Proposed Increase in Fines for Misstatements to CFIUS
Biden Administration Proposes Higher Fines for Misstatements
The Biden administration is suggesting a significant raise in the maximum fine to $5 million for making misstatements to CFIUS, the committee overseeing foreign investments in the U.S. for national security risks. Currently, the penalty cap for this violation is set at $250,000.
New Penalty Ceiling Announcement
The Treasury Department, responsible for CFIUS, has announced plans to boost the upper limit of fines in a recent press release. While the exact new maximum was not disclosed in the release, Axios was the first to report the increase in dollar amount.
Focus on Enforcement and Compliance
CFIUS requires many foreign investors in U.S. companies to agree to “mitigation agreements” to address national security concerns. The committee is now emphasizing enforcement, with recent penalties of $1 million in 2018 and $750,000 in 2019, marking its first publicly announced fines.
Expanded Subpoena Powers
If approved, the updated rules would grant CFIUS the authority to issue subpoenas to a broader range of entities, including third parties not directly involved in CFIUS-reviewed transactions.
Continual Improvement in Oversight
The proposed changes aim to enhance oversight of foreign investments in the U.S., especially concerning national security implications. By increasing fines and expanding subpoena powers, CFIUS is strengthening its ability to monitor and enforce compliance with mitigation agreements.
