The US Department of Treasury (Treasury) has issued proposed regulations to implement changes - made by the Foreign Investment Risk Review Modernization Act (FIRRMA) - that expand the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS). The proposed regulations are notable to the extent they:
- Define CFIUS jurisdiction over certain "non-controlling investments" by foreign persons in US businesses that deal in critical technology, critical infrastructure, or sensitive personal data;
- Set parameters around the increased CFIUS authority to review real estate transactions for potential national security implications;
- Implement procedural mechanisms, including mandatory as well as voluntary short-form declarations for certain transactions; and
- Avoid, for now, imposing filing fees for CFIUS review.
The proposed regulations, which were formally published on September 24, 2019, are now in the public consultation process, and will remain open for comment through October 17, 2019. Thereafter, Treasury, on behalf of CFIUS, will publish final regulations that per FIRRMA must take effect no later than February 13, 2020. The proposed regulations would not affect existing CFIUS regulations concerning "controlling" covered transactions, nor the mandatory filing process established by the interim Pilot Program regulations, which require a CFIUS filing for transactions involving US businesses dealing in certain critical technologies.
Read our full briefing here for more detail about the proposed changes and their practical implications.
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