CFIUS 2025 Annual Review: Key Trends for Foreign Investors

The Committee on Foreign Investment in the United States (CFIUS) has undergone a profound transformation over the past decade. What was once a relatively narrow national security review process focused on defense-sector acquisitions has evolved into a broad-based foreign investment screening mechanism that touches virtually every sector of the U.S. economy.

As foreign investors — including Turkish companies and individuals — plan transactions for 2025, understanding CFIUS's current priorities, enforcement posture, and procedural expectations is essential. This review synthesizes the key trends from 2024 and their implications for cross-border M&A in 2025.

Based on publicly available data and CFIUS's annual reports to Congress:

• Record filings: CFIUS received more than 300 notices and declarations in 2024, continuing a multi-year upward trend
• Increased investigations: Approximately 40% of notices proceeded to the full 45-day investigation phase, up from historical averages
• Mitigation agreements: CFIUS entered into more mitigation agreements than in any prior year, reflecting a preference for negotiated solutions over outright prohibitions
• Withdrawals and refiling: A significant number of parties withdrew and refiled notices after CFIUS raised concerns, extending effective review timelines
• Presidential referrals: Two transactions were referred to the President in 2024 — the Nippon Steel / U.S. Steel deal being the most prominent

CFIUS scrutiny has expanded well beyond the traditional defense and intelligence sectors. In 2024, CFIUS demonstrated heightened interest in:

Artificial Intelligence and Advanced Computing CFIUS views AI as a critical technology with direct national security implications. Transactions involving AI companies — particularly those with access to large datasets, advanced algorithms, or dual-use applications — receive intensive review. The concern is not merely about the technology itself but about the data that AI systems process and the insights they generate.

Biotechnology and Life Sciences The COVID-19 pandemic accelerated CFIUS's focus on biotechnology. Transactions involving pharmaceutical manufacturing, vaccine development, medical device production, and genomic data companies are subject to heightened scrutiny. CFIUS is particularly concerned about foreign access to sensitive health data and the resilience of U.S. pharmaceutical supply chains.

Agricultural Technology CFIUS has expanded its focus to agricultural technology, including precision agriculture, seed technology, and agricultural data platforms. The concern is food security and the potential for foreign actors to gain insight into U.S. agricultural production patterns.

Financial Technology Fintech companies that process large volumes of sensitive financial data — payment processors, lending platforms, and financial data aggregators — have attracted CFIUS attention. The concern is both data security and potential systemic risk.

Energy Infrastructure Beyond traditional energy sector concerns, CFIUS has focused on renewable energy infrastructure, including solar panel manufacturing, wind energy components, and battery storage technology. Supply chain dependencies on foreign manufacturers — particularly Chinese suppliers — have driven this scrutiny.

CFIUS continues to apply the most intensive scrutiny to transactions involving acquirers from China and Russia. In 2024:

• Transactions involving Chinese acquirers accounted for the largest share of CFIUS investigations
• CFIUS has become increasingly skeptical of mitigation measures in Chinese-acquirer transactions, preferring prohibition or divestiture
• Russian-acquirer transactions remain essentially non-starters in sensitive sectors

Turkish acquirers are not subject to the same presumptive scrutiny as Chinese or Russian acquirers. However, Turkish companies with significant business relationships in China or Russia — or with Chinese or Russian investors — may face heightened scrutiny due to concerns about indirect foreign government influence.

Turkish acquirers should be prepared to:

• Disclose all material business relationships with Chinese and Russian entities
• Address CFIUS concerns about potential information sharing or technology transfer to third countries
• Demonstrate that the transaction does not create a pathway for Chinese or Russian access to sensitive U.S. technology or data

CFIUS has significantly expanded its monitoring of transactions that were not voluntarily filed. CFIUS has the authority to review transactions for up to five years after closing — and indefinitely for transactions that were required to be filed but were not.

In 2024, CFIUS:

• Issued an increased number of "letters of concern" to parties who completed transactions without filing
• Initiated several post-closing reviews that resulted in divestiture orders
• Expanded its use of intelligence resources to identify non-notified transactions

Foreign investors who complete U.S. acquisitions without CFIUS review — even in sectors that appear to be outside CFIUS's traditional focus — face the risk of post-closing review and potential forced divestiture. The cost and disruption of a post-closing CFIUS review far exceeds the cost of a pre-closing voluntary filing.

FIRRMA expanded CFIUS jurisdiction to cover certain real estate transactions near military installations, even where no U.S. business is being acquired. In 2024, CFIUS:

• Issued regulations clarifying the geographic scope of covered real estate transactions
• Reviewed a significant number of real estate transactions near military installations
• Required divestiture in several cases involving foreign purchases of agricultural land near sensitive military facilities

Turkish investors purchasing U.S. real estate should assess whether the property is located near a military installation, federal facility, or other sensitive location. CFIUS maintains a list of covered military installations, and transactions involving property within specified distances of these installations may require CFIUS review.

CFIUS has significantly ramped up its enforcement posture:

Civil monetary penalties: CFIUS has imposed civil penalties in an increasing number of cases, including for:

• Failure to file mandatory declarations
• Material misrepresentations in CFIUS filings
• Violations of mitigation agreement terms

Penalty amounts: CFIUS penalties can reach the greater of $250,000 or the value of the transaction per violation

Clawback provisions: CFIUS mitigation agreements increasingly include provisions allowing CFIUS to require divestiture if the acquirer violates the agreement's terms

The average CFIUS review timeline has increased significantly:

• Initial review: The 30-day initial review period is increasingly used in full, with CFIUS requesting additional information before the period expires
• Investigation phase: Full 45-day investigations are increasingly common, particularly for transactions in sensitive sectors
• Mitigation negotiations: Negotiating mitigation agreements can add weeks or months to the review timeline
• Presidential referrals: Transactions referred to the President face additional delays

Practical guidance: Foreign investors should plan for a minimum of 3–4 months for CFIUS review in non-sensitive sectors and 6–12 months in sensitive sectors. Deals with significant political dimensions — like Nippon Steel / U.S. Steel — may take longer.

Based on public statements by CFIUS officials and observable trends, the following priorities are expected to continue in 2025:

1. AI and advanced technology: Continued intensive scrutiny of AI, semiconductor, and quantum computing transactions
2. Critical infrastructure: Expanded focus on energy, telecommunications, and transportation infrastructure
3. Supply chain resilience: Scrutiny of transactions that could create foreign dependencies in critical supply chains
4. Data security: Heightened attention to transactions involving large datasets, particularly health, financial, and location data
5. Enforcement: Continued expansion of CFIUS's enforcement program, including post-closing reviews and civil penalties

Engage CFIUS counsel before signing a letter of intent. Early analysis can identify potential issues, inform deal structure, and prevent costly surprises.

In sectors with any national security nexus, voluntary filing provides certainty and avoids the risk of post-closing review. The cost of a voluntary filing is modest compared to the risk of a post-closing investigation.

If CFIUS concerns are anticipated, develop a mitigation package before filing. Proactive mitigation proposals are viewed more favorably than reactive responses.

Plan for 3–6 months for CFIUS review in most sectors, and 6–12 months in sensitive sectors. Include CFIUS review as a condition to closing in transaction documents.

For any U.S. real estate acquisition, assess proximity to military installations and other sensitive federal facilities.

CFIUS regulations and guidance continue to evolve. Monitor FinCEN, Treasury, and CFIUS announcements for new guidance that may affect planned transactions.

CFIUS has become one of the most significant regulatory considerations in cross-border M&A involving U.S. targets. For Turkish acquirers, understanding CFIUS's current priorities and procedural expectations is essential to successful transaction execution.

ULF New York advises Turkish clients on CFIUS strategy, pre-filing analysis, mitigation planning, and transaction structuring. Contact us to discuss how CFIUS considerations apply to your 2025 transaction plans.

This article is for informational purposes only and does not constitute legal advice. CFIUS regulations and enforcement priorities continue to evolve; consult qualified legal counsel for current guidance.