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US reviews record number of foreign investment transactions in 2022

US reviews record number of foreign investment transactions in 2022
Stacks of uncut sheets of $1 notes sit in a machine at the US Bureau of Engraving and Printing in Washington, DC, on Wednesday, 15 November 2017. (Photo: Andrew Harrer/Bloomberg)

A US government committee on foreign investments reviewed a record number of proposed transactions in 2022, the Treasury Department said on Monday.

The Committee on Foreign Investment in the United States (CFIUS) said in its annual report it had reviewed 286 “covered notices” for transaction approvals last year, up from a record 272 in 2021 and 187 in 2019, the report showed, with about 80% of the cases involving finance, information and services and manufacturing.

Chinese investors filed 36 so-called “covered notices” seeking green lights for deals in 2022, compared with 44 in 2021 and 17 in 2020.

The committee said “transactions reviewed … including the technology being invested in, are increasingly complex and result in more national security agreements to resolve the risks identified”.

Most foreigners seeking to take even non-controlling stakes in U.S. companies must seek approval from CFIUS, a powerful Treasury-led committee that reviews transactions for national security concerns and can block them.

CFIUS opened 162 investigations in 2022, compared with 130 in 2021. The report said 88 transaction notices were withdrawn, with 68 refiled with changes aimed at mitigating concerns.

In September 2022, U.S. President Joe Biden told CFIUS to sharpen its focus on threats to sensitive data, cyber security and areas such as microelectronics and artificial intelligence, and to more closely vet transactions that could affect U.S. leadership in biotechnology and quantum computing.

The committee, whose powers were dramatically expanded under a 2018 law, was used by former president Donald Trump to upend many Chinese investments in the United States.

Before the 2018 law known as FIRRMA required filings and reviews for more types of transactions, including minority stake purchases by foreigners, China accounted for most investments in American critical technology in 2016-2017, accounting for more than a fifth of the total. DM

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