On January 13, 2020, the U.S. Department of Treasury (“Treasury”) issued two anticipated final rules (the “Final Rules”) that replace the existing regulations governing the Committee on Foreign Investment in the United States (“CFIUS”). The Final Rules implement the Foreign Investment Risk Review Modernization Act (“FIRRMA”) enacted in August 2018, which expanded the United States’ foreign investment review regime. FIRRMA mandated pre-closing notification of certain foreign investments and expanded the scope of transactions subject to CFIUS’ jurisdiction. The Final Rules largely follow the proposed rules released on September 17, 2019. Our analysis of the proposed rules is available here. Our earlier analyses of FIRRMA and the “critical technologies” pilot program implementing certain FIRRMA provisions on an interim basis are available here and here.
On September 17, 2019, the Department of Treasury (“Treasury”) released for public comment two proposed rules (the “Proposed Rules”) implementing the Foreign Investment Risk Review Modernization Act (“FIRRMA”) enacted in August 2018. FIRRMA expanded the jurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”) and granted CFIUS new tools to regulate foreign investments raising national security concerns. Our previous analysis of FIRRMA is available here, and our analysis of the “critical technologies” pilot program under FIRRMA implemented by interim regulations issued by Treasury on October 10, 2018, (the “Pilot Program”) is available here.
Treasury will accept comments on the Proposed Rules until October 17, 2019, and the final regulations are to become effective no later than February 13, 2020. Companies that may be affected by the Proposed Rules are encouraged to comment. The full text of the Proposed Rules on investments by foreign persons in US businesses can be found here and on real estate transactions here. We would be pleased to assist our clients with the submission of comments.
The Trump Administration and Congress are tightening investment restrictions and export controls to address technology transfer concerns. These measures initially focus on China, but will have broader effects on investments in the United States and transfers of emerging technologies.