48) The first transaction blocked by CFIUS was Chinese military aircraft manufacturer China National AeroTechnology Import and Export Corporation's ("CATIC") (49) acquisition of American aircraft parts manufacturer MAMCO Manufacturing Inc.
62) Like the CATIC-MAMCO acquisition, the Huawei-3Leaf acquisition demonstrates that CFIUS bases its decision to permit or block a transaction based on a foreign entity's relation with a foreign government as well as the potential for that entity to gather intelligence as a result of the transaction.
In 2000, CFIUS reviewed the acquisition of Verio, (63) an American web hosting company, by NTT Communications, (64) the telecommunications subsidiary of a Japanese holding company where the Japanese government was a majority shareholder.
Besides the defense and information technology industries, CFIUS has been active in reviewing transactions within the energy industry.
Although CFIUS will generally prevent the transfer of control over American energy-related assets to foreign entities, it did permit one such acquisition.
CFIUS has been active in reviewing decisions beyond the energy industry.
Indeed, in the United States, having the Treasury Secretary lead CFIUS (as opposed to the Secretary of Defense, for example) sends a message to investors that CFIUS remains sensitive to promoting an open investment environment.
The CFIUS process can begin in one of two ways: (1) the foreign investor can voluntarily file a notice with CFIUS, (109) or (2) any CFIUS member can unilaterally initiate a review.
Once CFIUS initiates the review process, in most cases it has thirty days to conduct an initial review to determine the potential national security implications of the transaction.
Although the CFIUS investigation-triggering factors appear more specific than those provided by MOFCOM (which only requires that the transaction "may affect the national security" (118)), the inclusion of "catch-all" provisions in the CFIUS regulations reduces any benefits to foreign investors that such specificity may provide.
If CFIUS finds through the investigation that the transaction indeed poses national security concerns, it can work with the investor to negotiate a mitigation agreement to address threats to national security.
If a transaction's security threats cannot be mitigated and CFIUS--even only one agency--believes the transaction should be suspended or prohibited, CFIUS refers the transaction to the President for a final decision.