Real Estate Will Be a Bigger Focal Point Under Trump’s CFIUS

A February memorandum titled “America First Investment Policy” noted that the U.S. will protect its farmland and real estate located near “sensitive facilities” and strengthen CFIUS’ authority to review deals for greenfield investments.

The memo also states that economic security is national security, is a shift in how prior administrations viewed such concepts.

“The concept of economic security as national security being so explicitly pronounced—that is a principle of the Trump administration that is likely to bear weight in how CFIUS reviews transactions,” Pillsbury partner Matthew Rabinowitz, who is part of the firm’s International Trade practice, told Law360.

Trump’s memo also notes that if CFIUS identifies a national security sensitivity in a transaction, it can use a mitigation agreement to require the transaction parties to agree to certain terms for the government to allow the deal.

Rabinowitz said he has found that mitigation has grown increasingly complicated and harder to implement in recent years, which usually leads to longer negotiations and challenges down the road.

“In theory, we might see less of that in the new administration, which may result in more outright, blocking orders, rather than these very intricate mitigation arrangements,” he said.