Cfius subject to new due process requirements

Author: | Published: 29 Jul 2014

A recent court ruling could improve foreign companies' procedural rights in having deals approved by the opaque regulator

A DC Circuit Court ruling on the matter dated July 15 could represent a small victory for the due process rights afforded to foreign investors in the national security review of their inbound acquisitions by the Committee on Foreign Investment in the United States (Cfius).

When the President prohibited Chinese-owned Ralls' acquisition of US wind farms in 2012, on the recommendation of Cfius, few thought the resulting order was subject to challenge. This is because section 721 of the Defense Production Act (DPA) provides that presidential action is not subject to judicial review.

However, the recent Circuit Court ruling may change this. In the Ralls ruling from earlier this month, the court held that due process requires the government to: provide notice of the Cfius action to the foreign company; disclose any...