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    Content Assessment: A Specialized Type of Discovery? The Committee on Foreign Investment in the United States (CFIUS) and National Security

    Information - 90%
    Insight - 91%
    Relevance - 88%
    Objectivity - 92%
    Authority - 93%



    A short percentage-based assessment of the qualitative benefit of the post highlighting the Committee on Foreign Investment in the United States (CFIUS) annual report to Congress for calendar year 2021.

    Editor’s Note: From time to time, ComplexDiscovery highlights publicly available or privately purchasable announcements, content updates, and research from cyber, data, and legal discovery providers, research organizations, and ComplexDiscovery community members. While ComplexDiscovery regularly highlights this information, it does not assume any responsibility for content assertions.

    To submit recommendations for consideration and inclusion in ComplexDiscovery’s cyber, data, and legal discovery-centric service, product, or research announcements, contact us today.

    Background Note: From audits and investigations to cyber and legal discovery, there are many areas of focus for the tools, techniques, and tactics used regularly by eDiscovery experts and providers in the conduct of their professional duties. One specialized area of focus is supporting reviews and investigations based on requirements from the Committee on Foreign Investment in the United States (CFIUS). The following CFIUS overview extract and complete annual report may be beneficial for cybersecurity, information governance, and legal discovery professionals seeking to better understand the objective, reasoning, and requirements for the specialized task of advising and supporting CFIUS reviews and investigations.

    Public Version of the Annual Report*

    The Committee on Foreign Investment in the United States – Annual Report to Congress

    Report Period: CY 2021

    The Committee on Foreign Investment in the United States (CFIUS or the Committee) is an interagency body of the U.S. Government that is authorized by law to review and address national security risks arising from certain transactions involving foreign investment in the United States. The review is solely to determine the effect of the transaction on the national security of the United States.

    CFIUS member agencies include the Departments of the Treasury (chair), State, Defense, Justice, Commerce, Energy, and Homeland Security; the Office of the United States Trade Representative; and the Office of Science and Technology Policy within the Executive Office of the President. The Office of the Director of National Intelligence and the Department of Labor are ex-officio members, and five White House offices are observers. As needed to assess the national security effects of a transaction, CFIUS involves other federal government agencies in its reviews, such as the Departments of Transportation, Health and Human Services, and Agriculture.

    CFIUS operates pursuant to section 721 of the Defense Production Act of 1950, as amended (Section 721), and as implemented by Executive Order 11858, as amended, and the regulations at chapter VIII of title 31 of the Code of Federal Regulations (C.F.R.).

    On August 13, 2018, the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) was enacted, which, among other things, amended Section 721. FIRRMA strengthened and modernized CFIUS to enhance its ability to address national security concerns, including by broadening the authorities of the President and CFIUS to review and take action to address any national security concerns arising from certain non-controlling investments and real estate transactions involving foreign persons. FIRRMA also made various changes to the CFIUS review process. Certain of the changes took effect immediately upon enactment, while other changes took effect after enactment—most notably, in 2020 through the final regulations implementing many of the provisions in FIRRMA.

    With the exception of certain transactions that are subject to the mandatory filing requirement authorized under FIRRMA, parties voluntarily submit declarations or notices of transactions to CFIUS. CFIUS also has had, and continues to have, the authority to review pending or completed transactions even absent a voluntary filing by the parties if a member of the Committee has reason to believe that the transaction is subject to CFIUS jurisdiction and may raise national security concerns.

    CFIUS is required to complete a “review” of a notified transaction within 45 days. CFIUS may initiate an “investigation” that could last up to 45 additional days if CFIUS determines that it needs additional time to complete its assessment following the conclusion of the “review” period.

    Instead of a voluntary notice, parties may alternatively submit a declaration: an abbreviated notification to which the Committee must respond within a 30-day assessment period. After assessing a submitted declaration, CFIUS is authorized to (1) request that parties file a written notice; (2) inform the parties that the Committee is unable to conclude action with respect to the transaction on the basis of the declaration and that the parties may file a written notice; (3) initiate a unilateral review; or (4) notify the parties that the Committee has concluded all action under Section 721.

    CFIUS will conclude all action with respect to a transaction if it determines that the transaction does not pose any unresolved national security concerns, that any national security concerns are adequately addressed by laws other than Section 721 and the International Emergency Economic Powers Act (IEEPA), or that mitigation measures agreed to or imposed by CFIUS address any unresolved national security concerns. If CFIUS determines that the transaction poses unresolved national security concerns, it will refer the transaction to the President unless the parties choose to abandon the transaction. The President may suspend or prohibit the transaction, including by requiring divestment. By law, the President has to make a decision no later than 15 days after the completion of CFIUS’s investigation or the date on which CFIUS otherwise referred the transaction to the President. The President must publicly announce such a decision.

    CFIUS will seek mitigation measures or refer a transaction to the President only after such action is justified in a detailed written analysis of the national security risk posed by the transaction. CFIUS determinations are confirmed at senior levels by CFIUS member agencies.

    With limited exceptions, any transaction submitted to CFIUS for review that CFIUS determines is subject to its jurisdiction—i.e., a “covered transaction” or equivalent under the regulations at chapter VIII of title 31 of the C.F.R.—and for which it concludes all action receives a “safe harbor.” This means that CFIUS and the President will not subject the transaction to review again, absent certain exceptional circumstances (e.g., discovery of a material misstatement).

    By law, CFIUS treats as confidential information provided to CFIUS by parties to a transaction. Additionally, CFIUS does not reveal the fact that parties have submitted a transaction for review.

    This CFIUS annual report (Annual Report or Report) covers transactions filed with CFIUS in calendar year 2021. Because the regulations implementing FIRRMA became fully effective in February 2020, this Annual Report for CY 2021 represents the first full calendar year in which the Committee operated pursuant to all of the new requirements and processes implemented under FIRRMA.

    Read more on CFIUS.

    Read the Complete CY21 Financial Results Investor Presentation (PDF) – Mouseover to Scroll

    CFIUS Public Annual Report to Congress CY 2021

    Read the original report.

    *Shared with permission.


    Additional Reading

    Source: ComplexDiscovery


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