Domestic markets and foreign investiment regulation: a functional analysis of CFIUS
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2016
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This paper aims at carrying out functional analysis of the Committee on Foreign Investment in the United States - CFIUS, following Brazil's Economic Law tradition. The intention is to identify the function it performs, the legal structure designed for this purpose and the social effectiveness of its existence. Regarding the Committee's function, CFIUS was an entity conceived by U.S. Government to guarantee its economic sovereignty, enabling control over foreign investments and domestic markets' regulation. The legal structure designed to fulfill these goals involved the establishment of a premerger notification system whenever foreign buyers try to acquire a US company. The system is conducted by the Committee and is strictly linked to the Presidency. For its analyses, CFIUS makes use of broad hermeneutical criteria, such as (i) critical infrastructure, (ii) key-resources, (iii) critical sectors and (iv) controlling power. Throughout the notification procedure, CFIUS might conclude Mitigation Agreements and recommend the operation's prohibition. In terms of social effectiveness, CFIUS has experienced three different stages of evolution since its creation in 1975: (i) initially as a body for advisory purposes to the Presidency; (ii) later in 1988, it became responsible for the prohibition of threatening operations to US national security; (iii) after 2012, it increased significantly its activities, when Chinese investments toward the US largely amplified. Finally, when blocking foreign economic agents to exploit US companies against its national interests, CFIUS should be understood within a vast legal framework oriented to protect its economic sovereignty.