Editors’ note: This post also appears on Lawfare.

In the past year, the U.S. Committee on Foreign Investment in the United States (CFIUS) reviewed a record number of transactions for national security concerns. In July, the U.K. government blocked its first transaction under a new investment screening law—the National Security and Investment Act (NSIA)—that took effect in January. Also in July, the Biden administration endorsed the development of a mechanism to screen outbound investment from the United States to countries of concern, particularly China. Although Congress ultimately omitted a broad outbound investment screening mechanism from the CHIPS and Science Act passed in August, bipartisan support for such a mechanism suggests it may move forward in another form. 

All of these developments are examples of what we call “national security creep”: the recent expansion of national security-related review and regulation of cross-border investments to allow government intervention in more transactions than ever before. As we explain in a forthcoming Columbia Law Review essay, national security creep raises both theoretical and practical questions for regulators, judges, deal parties, and scholars—all of which suggest that countries ramping up their national security review of investments should take care to do so thoughtfully and as transparently as possible.

Kristen Eichensehr & Cathy Hwang, National Security Creep in Cross-Border Investments, Just Security (September 13, 2022).