The Exxon-Florio Amendment to the 1988 Omnibus Trade and Competitiveness Act, 50 U.S.C. § 2170, permits the President of the United States to halt or reverse the acquisition of a U.S. business by a foreign firm if he believes it would harm national security in a manner not adequately addressed by other federal laws. The White House, in turn, has delegated to the Interagency Committee on Foreign Investment in the United States (CFIUS), the authority to determine when a proposed transaction warrants review, to conduct investigations, and to submit recommendations to approve, limit, or halt transactions.
Facts likely to cause a transaction to be subject to Exxon-Florio review would be a target company’s contracts with the U.S. military or intelligence agencies, any manufacture of components of weapon systems, the supply of secure communications facilities to the United States or allies or ownership of the acquirer by a foreign government. Once CFIUS has received a complete notification, either from the parties or U.S. government agencies, it reviews the transaction. An investigation, if necessary, must begin no later than thirty days after receipt of a notice and is required to end within forty-five days. The CFIUS process is widely regarded as highly politicized, with intense lobbying of Congress and the White House common in transactions exposed to the process.