In 2018, the Foreign Investment Risk Review Modernization Act (FIRRMA) was signed into law to address concerns regarding foreign investments in American-made technologies and properties. Just last month, FIRRMA was updated to expand the national security review of investments and real estate transactions that previously fell outside the jurisdiction of the Committee on Foreign Investment in the U.S. (CFIUS).
Under the new regulations, a U.S. company that “produces, designs, tests, manufactures, fabricates, or develops one or more critical technologies” may undergo heightened scrutiny by CFIUS. This enhanced oversight of proposed foreign investments will be especially stringent for U.S. companies involved with what’s known as “critical infrastructure,” including energy, telecommunications, and transportation, as well as those U.S. companies that collect “sensitive personal data” for healthcare, finance, and geolocation purposes. FIRRMA also authorizes CFIUS to review the foreign purchase and lease of real estate located within proximity to U.S. airports, seaports, and military installations.
What the New FIRRMA Regulations Mean For You
With nefarious foreign activity reportedly involved in everything from our elections to our favorite face-aging app, many American citizens are applauding the increased scrutiny. That’s because increased regulations over these types of acquisitions help secure our supply chain—ultimately protecting consumers from attacks on the very goods and services they rely on.
While FIRRMA aims to protect U.S. small businesses, the U.S. economy, and the American consumer, if you’re an emerging tech entrepreneur looking for investment from outside of the U.S.—or a venture capitalist trying to fund foreign innovation—you might be shaking your head at another round of red-tape to break through.
Tech startups and venture capitalists aren’t the only ones affected. CFIUS’ increased jurisdiction means a lot more work for the 17 U.S. departments and agencies that make up the interagency body. While FIRRMA reform will provide more resources for CFIUS, it also added new reporting requirements and deadline controls which are expected to increase member bodies’ case load exponentially.
FIRRMA Reform: Modernizing Case Management
CFIUS is chaired by the U.S. Treasury, and its members include Justice, Homeland Security, Commerce, Defense, State, and Energy, among others. For them to keep up with FIRRMA’s new mandates, it will be critical for each body to modernize, streamline, and optimize their case review, analysis, and reporting processes. U.Group created a solution that does just that.
The solution is a sophisticated case management tool with modern features that connects hundreds of users across dozens of organizations to encourage real-time collaboration in the risk assessment of foreign transactions. Our case management tool provides a centralized method to efficiently gather information from disparate data sources to create a comprehensive set of risk analyses from multiple subject matter experts. Since its deployment, the system has provided a mechanism for various organizations to read and compare the analysis of others and take their positions into consideration while evaluating their own.
By providing a secure common workspace, U.Group’s case management tool fundamentally changes the way analysts collaborate during the review of transactions—reducing email, automating tasks, enhancing collaboration, streamlining reporting, and managing workflows. Without this tool, hundreds of emails would be transmitted throughout the duration of the case review period to disseminate information and collect stakeholder responses. Now users can react in real-time to collectively deliberate on the status of an investment or acquisition case—resulting in hundreds of hours saved per year.
A brief description of the tool’s key internal benefits is outlined below:
- Email reduction. The system disrupts organizations’ dependence on email. By offering a secure common workspace to analyze and deliberate on transactions, the amount of time and resources used to send hundreds of emails with multiple attachments is dramatically reduced.
- Real-time, in-application communication. The system also dramatically improves communication around case deadlines by visualizing timelines and creating simple user-centered layouts to solicit stakeholder responses. By shifting case communication away from email, all stakeholders simultaneously receive updates in real-time about the status of the case and the collective position within the organization.
- Automated notifications. By generating automated email notifications, the system provides stakeholders with reminders to stay engaged with the case and eliminates the effort of sending email reminders and status updates for the case management team. In addition, several repetitive tasks that occur for every case—such as notifying stakeholders and soliciting stakeholder positions—are automated.
- Reporting. In addition to providing a new reporting capability for analysts, the system allows stakeholders and leadership to generate reports related to cases and trends. This gives users a high level of visibility into the industries and foreign acquirers most impacted by foreign investment transactions.
- Workload management. The system created a new suite of features to help leadership manage the workload of case managers. This provides a complete picture of each team member’s caseload.
IT Modernization for CFIUS Members and Beyond
In light of the increased demands imposed by FIRRMA reform, it’s become more important than ever for member bodies to adopt a common workplace tool instead of a distributed approach to case management. U.Group’s platform would allow them to create the infrastructure and rapidly collaborate, saving hundreds of stakeholder hours per year.
But IT modernization is about more than just saving time. Platforms like U.Group’s case management tool allow organizations to shift from low-value to high-value work by reducing the reliance on paperwork and email processing to transmit data.
For instance, case managers can send requests for information to various stakeholders and receive responses in a centrally managed location with respondents accurately tagged to each response. Stakeholders can more easily locate the cases that require their immediate attention and those which have been identified as most relevant to their expertise.
By reducing the amount of time spent on administrative processing, analysts are able to spend more time focusing on their risk assessments. This will not only allow member bodies to keep up with the demands of FIRRMA’s new mandates, but strengthens their inputs to this critical national security body. After all, keeping our country safe—not creating unnecessary work—is what FIRRMA is all about.