CFIUS filings for US in-bound acquisitions will be more expensive in the future.

The US Treasury proposed collecting fees of up to $300,000 on future filings in March.

The United States has an inter-agency committee of 16 federal agencies that reviews foreign acquisitions of US businesses for possible national security implications. Few transactions are blocked altogether, but the committee not infrequently requires changes in business terms and, in five cases, US presidents have blocked sales.

Filings with CFIUS — the Committee on Foreign Investment in the United States — used to be purely voluntary. The risk of not filing is the US can take action after learning of the transaction later. However, some filings have now become mandatory as of February 13, 2020.

Filings are mandatory in two situations. One is where a foreign government acquires a substantial interest in a US business that handles critical technologies, critical infrastructure or sensitive data. The other is when foreigners acquire interests in US businesses that make critical technologies for any one of 27 specific industries.

Filings can be made by short-form declaration that requires less information and has a shorter review period than a full filing. However, after reviewing a short-form declaration, CFIUS may ask for a full filing.

Full filings are a significant undertaking. (For the most recent data on filings, see “CFIUS Data” in the December 2019 NewsWire. For more information about when filings are mandatory, see “Expanded Reviews of US Inbound Investments” in the February 2020 NewsWire.)

The fees will apply to full voluntary filings and range from $0, for transactions where the total consideration paid by the foreign person is under $500,000, up to $300,000 for a filing in a transaction of $750 million or more.

The fee is $7,500 for a transaction that is at least $5 million, but less than $50 million. It is $75,000 for a transaction of $50 million and less than $250 million.

The fees will not apply to short-form declarations, mandatory filings and unilateral reviews initiated by CFIUS. However, they will apply if the transaction is first reported to CFIUS in a short-form declaration, but the committee requests a full filing.

Most foreign buyers bidding to acquire US assets feel disadvantaged if they have to make a CFIUS filing to close a sale for fear that sellers will not accept the contingency. The fees will increase the pressure on counsel to advise that a filing is not necessary.