June 24, 2021
CFIUS: Treasury Team Hunts For Non-Notified Transactions
According to this Winston & Strawn memo, the Treasury Department is building a team of sleuths dedicated to seeking out “non-notified” transactions that might be of interest to CFIUS. Companies involved in transactions that the team identifies may find themselves on the receiving end of a request from CFIUS to make a filing so that it can review the potential national security implications. Here’s an excerpt discussing how the team identifies non-notified transactions:
Treasury’s non-notified team identifies non-notified transactions in three ways. First, the team conducts market monitoring. Every business day, Treasury case officers scour press releases, bankruptcy filings, and multiple commercial databases, searching for transactions that were not filed with the Committee and may have national security consequences.
CFIUS has jurisdiction over all types of corporate transactions, including mergers and acquisitions involving public and private companies, joint ventures, corporate restructurings, bankruptcies, real estate deals, and early-stage investments in startup companies. The non-notified team has access to information and databases covering all of these types of corporate transactions, and the team conducts near-constant surveillance of the market for transactions that may fall within CFIUS’s jurisdiction.
Second, the non-notified team receives referrals from other government agencies and offices. The national security agencies—DOJ, DOE, DHS, and DOD—are probably most active in looking for non-notified transactions, but Treasury also accepts referrals from other government agencies and offices.
Third, the non-notified team reviews public tips. Members of the public are encouraged to provide tips, referrals, or other relevant information by emailing the non-notified team at CFIUS.tips@treasury.gov.
Given the resources being devoted to identifying non-notified transactions, the memo says that for parties engaging in a covered transaction that may raise national security concerns, the smart play is to make a filing. Treasury’s efforts virtually guarantee that you’ll be found and it’s much better to go through the CFIUS review process before rather than after you close.
– John Jenkins