What Canadian Mining Companies Need to Know About CFIUS When Investing in the U.S.

Understanding national security reviews, exemptions, and compliance obligations under U.S. foreign investment laws

As Canadian mining companies continue expanding into U.S. markets, one regulatory acronym should not be overlooked: CFIUS. The Committee on Foreign Investment in the United States (CFIUS) reviews certain inbound foreign investments to assess national security risks. And yes—even for companies from allied nations like Canada—CFIUS can have significant implications.

In this post, we’ll explain what CFIUS is, when it applies, and how Canadian mining firms can navigate U.S. regulatory requirements with confidence.

What Is CFIUS?

CFIUS is an interagency committee chaired by the U.S. Treasury Department. It has authority to review—and in rare cases, block or unwind—foreign investments in U.S. businesses that may pose national security concerns.

This includes not just high-tech firms, but also companies involved in:

• Natural resource extraction (e.g., critical minerals)
• Infrastructure
• Real estate near military installations
• Sensitive data or cybersecurity

Good News: Canada Is an “Excepted Foreign State”

Under CFIUS rules (31 C.F.R. § 800.218), Canada is one of only four countries granted “excepted foreign state” status. This means certain Canadian investors may be exempt from CFIUS’s mandatory filing requirements—provided they meet the “excepted investor” criteria.

To qualify, the Canadian mining company must be:

• Ultimately controlled by Canadian nationals
• Free from foreign ownership that raises third-country concerns
• In compliance with other U.S. foreign investment laws

Note: Excepted status is not automatic. CFIUS can still review any transaction that raises red flags.

How CFIUS Applies to Mining Investments

CFIUS pays particular attention to transactions involving:

• Critical minerals essential to defense, energy, and high-tech supply chains
• Assets located near sensitive U.S. military sites (especially under CFIUS real estate rules—31 C.F.R. Part 802)
• Investments that include access to non-public technical information or board rights

Even minority investments could trigger scrutiny if they confer significant influence or access.

When Is a Filing Required?

Mandatory Filing

• If the transaction involves critical technology, and the Canadian company is acquiring a substantial interest (often >25%) in a sensitive U.S. business, a declaration may be required.

Voluntary Filing

• If the transaction may raise national security questions (e.g., proximity to military bases or involvement in critical supply chains), voluntary filing is encouraged to obtain a safe harbor from future CFIUS actions.

In 2023, Canadian investors filed approximately 9 % of the voluntary declarations reviewed by CFIUS, despite Canada’s excepted-state status.

---

Filing Fees

For formal notices, fees range from $0 to $300,000 depending on the value of the transaction:

Transaction Value	Fee
Under $500,000	$0
$500K–$4.99M	$750
$5M–$49.99M	$7,500
$50M–$249.99M	$75,000
$250M–$749.99M	$150,000
$750M+	$300,000

CFIUS Compliance Checklist for Canadian Mining Companies

• Confirm whether the investment involves critical minerals or infrastructure
• Review ownership structure to confirm “excepted investor” status
• Assess proximity of real estate to sensitive U.S. military sites (Part 802)
• Determine if board rights, information access, or control rights exist
• Consult with CFIUS counsel before finalizing transaction terms
• Evaluate whether voluntary filing offers strategic protection
• Prepare necessary declarations, certifications, and submit via CMS
• Monitor for changes in U.S. law and enforcement practices

Case Summary: Ralls Corporation v. CFIUS (Due Process and Divestiture)

In Ralls Corp. v. CFIUS, 758 F.3d 296 (D.C. Cir. 2014), a Chinese-owned U.S. company acquired wind farm projects in Oregon located near a U.S. Navy installation. The Committee on Foreign Investment in the United States (CFIUS) and subsequently the President ordered Ralls to divest those assets due to national security concerns. Ralls challenged the order, arguing it was denied due process.

The D.C. Circuit held that while the President’s national security determination was not reviewable, the process leading up to it must still comply with the Constitution. Because Ralls was never given access to unclassified evidence used against it nor a chance to respond, the court found a violation of the Fifth Amendment’s Due Process Clause.

Why it matters for Canadian mining companies: Even if a transaction appears compliant, lack of procedural fairness—such as notice and an opportunity to rebut adverse findings—can render CFIUS-related actions legally vulnerable. Companies should seek early engagement and transparency throughout the review process.

Case Summary: Shen v. Simpson (Florida Land Ownership Law)

In Shen v. Simpson, 687 F. Supp. 3d 1219 (N.D. Fla. 2023), a group of Chinese nationals lawfully residing in Florida challenged a new state law that restricts land ownership near military installations and critical infrastructure by noncitizens domiciled in certain “countries of concern,” including China. The plaintiffs argued that the law violated the Equal Protection and Due Process Clauses of the U.S. Constitution, the Fair Housing Act, and was preempted by the federal CFIUS regime.

The court denied the plaintiffs’ motion for a preliminary injunction, finding that although the plaintiffs had standing, they were unlikely to succeed on the merits. The court reasoned:

• The law did not facially discriminate based on race or national origin.
• The restrictions were rationally related to the state’s interest in national security.
• Historical precedent (e.g., Terrace v. Thompson) supported a state’s authority to restrict land ownership by noncitizens.
• The law did not conflict with or obstruct the federal CFIUS process.

Why it matters for Canadian mining companies: Even if a foreign investment complies with federal CFIUS requirements, states may enact additional land ownership restrictions that impact site selection, transaction structuring, and compliance. Companies should assess both federal and state-level rules when evaluating property near military or critical infrastructure.

Best Practices for Canadian Mining Companies

1. Start with internal due diligence
   Assess whether the U.S. investment involves sensitive assets, technology, or real estate.
2. Understand ownership and control structure
   Ensure your ownership chain supports “excepted investor” status.
3. Engage with experienced CFIUS counsel early
   Especially if critical minerals or strategic infrastructure are involved.
4. Consider a voluntary filing
   Even if not required, it can reduce long-term risk and provide legal certainty.
5. Don’t ignore CFIUS real estate rules
   Mining interests located near sensitive U.S. sites may trigger jurisdiction under Part 802.

Want to Know More?

CFIUS compliance is complex—but manageable with the right guidance. For questions about your company’s exposure or how to prepare a filing, contact your legal advisors or reach out to CFIUS@treasury.gov.

Peter Smith is a real estate, business, and mining attorney with extensive litigation experience and deep transactional knowledge. In his practice, he represents mining companies, businesses and entrepreneurs, real estate developers, and property owners through complex matters to efficiently close transactions and proactively avoid potential litigation. He can be reached at peter.smith@fennemorelaw.com.

Katie Sheftic is a mining and natural resources attorney with a background in energy, law, and policy. From transactional matters to litigation, Katie enjoys helping clients navigate the complex legal, tribal, and regulatory landscape of Idaho’s natural resources industry. She has assisted domestic and international stakeholders with mineral title opinions and helped secure successful quiet title actions for mineral rights and hard rock mining claims. She can be reached at ksheftic@fennemorelaw.com.

Smith and Sheftic regularly assist Canadian mining companies with U.S. mining law, regulatory compliance, foreign investment reviews, and transaction structuring.

—

---