The Committee on Foreign Investment in the United States (CFIUS) is an inter‑agency U.S. government committee, chaired by the Treasury Department, that reviews certain foreign investments in U.S. businesses and some real‑estate transactions to determine their impact on U.S. national security. Under section 721 of the Defense Production Act (codified at 50 U.S.C. §4565), CFIUS is authorized to: (1) review and investigate any “covered transaction” involving foreign control or certain sensitive non‑controlling investments; (2) identify national‑security risks from those deals; (3) negotiate, impose, and monitor mitigation agreements, conditions, or orders to address those risks; and (4) recommend that the President suspend, prohibit, or unwind a transaction if the risks cannot be satisfactorily mitigated. Section 721 is also the legal basis for CFIUS’s implementing regulations in 31 C.F.R. chapter VIII, which spell out its review process and authorities in more detail.
For HieFo, being ordered to “divest all interests and rights” in the Emcore Assets means it must fully and permanently give up any form of ownership, control, or benefit related to those assets. In practice, this typically requires: (1) selling the Emcore chip and wafer‑fabrication businesses and associated assets to a buyer acceptable to CFIUS; (2) terminating or transferring any voting rights, board seats, veto rights, profit‑sharing, options, or other contractual rights tied to the assets; and (3) ensuring that HieFo and all its affiliates retain no residual equity, debt‑like interests, intellectual‑property rights, data access, or management influence over the Emcore Assets once divestment is complete. CFIUS commonly uses divestiture orders of this kind where it concludes that foreign ownership of a sensitive U.S. business poses unacceptable national‑security risk.
The order empowers CFIUS to verify that HieFo has destroyed or transferred all intellectual property (IP) tied to the Emcore Assets by using its standard monitoring and enforcement tools. Under section 721 and CFIUS’s mitigation framework, this typically includes: (1) requiring detailed certifications from HieFo describing what IP (designs, software, process know‑how, data) existed and how each item was destroyed or transferred; (2) conducting on‑site compliance inspections of facilities and IT systems; and (3) using independent third‑party auditors or monitors to review technical documentation, access logs, backups, and records to confirm that HieFo no longer retains the Emcore‑related IP or non‑public technical information. CFIUS can also demand ongoing reports and supporting evidence, and investigate any anomalies as potential violations of the order or mitigation conditions.
If HieFo fails to comply with the order or tries to evade it, it faces several layers of potential enforcement: (1) CFIUS can treat non‑compliance or false certifications as a violation of section 721 or of a CFIUS order/mitigation condition, and impose civil monetary penalties under its regulations (for example, up to millions of dollars per violation for material misstatements, omissions, or breaches of mitigation obligations, as described in 31 C.F.R. §§800.901, 802.901); (2) CFIUS can seek other remedies such as new or tightened conditions, directed notices, or action plans; (3) the President can order further action to unwind or block related transactions; and (4) CFIUS may refer misconduct to other U.S. enforcement authorities, exposing the company and responsible individuals to additional civil or criminal penalties under other laws (such as false‑statements or obstruction statutes). The Attorney General is explicitly empowered in such orders to bring actions in U.S. courts to enforce compliance.
Under typical CFIUS mitigation practice and as reflected in this order’s language that audits occur “at no expense to CFIUS,” HieFo bears the costs of compliance. That generally means HieFo must pay for: (1) internal controls and reporting systems required by the order; (2) any independent third‑party monitors, auditors, or consultants appointed to verify compliance; and (3) the time and resources needed to respond to CFIUS information requests, inspections, and certifications. The U.S. government (CFIUS and its member agencies) does not reimburse these expenses.
The executive order and publicly available materials do not spell out detailed treatment of EMCORE employees, contracts, and operations during the 180‑day divestment period. In comparable CFIUS‑mandated divestitures, the foreign owner is typically allowed to continue operating the business on an interim basis (subject to strict restrictions on access to sensitive technology and data) while it seeks an approved buyer, and employees and customer contracts usually transfer to the eventual acquirer. However, the precise terms for this transaction—such as whether particular staff or contracts may be reassigned, or what operational limits apply before divestment—is not disclosed in the public record, so the specific impacts on EMCORE personnel and ongoing operations cannot be determined from available information.