Overview
CFIUS has broad enforcement authorities to address violations of section 721 of the Defense Production Act, CFIUS regulations, and mitigation agreements.
The November 2024 Final Rule amended provisions pertaining to penalties, negotiation of mitigation agreements, and other enforcement procedures.
Types of Violations
Failure to File
Parties who fail to submit a mandatory declaration or notice may be subject to civil monetary penalties. The penalty may be up to the value of the transaction.
Material Misstatement or Omission
Making a material misstatement or omitting material information in a declaration, notice, or other filing with CFIUS may result in penalties and other enforcement actions.
Mitigation Agreement Non-Compliance
Failure to comply with the terms of a mitigation agreement, condition, or order may result in civil monetary penalties or other remedies, including requiring the unwinding of a transaction.
Violation of Order
Violation of an order issued by CFIUS or the President may result in civil monetary penalties and other enforcement actions.
Penalties
Civil monetary penalties for CFIUS violations may be significant:
- Failure to file mandatory declaration: Up to $250,000 per violation or the value of the transaction, whichever is greater.
- Material misstatement/omission: Up to $250,000 per violation.
- Violation of mitigation agreement: Up to $250,000 per violation or the value of the transaction, whichever is greater.
- Violation of order: Up to $250,000 per violation.
Each day of a continuing violation may constitute a separate violation.
Compliance and Monitoring
CFIUS actively monitors compliance with mitigation agreements through various mechanisms:
- Regular reporting requirements.
- Third-party audits and compliance monitors.
- Site visits and inspections.
- Review of corporate records and communications.
Parties subject to mitigation agreements are expected to establish robust compliance programs and promptly report any potential violations or compliance concerns to CFIUS.
Third-Party Compliance Providers
The Department of the Treasury meets with third-party compliance providers to discuss CFIUS mitigation requirements. These meetings help ensure that compliance monitors understand CFIUS expectations and can effectively support parties in meeting their obligations.
Third-party providers interested in discussing CFIUS mitigation may contact the Office of Investment Security at CFIUS@treasury.gov.
Report a Concern
Members of the public are encouraged to report potential national security concerns related to foreign investment in the United States, including potential violations of CFIUS regulations or mitigation agreements.