The views expressed by contributors are their own and not the view of The Hill

Committee on foreign investment in need of serious reform

Greg Nash

It’s budget time. And it looks like CFIUS will be getting plenty of funding in 2018.

The job of the Committee on Foreign Investment in the U.S. (CFIUS) is to review foreign investments in the U.S. for national security concerns. It’s Congress’s job to make sure the agencies that make up the committee have the resources they need to maintain the U.S. as the leading destination for foreign investment.

{mosads}From the four congressional hearings that’ve been held over the past several months on CFIUS reform, the leading recommendation for Congress has to be a resounding demand to better fund the committee. Foreign transactions have not only increased in number but have become more complicated to monitor, putting a strain on the committee’s stovepipe and constrained budget.


The Trump administration released its budget proposal for fiscal year 2019. It prioritizes the efforts of CFIUS. And as chair of the committee, the Treasury Department is tasked with making sure CFIUS can, “address current and future national security risks.”

Although the FY2019 budget for the Office of International Affairs (OIA), where CFIUS is coordinated within the Treasury, will likely decrease 9 percent from last year’s budget to $54.5 million, several specific line items will add up to increased funding for the CFIUS process.

That’s where the budget request for Treasury’s Office of Terrorism and Financial Intelligence (OTFI) comes in with an explicit request for $859,000 for this year’s CFIUS commitments. The request noted additional resources were need for OTFI to meet the increase in CFIUS work.

A similar request was made by the Department of Commerce’s to increase the budget for foreign investment reviews within its Bureau of Industry and Security by $640,000 — though it’s Commerce’s International Trade Administration (ITA) that coordinates their CFIUS efforts, whose budget similar to Treasury’s OIA,  will decrease by about 8 percent.

President Trump upheld in his National Security Strategy his administration’s plans to keep the U.S. as “investor-friendly.” For years, the cost to companies looking to invest in the U.S. is increasing because of the CFIUS process and its uncertainty of approval time. Increasing CFIUS’s budget is certainly a great way to keep the U.S. investor-friendly. 

Even the Department of Defense is making efforts to increase funds for the committee given years of moderate growth. For FY2018, DoD budget request for CFIUS was $3.2 million. DoD has averaged a 5 percent annual increase in CFIUS budget request over the last 5 years and FY2018 is no different. However, the FY2019 budget estimates an increase of over 700 percent to $23 million.

The committee needs other reforms since its last update in 2007.

Reforms to the committee will need to weigh the cost of including newer things for the committee to review — such as greenfield investments or construction — and whether the agencies are getting the appropriate amount of funds to fairly vet transactions to keep America investment friendly.

Other than funding, the committee should maintain its focus on national security. Economic and food security are not appropriate topics for CFIUS reviews. Recommendations to include them are usually coupled with bad industrial policies. If all the food in the U.S. were to disappear tomorrow, that would be a national security concern. But that’s about as likely as the stopping of buying and selling of goods and services. Not going to happen.

The Foreign Investment Risk Review Modernization Act is currently the most widely supported piece of legislation that would reform CFIUS. And within the heart of the bill are policy changes for how the committee is funded. Some of these changes are good, some bad.

It’ll be a while before we know whether this round of funding increase for CFIUS is enough to meet the increased demand of investment. Better statistics on CFIUS’s review metrics would help defend any arguments for increasing the CFIUS budget.

For now, agencies and the administration are moving in the right direction by making sure this little-known, yet important, committee is getting the increase in funds it needs.

Riley Walters is a policy analyst in the Asian Studies Center at The Heritage Foundation.

Tags CFIUS Committee on Foreign Investment in the United States Donald Trump

Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

More Finance News

See All
See all Hill.TV See all Video

Most Popular

Load more


See all Video