Earlier this year, the Treasury Department, as Chair of the Committee on Foreign Investment in the United States (CFIUS) — the regulatory group that examines how foreign investments in the U.S. might have national security implications — proposed a rule to increase the power the government has over such transactions, including in commercial real estate.

The proposed rule would include the following changes:

• Expanding the types of information CFIUS can require transaction parties and other persons to submit when engaging with them on transactions that were not filed with CFIUS;
• Instituting an extendable timeline for transaction parties to respond to risk mitigation proposals for matters underactive review to assist CFIUS in concluding its reviews and investigations within the statutory time frame;
• Expanding the circumstances in which a civil monetary penalty may be imposed due to a party's material misstatement and omission, including when the material misstatement or omission occurs outside a review or investigation of a transaction and when it occurs in the context of the Committee's monitoring and compliance functions;
• Substantially increasing the maximum civil monetary penalty available for violations of obligations under the CFIUS statute and regulations, as well as agreements, orders, and conditions authorized by the statute and regulations, and introducing a new method for determining the maximum possible penalty for a breach of a mitigation agreement, condition, or order imposed;
• Expanding the instances in which CFIUS may use its subpoena authority, including when seeking to obtain information from third persons not party to a transaction notified to CFIUS and in connection with assessing national security risk associated with non-notified transactions; and
• Extending the time frame for submission of a petition for reconsideration of a penalty to the Committee and the number of days for the Committee to respond to such a petition.

The list is theory. Here is a practical implication offered by some attorneys at Sheppard, Mullin, Richter & Hampton writing in the National Law Review. In May, President Biden signed an executive order preventing a Chinese-backed cryptocurrency mining company from owning real estate within a mile of the Francis E. Warren Air Force Base, a strategic missile base. The company had 120 days to remove all equipment they had on the property

As the attorneys wrote at the National Law Review, "CFIUS continues to use all of the tools at its disposal—including unwinding closed deals—to address risks to U.S. national security, including real estate transactions that do not involve an acquisition or investment in a U.S. business."