President Biden Signs Order Expanding CFIUS Reviews

President Joseph R. Biden signed an Executive Order ("EO") providing guidance to the Committee on Foreign Investment in the United States ("CFIUS") on maintaining a robust foreign investment review process to identify and address potential national security risks.

The EO elaborates on existing statutory factors and adds several national security factors for CFIUS to consider during its review process. The EO also instructs CFIUS to continually evaluate its review process and improve areas with deficiencies in order to ensure that it remains responsive to evolving national security threats. Specifically, the EO encourages CFIUS to consider, for any given transaction:

• the effect on supply chain resilience and security, both within and outside of the defense industrial base to ensure the U.S. is not vulnerable to future supply disruptions of critical goods and services;

• the effect on U.S. technological leadership in areas affecting national security, including microelectronics, artificial intelligence, biotechnology and biomanufacturing, quantum computing, advanced clean energy, climate adaptation technologies and elements of the agricultural industrial base that impact food security;

• industry investment trends that may impact U.S. national security, such as a foreign company or country making multiple acquisitions or investments in a single sector or in related sectors;

• cybersecurity risks that threaten to impair national security, including foreign persons with the capability to conduct cyber intrusions or other malicious cyber-enabled activity; and

• exploitation risks of U.S. persons' sensitive data that may be detrimental to national security.

In a statement on the EO, Secretary of the Treasury and Chair of CFIUS Janet L. Yellen said "strengthening our supply chains and protecting against foreign threats enhances our national security." She said the EO "reaffirms CFIUS's mission to protect America's technological leadership and the security of our citizens' sensitive data from emerging threats."