Last month, the Committee on Foreign Investment in the United States (CFIUS) issued a proposed rule that could restrict foreign investment in real estate located near certain military bases.
The Committee on Foreign Investment in the United States (CFIUS) serves as a review committee for certain inbound Foreign Direct Investment (FDI) transactions, to determine if such transactions pose a risk to national security.
In late 2012, an American company, Ralls Corporation, with two Chinese ultimate owners, purchased certain wind farm projects in Oregon, including associated real estate. What began as a routine cross-border transaction sparked a three-year lawsuit between Ralls Corporation and the Committee on Foreign Investment in the United States (CFIUS), an inter-agency committee housed within the Executive Branch and tasked with reviewing foreign investments in the U.S. based on national security concerns. In a nutshell, CFIUS determined that Ralls Corporation’s acquisition of the wind farm projects posed a national security threat, and required Ralls Corporation to divest its interest in the project.
