CFIUS and America First: Faulkender Speech

Deputy Secretary of the Treasury Michael Faulkender emphasized the Trump Administration’s commitment to balancing foreign investment with national security at the American Conference Institute’s CFIUS Conference Thursday April 24, , detailing the Administration’s initiatives under the newly issued “America First Investment Policy.”

Reflecting on his long experience with the Committee on Foreign Investment in the United States (CFIUS), Faulkender called it “critical” to safeguarding the U.S. economy while preserving its openness to investment. “One of the guiding principles that has been true throughout the Committee’s history is that CFIUS is committed to protecting national security while preserving the longstanding open investment policy of the United States,” he said.

Marking the 50th anniversary of CFIUS’s founding, Faulkender described how foreign investment and security risks have evolved since 1975. “Foreign direct investment into the United States has increased, our economy is more connected to countries around the world, transaction structures are more complicated, businesses collect more data, and the private sector is leading a lot of technology development,” he noted.

FIRRMA a Boost

Faulkender credited the 2018 enactment of the Foreign Investment Risk Review Modernization Act (FIRRMA) for strengthening the Committee’s capabilities, stating, “Thanks to FIRRMA, the Committee was able to enhance its workforce and capabilities across the board, allowing it to better carry out its mission.”

Faulkender outlined priorities under the “America First Investment Policy” issued on February 21. “We want to continue to grow foreign investment into the United States,” he said, “while enhancing our ability to protect the United States from new and evolving threats that can accompany foreign investment.”

"Fast Track"

Faulkender announced efforts to streamline CFIUS procedures to encourage investment from U.S. allies and partners. “One line of effort is focused on the ‘fast-track’ process that the Policy instructs CFIUS to establish,” he said, emphasizing an early-stage collection of information and better public communication on risks and best practices.

He stressed, however, that security would not be compromised. “While we will facilitate beneficial investment, we will make sure that these process efficiencies do not diminish CFIUS’ ability to identify and address national security risks arising from covered transactions.”

In addition to refining internal processes, Faulkender emphasized the need for international cooperation. “Collaborating on these issues across jurisdictions makes us all more effective and helps prevent adversaries from creating risks abroad after we stop them at home,” he said. He urged allies to implement strong foreign investment review mechanisms to ensure that adversaries cannot bypass U.S. scrutiny by exploiting weaker systems elsewhere.

Faulkender also highlighted the Treasury-led Outbound Investment Security Program, which aims to restrict outbound U.S. investments that could assist foreign adversaries. “Now in its fourth month, the Outbound Program prohibits U.S. persons from making certain investments and requires U.S. persons to notify Treasury of certain other investments in certain sensitive technologies and products in the semiconductor, quantum information, and artificial intelligence sectors,” he said.

Treasury continues to evaluate the program’s scope, Faulkender said, noting, “We plan to continue to evaluate whether the program is appropriately scoped to be responsive to developments in technology and the strategies of countries of concern.”

Concluding his remarks, Faulkender reaffirmed the Administration’s commitment to enabling robust economic growth while maintaining vigilance against national security threats. “This Administration is committed to progressing the important work of CFIUS and the Outbound Program and to making sure that American businesses can grow and prosper without consequence to U.S. national security,” he said.

[Link to Text of Speech]