Transactions involving foreign Investors may require review by the Committee on Foreign Investment in the United States (“CFIUS”). CFIUS reviews the facts and issues a statement about the national security risks associated with the transaction.
There are two types of statements of formal review: notices and declarations. A “notice” is a full-form filing that results in a definitive opinion by the CFIUS but may take months to obtain. A “declaration” is a short-form filing that may not result in a definitive opinion by CFIUS but is intended to be obtained within 45 days.
U.S. Treasury: CFIUS Laws and Guidance
The Company and Investors can include a provision obligating both parties to use best efforts in submitting the transaction to CFIUS and obtaining clearance. The Company and Investors may also want to include additional obligations regarding risk allocation measures, waivers of responsibility for filing fees or penalties, indemnification, or other terms related to CFIUS filing.
Term Sheet Language: Investors and the Company shall use reasonable best efforts to submit the proposed transaction to the Committee on Foreign Investment in the United States (“CFIUS”) and obtain CFIUS clearance or a statement from CFIUS that no further review is necessary with respect to the parties’ [notice/declaration]].