in 

recent years, the number of transactions reviewed from that sector has 

increased from 49 transactions in 2011 to approximately 72 transactions 

in 2016.1 Computer and electronic transactions, such as those by 

companies that produce semiconductor technology, accounted for 

approximately 32 of the 72 covered transactions from the manufacturing 

sector that CFIUS reviewed in 2016. For instance, in 2016, CFIUS 

reviewed the potential acquisition of Aixtron, a Germany-based 

semiconductor firm with assets in the United States, by the Chinese firm 

Fujian Grand Chip Investment Fund. That year, the President chose to 

prohibit the acquisition of the U.S. business of Aixtron upon determining 

that the foreign purchasers might take action that threatens to impair the 

national security of the United States in exercising control of the U.S. 

business of Aixtron.2 Treasury, as the chair of CFIUS, stated in a press 

release that the national security risks posed by the transaction related to, 

among other things, a Chinese firm obtaining the company’s body of 

knowledge and experience.

Transactions from the manufacturing sector involve a variety of other 

industries, including textiles, chemicals, and food manufacturing. For 

example, in 2013, according to a report from the U.S.-China Economic 

and Security Review Commission, CFIUS reviewed the acquisition of 

Smithfield Foods Inc., for $7.1 billion, by China’s Shuanghui International 

Holdings Ltd. A letter submitted by members of the Senate Agriculture 

Committee raised concerns that the transaction posed a threat to the 

nation’s food security; however, according to Security and Exchange 

Commission filings, CFIUS ultimately completed its investigation and 

cleared the transaction to proceed.

Acquisitions by Chinese-owned companies accounted for the largest 

number of covered transactions reviewed by CFIUS from 2014 through 

2016. According to CFIUS, the number of covered transactions the 

committee reviewed from China has increased substantially in recent 

 1

As of January 2018, data provided by Treasury had not been finalized, as CFIUS was still 

developing the 2016 annual report.

2

Executive Order Regarding the Proposed Acquisition of a Controlling Interest in Aixtron 

SE by Grand Chip Investment GmbH, 81 Fed. Reg. 88,607 (Dec. 7, 2016).

Appendix II: Characteristics of Transactions 

Reviewed by the Committee on Foreign 

Investment in the United States (CFIUS)
Appendix II: Characteristics of Transactions 

Reviewed by the Committee on Foreign 

Investment in the United States (CFIUS)

Page 40 GAO-18-249 Foreign Investment

years, from 10 transactions in 2011 to 67 in 2016. In previous years, 

companies from the United Kingdom were party to the largest share of 

covered transactions submitted for CFIUS review; however, from 2013 

through 2015, parties from the United Kingdom and Canada submitted 

the second and third largest number of notices. Forty-four percent of all 

covered transactions reviewed by the committee during this time period 

involved companies from China, the United Kingdom, or Canada.3

 3

For more information on transactions reviewed by CFIUS, see Committee on Foreign 

Investment in the United States, Annual Report to Congress (2015), and Congressional 

Research Service, The Committee on Foreign Investment in the United States (Oct. 11, 

2017).
Appendix III: Factors to Determine Whether 

Submitted Transactions Pose a National 

Security Risk

Page 41 GAO-18-249 Foreign Investment

Table 12: Treasury List of Illustrative Factors the Committee on Foreign Investment 

in the United States and the President Should Consider in Determining Whether a 

Transaction Notified to the Committee Poses a National Security Risk

• The potential effects of the transaction on the domestic production needed for 

projected national defense requirements.

• The potential effects of the transaction on the capability and capacity of domestic 

industries to meet national defense requirements, including the availability of human 

resources, products, technology, materials, and other supplies.

• The potential effects of a foreign person’s control of domestic industries and 

commercial activity on the capability and capacity of the United States to meet the 

requirements of national security.

• The potential effects of the transaction on U.S. international technological leadership 

in areas affecting U.S. national security.

• The potential national security-related effects on U.S. critical technologies.

• The potential effects on the long-term projection of U.S. requirements for sources of 

energy and other critical resources and material.

• The potential national security-related effects of the transaction on U.S. critical 

infrastructure, including critical physical infrastructure such as major energy assets.

• The potential effects of the transaction on the sales of military goods, equipment, or 

technology to countries that present concerns related to terrorism; missile 

proliferation; chemical, biological, or nuclear weapons proliferation; or regional 

military threats.

• The potential that the transaction presents for transshipment or diversion of 

technologies with military applications, including the relevant country’s export control 

system.

• Whether the transaction could result in the control of a U.S. business by a foreign 

government or by an entity controlled by or acting on behalf of a foreign 

government.

• The relevant foreign country’s record of adherence to nonproliferation control 

regimes and record of cooperating with U.S. counterterrorism efforts.

• Other factors that the President or the committee may determine to be appropriate, 

generally or in connection with a specific review or investigation.

Source: Department of the Treasury: Office of Investment Security Guidance Concerning the National Security Review Conducted by 

the Committee on Foreign Investment in the United States,73 Fed. Reg. 74,567 (Dec. 8, 2008) (detailing the illustrative list of factors in 

section 721(f) of the Defense Production Act of 1950, as amended). | GAO-18-249

Appendix III: Factors to Determine Whether 

Submitted Transactions Pose a National 

Security Risk
Appendix IV: Reported Number of Agency Staff 

Assigned to Committee Activities

Page 42 GAO-18-249 Foreign Investment

Table 13: Reported Number of Member Agency Staff Assigned to Committee on 

Foreign Investment in the United States (CFIUS) Activities in Fiscal Year 2016

Agency Reported Number of Agency Staff 

Assigned to CFIUS Activities

Department of Justice 23

Department of the Treasury (Chair) 18

Department of Defense 15

Department of Homeland Security 11 

Department of Commerce 11

Department of Energy 4

Department of State 4

Office of Science and Technology Policy 4

Office of the United States Trade 

Representative

1

Source: GAO presentation of information reported by agencies. | GAO-18-249

Note: These figures represent the number of employees that, according to agency officials, are 

assigned to CFIUS activities at least 50 percent of the time. The agencies provided the number of 

staff assigned for fiscal year 2016.

Appendix IV: Reported Number of Agency 

Staff Assigned to Committee Activities
Appendix V: Comments from the Department 

of the Treasury

Page 43 GAO-18-249 Foreign Investment

Appendix V: Comments from the Department 

of the Treasury
Appendix VI: Comments from the Department 

of Agriculture

Page 44 GAO-18-249 Foreign Investment

Appendix VI: Comments from the

Department of Agriculture
Appendix VII: GAO Contacts and Staff 

Acknowledgments

Page 45 GAO-18-249 Foreign Investment

Kimberly M. Gianopoulos, (202) 512-8612 or gianopoulosk@gao.gov. 

Marie A. Mak, (202) 512-4841 or makm@gao.gov.

In addition to the contacts named above, Christine Broderick (Assistant 

Director), Christina Werth (Analyst-in-Charge), Anthony Costulas, Scott 

Purdy, Kendal Robinson, Lynn Cothern, Grace Lui, Justin Fisher, and Neil 

Doherty contributed to this report.

Appendix VII: GAO Contacts and Staff 

Acknowledgments

GAO Contacts

Staff 

Acknowledgments

(101285)
The Government Accountability Office, the audit, evaluation, and investigative 

arm of Congress, exists to support Congress in meeting its constitutional 

responsibilities and to help improve the performance and accountability of the 

federal government for the American people. GAO examines the use of public 

funds; evaluates federal programs and policies; and provides analyses, 

recommendations, and other assistance to help Congress make informed 

oversight, policy, and funding decisions. GAO’s commitment to good government 

is reflected in its core values of accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no cost is 

through GAO’s website (http://www.gao.gov). Each weekday afternoon, GAO 

posts on its website newly released reports, testimony, and correspondence. To 

have GAO e-mail you a list of newly posted products, go to http://www.gao.gov

and select “E-mail Updates.”

The price of each GAO publication reflects GAO’s actual cost of production and 

distribution and depends on the number of pages in the publication and whether 

the publication is printed in color or black and white. Pricing and ordering 

information is posted on GAO’s website, http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537.

Orders may be paid for using American Express, Discover Card, MasterCard, 

Visa, check, or money order. Call for additional information.

Connect with GAO on Facebook, Flickr, Twitter, and YouTube.

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts.

Visit GAO on the web at www.gao.gov.

Contact:

Website: http://www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Orice Williams Brown, Managing Director, WilliamsO@gao.gov, (202) 512-4400, 

U.S. Government Accountability Office, 441 G Street NW, Room 7125, 

Washington, DC 20548

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548

James-Christian Blockwood, Managing Director, spel@gao.gov, (202) 512-4707

U.S. Government Accountability Office, 441 G Street NW, Room 7814, 

Washington, DC 20548

GAO’s Mission

Obtaining Copies of 

GAO Reports and 

Testimony

Order by Phone

Connect with GAO

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Congressional 

Relations

Public Affairs

Strategic Planning and 

External Liaison

Please Print on Recycled Paper.