The Treasury Department has expanded CFIUS powers to better effectively assess and address foreign investments with a potential impact on national security.
The Department of the Treasury has issued new rules expanding the enforcement powers of the Committee of Foreign Investment in the United States (CFIUS), strengthening the government’s ability to scrutinize foreign investments that may pose national security risks, such as those involving adversarial nations like China.
The updates reflect a growing focus on protecting critical U.S. infrastructure, technology, and sensitive domestic real estate near military installations.
The new rules,
announced on Nov. 18, strengthen CFIUS’s authority by expanding information requests, increasing penalties for violations, broadening subpoena powers, and streamlining the review and enforcement process to better address national security risks. The
final rule, which was initially proposed and opened for public comment in April, takes effect 30 days after publication in the Federal Register.
The United States is the world’s top destination for foreign direct investment. It’s the role of CFIUS to review some of these transactions to determine their impact on U.S. national security.
Paul Rosen, assistant secretary of the Treasury for investment security, said that the new rules aim to empower CFIUS to ensure that those seeking to exploit America’s open investment environment for malicious purposes are met with rigorous oversight and can be deterred by tougher
penalties.
“This rule enhances CFIUS’s ability to vigorously defend the national security of the United States by ensuring our investment screening regime has a sharper scalpel to more quickly and effectively address national security risks that arise in CFIUS reviews,” Rosen said in a statement.
The final rule bolsters CFIUS’s ability to address national security risks by expanding the types of information it can request from transaction parties, including for non-notified deals. It introduces stricter timelines for responding to risk-mitigation proposals and significantly increases the maximum penalties for violations of agreements or regulatory obligations. Also, the rule broadens CFIUS’s subpoena authority, allowing it to investigate more transactions thoroughly, and extending the time frames for parties to petition penalty reconsiderations and for CFIUS to respond.
The move follows other recent actions related to
concerns about foreign investment potentially compromising U.S. national security. Early in November, the Treasury Department, for example,
issued a rule that expanded CFIUS’s jurisdiction over real estate transactions near dozens of sensitive military sites following a land-buying spree by Chinese nationals. The rule, set to go into effect on Dec. 9, extends CFIUS oversight to land purchases within a one-mile radius of 40 additional sites, a 100-mile radius of 19 additional sites, and between one and 100 miles of eight existing sites.
Fort Liberty in North Carolina, the largest U.S. military base by number of personnel, and home to the elite 82nd Airborne Division and U.S. Army Special Operations Command, has become a focal point for national security concerns related to foreign land buys. Reports reveal that Chinese-owned farmland surrounds the base within a 30-mile radius, with critics
saying this land could be leveraged for espionage, including reconnaissance, the installation of tracking technology, and drone surveillance.
Concerns over foreign espionage—or even outright attacks on the homeland—have grown after Chinese nationals, and others from adversarial nations, were caught trying to access military bases. Rep. Pat Fallon (R-Texas), who sits on the Subcommittee on National Security, the Border and Foreign Affairs, told The Epoch Times in a
recent interview that dozens of incidents have come to light of Chinese nationals, claiming to be tourists, taking photographs near military installations and critical infrastructure such as reservoirs, even when the facilities are in remote, rural locations that tourists don’t typically visit.
In October 2024, federal prosecutors charged five Chinese nationals, accusing them of lying and trying to conceal their actions after they were spotted near a remote Michigan military site where thousands of troops were taking part in drills. Three Chinese nationals were
sentenced to prison terms in 2020 for trespassing and taking photos of a U.S. Navy base in Florida, and in July 2024, a Chinese student
pleaded guilty to two misdemeanors under the Espionage Act for using a drone to take photos of naval shipyards in Virginia.
During a Nov. 19
speech at a CFIUS conference in Washington, Rosen said that, over the past year, CFIUS has ramped up the imposition of civil monetary penalties on foreign entities seeking to invest in the United States, while also bolstering the agency’s operational capabilities through a series of “sophisticated tools, platforms, and methodologies” for evaluating and addressing risks to national security.
