Recent actions by the U.S. Department of the Treasury (“Treasury”) and the U.S. Department of Justice (“DOJ”) offer insight into the balance—and in certain respects, tension—in how the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) and other agencies are approaching national security regulation of transactions under the Trump Administration.[1]
On one hand, Treasury is exploring mechanisms intended to improve process efficiency for repeat investors, including through the ongoing development of its Known Investor Program (“KIP”), and taking steps to reduce unnecessary costs and complexity associated with mitigation agreements. Indeed, the regulatory environment for foreign investment in the United States remains comparatively favorable overall, particularly for investors from allied countries.
On the other hand, certain transactions are encountering real-time administrative friction and evolving expectations regarding national security commitments, even where incremental transaction-specific risk may be limited (or non-existent). At the same time, DOJ’s recent litigation seeking to enforce a presidential divestiture order reflects a readiness to deploy enforcement tools from the CFIUS toolkit even as uncertainty persists regarding enforcement of other transaction-related national security regulations, including the DOJ rule on access to U.S. bulk sensitive personal data (“Data Security Program” or “DSP”), the Treasury Department’s Outbound Investment Rule (“OIR”) and the U.S. Department of Commerce (“Commerce”) rule on information and communications technologies and services (“ICTS Rule”).
For investors and deal teams navigating CFIUS and other U.S. national security regulations, these developments merit close attention.
The Trump Administration’s America First Investment Policy (“AFIP”) emphasizes the importance of investment from American allies and partners and encourages executive branch agencies to pursue measures designed to reduce regulatory barriers and promote administrative efficiency. In the CFIUS context, this policy direction appears to be influencing both process management and programmatic innovation.
Operationally, there is increasing emphasis within CFIUS on swiftly resolving cases that do not present national security concerns within statutory timelines and, where concerns do arise, identifying mitigation needs earlier in the review process to facilitate execution of National Security Agreements before expiration of the statutory review period. In parallel, the Committee appears receptive to investor feedback regarding mitigation conditions that are unnecessarily burdensome or no longer calibrated to current national security needs, including terminating agreements where the underlying animating national security issue no longer exists and considering targeted reductions in ongoing obligations in appropriate cases. These are welcome developments for many investors.
Treasury’s February 2026 request for information (“RFI”) regarding the KIP further highlights the influence of the AFIP on the CFIUS process. First announced in May 2025 and piloted with a limited group of frequent filers, the KIP is designed to permit participating investors to provide baseline organizational, governance, operational, and compliance information outside the context of any particular transaction. Conceptually, the program seeks to address the inefficiencies tied to a persistent feature of the CFIUS process—repeated submission and review of substantially similar investor information across transactions—by enabling advance familiarity with an investor’s structure, ownership, and other facets of its business and relationships that could be leveraged in subsequent reviews.
The RFI seeks stakeholder input on both eligibility criteria and the scope of information collection. Treasury has proposed limiting participation to investors with demonstrated CFIUS experience and a strong regulatory compliance posture, including multiple prior submissions to the Committee, anticipated future filing activity, and structural characteristics evidencing separation from jurisdictions identified as adversaries.
At the same time, the categories of information contemplated by the KIP are expansive and, in several respects, resemble diligence typically associated with later-stage review or mitigation discussions. The proposed questionnaire would encompass ownership and governance information, biographical and organizational data, operational and investment strategy materials, prior CFIUS engagement history, and information intended to demonstrate distance from adversary jurisdictions. The breadth of these elements raises practical questions regarding the level of effort required to assemble and maintain KIP materials, the frequency with which updates or recertifications may be necessary, and the extent to which information collected outside a transaction context will remain usable across diverse deal structures and with the passage of time.
These considerations intersect with a broader question for investors: absent clearly articulated process benefits, participation in the KIP may entail front-loaded information disclosure without corresponding certainty regarding downstream efficiencies. Treasury has not yet specified benefits—such as shortened review timelines, reduced information requests, or modified validation procedures—that would allow investors to assess the practical value proposition of participating in the program.
Experience with the “excepted investor” framework, which was introduced in 2018 following the passage of CFIUS reform legislation, provides a relevant reference point. While that framework confers defined regulatory advantages under the CFIUS regulations to investors from “excepted foreign states” that meet certain criteria, its practical impact has been limited due to interpretive complexity and residual uncertainty. The KIP differs conceptually in that it is oriented toward process facilitation rather than regulatory safe harbor; nevertheless, its ultimate trajectory and efficacy may similarly depend on whether participation is associated with observable improvements in the review experience.
Against this backdrop, the RFI represents a meaningful opportunity for stakeholders to help shape program design. In particular, investors may wish to consider whether additional features—including information reuse mechanisms, streamlined validation procedures, or periodic certification models—could translate advance information sharing into tangible administrative efficiencies in their own CFIUS reviews. Notably, the RFI also solicits broader feedback on the CFIUS process, providing an avenue for investors to comment on emerging process improvements as well as areas where administrative burden remains.
While elements of the CFIUS process appear to be moving toward greater efficiency, this experience is not uniform across transactions. In practice, some agencies are now insisting on higher level review from their leadership for all transactions within their domains, while others face resource constraints—including reduced staff—that may affect processing timelines. These dynamics can result in variability in review pace and unpredictability across cases, depending on co-lead assignments and other factors.
For example, transactions implicating Department of Homeland Security (“DHS”) equities have been less likely to achieve clearance through the declaration process, contributing to increased conversion of declarations to notices when DHS is a co-lead. More broadly, internal escalation dynamics, policy sensitivity, and staffing considerations can contribute to delays or variability in review outcomes even where overarching policy direction favors efficient processing.
Mitigation practice reflects a similarly mixed picture. Although there appears to be general emphasis on limiting mitigation to circumstances where national security concerns are clearly articulated and tailoring obligations to avoid unnecessary burden, certain areas are receiving renewed attention. Agencies appear to be focusing with increased intensity on supply assurance commitments, ownership and control considerations within the defense industrial base, and broader strategic competition dynamics—particularly in relation to China—that may inform expectations regarding transaction-related commitments. These developments suggest an evolution in mitigation emphasis rather than a categorical contraction in mitigation usage.
Finally, U.S. government shutdowns continue to put strain on the process. Following the longest shutdown in U.S. history last year, CFIUS’s operations were briefly paused in early February, and now have been halted since February 14 due to a lapse in funding for DHS, a CFIUS member agency. While other CFIUS member agencies are operating normally, CFIUS has declined to accept new filings and has tolled all deadlines applicable to the Committee. This cycle of stops and starts has added an additional layer of uncertainty, and the current interruption could lead to a backlog of cases that will take some time to work through once funding for DHS is restored.
Enforcement represents another dimension of differentiation within the national security regulatory landscape. A complaint filed by DOJ on February 9, 2026, seeking to enforce President Trump’s July 2025 order requiring divestment of Jupiter Systems by Suirui, as well as the disposition by Jupiter Systems of certain interests in its Chinese subsidiaries,[2] reflects a new willingness to invoke judicial mechanisms to ensure implementation of remedial measures where compliance remains incomplete.
Following extensions of the original divestment deadline, DOJ initiated litigation just six days after the final deadline passed without the transaction parties completing the required actions. The complaint seeks declaratory and injunctive relief, including orders confirming noncompliance, compelling divestment, and transferring equity and assets to a third-party fiduciary pending full implementation. While the procedural posture is notable, the broader significance lies in the signal conveyed regarding the credibility of presidential orders and the government’s readiness to pursue enforcement where negotiated or ordered outcomes are not implemented.
And yet, while the Jupiter Systems complaint suggests an administration willing to mete out consequences for unresolved national security concerns, other national security regulatory regimes that the Trump Administration left in place—while at the same time rescinding a wide array of Biden-era policies—remain largely unenforced. For example, while compliance considerations relating to the DOJ Data Security Program have arisen in certain CFIUS contexts since its implementation, we are not aware of any DSP enforcement actions underway nearly a year since its initial effective date. Similarly, it is not evident that Commerce is prioritizing enforcement of the ICTS Rule, and to our knowledge enforcement of the OIR has been limited.
This combination of operative regulatory frameworks, emerging compliance expectations, and limited enforcement visibility creates a degree of uncertainty for market participants regarding how these regimes will ultimately be applied.
Viewed together, Treasury’s continued development of the KIP and DOJ’s enforcement action in the Jupiter Systems matter illustrate complementary aspects of the CFIUS ecosystem. The Committee appears to be experimenting with mechanisms designed to reduce friction in its engagement with familiar investors while simultaneously reinforcing the credibility of its remedial framework in higher-risk scenarios.
For market participants, these developments underscore the importance of approaching CFIUS strategy in a holistic and lifecycle-oriented manner. Considerations may include portfolio-level engagement with emerging process initiatives such as the KIP, proactive evaluation of review timelines and mitigation pathways where risk is foreseeable, calibrated voluntary filing decisions informed by evolving enforcement visibility, and sustained attention to post-clearance compliance obligations.
If you have any questions concerning the material discussed in this client alert, please contact the following members of our CFIUS practice.
[1] See our client alert in connection with the issuance by the Trump Administration of the America First Investment Policy.
[2] See our client alert in connection with the order “Regarding the Acquisition of Jupiter Systems, LLC by Suirui International Co., Limited.”
Back
