CFIUS Touts Enforcement Capabilities with $60 million Penalty

Aug. 22, 2024
By: Marvin E. McPherson

The U.S. Treasury Department’s Committee on Foreign Investment in the United States (CFIUS) is reminding the public of its enforcement power. CFIUS launched a new enforcement page on its website, offering greater transparency and a bit of warning regarding enforcement actions by CFIUS. This action reflects a key theme in CFIUS's 2023 Report to Congress which outlined a stronger focus on monitoring and enforcing compliance with National Security Agreement (NSA), Letters of Assurance, mandated divestitures, and other mitigation agreements designed to resolve national security concerns related to foreign investments in U.S. entities, technology, and specific real estate.

The newly launched enforcement page featured a recent $60 million penalty imposed on T-Mobile US. This fine was part of a settlement related to violations of the 2018 NSA, which was a condition for CFIUS's approval of T-Mobile's $23 billion merger with Sprint in 2020. The penalty stemmed from T-Mobile's failure to adequately protect sensitive data. Although T-Mobile has stated that it reported the issues promptly and addressed them swiftly, CFIUS found that the company delayed reporting some incidents of unauthorized access, hindering the agency's investigation and mitigation efforts.

The $60 million fine is the largest monetary penalty ever imposed by CFIUS, but it is part of a broader trend. In the past 18 months, CFIUS has issued six penalties, tripling the number previously issued since its establishment in 1975.

The message is clear, CFIUS is committed to using its expanded resources to rigorously monitor and penalize noncompliance with its regulations and the terms of national security agreements. Companies involved in CFIUS mitigation agreements should ensure robust internal compliance controls and prepare for rigorous audits and compliance reviews in this heightened enforcement environment. If you have any questions regarding NSA compliance or covered CFIUS transactions, please contact any attorney at Barnes Richardson and Colburn.