Treasury Eyes Enhancing Inbound, Outbound Investment Programs
The Treasury Department is exploring several ways to improve its screening of inbound and outbound investment, Deputy Treasury Secretary Michael Faulkender said April 24.
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To speed up reviews by the Committee on Foreign Investment in the U.S., Treasury is looking at how to collect information from foreign investors earlier in the process, and how to better educate them about the issues they are expected to consider, Faulkender said at the American Conference Institute’s National Conference on CFIUS, according to a copy of his prepared remarks.
“We are thinking about how we could work with transaction parties to build up a knowledge base that limits the amount of information that needs to be resubmitted with each new filing, which could be a particularly useful tool for repeat filers,” he said. “Additionally, we are looking at ways we can share more information with the public about the types of risks that arise in certain transactions, as well as best practices parties can use to limit these risks prior to CFIUS review.”
To reduce the use of “certain open-ended mitigation measures,” Treasury is considering “alternate approaches to address a particular risk,” Faulkender said. The department also wants CFIUS to provide more “general information about how national security risks can arise and be addressed preemptively, which may help parties be better prepared to consider mitigation measures in the deal-making process.”
To refine Treasury's new program restricting outbound investment in China, Treasury is evaluating “whether the program is appropriately scoped to be responsive to developments in technology and the strategies of countries of concern,” Faulkender said. “We are considering the feedback we have received over the first few months of the program’s operation and thinking about where adjustments might be made, including discussions with our partners in Congress to ensure any gaps in our authorities are addressed.”
Treasury is also taking steps to promote compliance with the program, including by ensuring the investment community is familiar with it. A Treasury rule that took effect in early January created new prohibitions and notification requirements to limit certain U.S. investment in China’s semiconductor, artificial intelligence and quantum sectors (see 2410280043).
Treasury's efforts on inbound and outbound investment are intended to implement a Feb. 21 memo outlining President Donald Trump’s “America-first investment policy," which calls for expanding inbound and outbound foreign investment restrictions, curbing the use of mitigation agreements, and fast-tracking investment deals from certain allies (see 2502240051). Faulkender, whose appointment by Trump received Senate approval in late March (see 2503270007), said at his confirmation hearing in early March that he wants to review the new restrictions on outbound investment (see 2503060069).