WASHINGTON (Reuters) -The Biden administration is proposing to raise to $5 million the maximum fine it can impose for making misstatements to CFIUS, a powerful U.S. committee that screens foreign investments in the United States for national security risks, a senior Treasury official said on Thursday.
The penalty ceiling for that violation currently stands at $250,000. The Treasury Department, which leads the Committee on Foreign Investment in the United States (CFIUS), announced plans to increase limits in a press release on Thursday.
“When somebody lies to the Committee, that matters, sometimes to a greater degree than $250,000 can deter” the official said, briefing reporters on the rules proposal on Thursday afternoon.
Axios was first to report the change in dollar amount.
The proposal is a sign of CFIUS’s increasing focus on enforcement. The Committee issued enforcement guidelines in late 2022 and its first-ever publicly announced penalties of $1 million in 2018 and $750,000 in 2019.
If finalized, the new rules would also allow CFIUS to issue subpoenas to third parties not involved in CFIUS-reviewed transactions in order to evaluate national security risks arising from transactions that were not formally reported to the committee.
Many foreign purchasers of stakes in U.S. companies are required by CFIUS to sign so-called mitigation agreements to assuage national security concerns posed by the deals. CFIUS is then tasked with ensuring compliance with those agreements.
The Committee already has the authority to issue penalties in connection with a transaction up the value of that deal, which can run into the billions of dollars.
(Reporting by Alexandra Alper in Washington; Editing by Chizu Nomiyama and Matthew Lewis)
