President Biden signs executive order directing Cfius to focus on specific national security risks – terrorism, homeland security and defense

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On September 15, 2022, U.S. President Joe Biden signed an Executive Order (EO) to strengthen federal review of foreign investments in U.S. businesses deemed essential to U.S. national security interests.1 For the first time since the Committee on Foreign Investment in the United States (CFIUS) began reviewing foreign acquisitions of U.S. companies in 1988, under its authority to review and block such transactions if they threaten to harm National Security of the United States, the President provided guidance on a number of risk areas that CFIUS should consider when reviewing transactions within its jurisdiction (covered transactions).2


Specifically, recognizing that some countries use foreign investment to gain access to sensitive data and technology for purposes detrimental to U.S. national security, EO directs CFIUS to consider impact of transactions covered on the following:

  • Critical U.S. Supply Chains May Have National Security Implications: The EO directs the CFIUS to examine the effect of a covered transaction on the resilience and security of the supply chain, both inside and outside the defense industrial base. In its assessment, CFIUS must consider the degree of diversification through alternative suppliers throughout the supply chain, supply relationships with the U.S. government, and concentration of ownership or control by the foreign person in each supply chain.

  • U.S. Technologies in Areas Affecting National Security: EO specifically identifies sectors that are fundamental to American technology leadership and therefore national security, including (but not limited to) microelectronics, artificial intelligence, biotechnology and biomanufacturing, quantum computing , advanced clean energy, climate adaptation technologies and agriculture industry elements. basis that have implications for food security. The OE asks the CFIUS to consider whether a covered transaction involves manufacturing capabilities, services, critical mineral resources or technologies in these areas.

  • Overall Investment Trends: The EO directs the CFIUS to review prior investments by foreign persons in a single industry or related technologies.

  • Cybersecurity risks that threaten to harm national security: This directive demonstrates the Biden administration’s concern for future malicious activity on the Internet. OE directs CFIUS to consider whether a covered transaction may provide outside persons, or their connections to relevant third parties, access to systems or technology that would allow them to conduct malicious cyber intrusions or other malicious cyber activities.

  • Sensitive personal data of US citizens: EO directs CFIUS to review whether a covered transaction involves a US company with access to sensitive data of US persons and whether the foreign investor or its related parties sought or could exploit such information.

EO relies on existing statutory and regulatory factors3 ; it highlights some acute concerns in the current environment, but it does not change CFIUS’ current jurisdiction or how it conducts its investigations.4 However, it can be expected that the five areas highlighted by the OE will be subject to even greater scrutiny as part of the CFIUS review process. Accordingly, parties to transactions involving any of these five areas should take them into account in their analysis of whether to notify a transaction to CFIUS and how they might respond to any concerns that CFIUS might raise in the process. part of the review process.


1. Executive Order on Ensuring Rigorous Review of Evolving National Security Risks by the Committee on Foreign Investment in the United States, (September 15, 2022) available on committee-on-foreign-investment-in-the-united-states/.

2. The Committee on Foreign Investments (CFIUS) was created by executive order in 1975. In 1988, however, Congress passed the Exon-Florio Amendment, which authorized CFIUS to block foreign investments if they threatened national security .
See BACKGROUNDER: President Biden signs executive order to ensure thorough reviews of evolving national security risks by the Committee on Foreign Investment in the United States(September 15, 2022) available on national-security-risks-by-the-committee-on-foreign-investments-in-the-united-states/;
see also 50 USC App 2170.

3. See in general 50 United States Code § 4565(f); 31 CFR Parts 800 and 802.

4. Call for the Press in President Biden’s Executive Order on Inbound Foreign Investment Screening(September 15, 2022) available on

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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