After more than a year of anticipation, the U.S. Department of the Treasury (“Treasury”) has released proposed regulations to implement the Foreign Investment Risk Review Modernization Act (FIRRMA). These proposed regulations follow an initial round of FIRRMA-implementing regulations issued in October 2018, which most notably included the Committee on Foreign Investment in the United States (CFIUS) critical technologies pilot program imposing mandatory CFIUS filing requirements on certain foreign investments in U.S. technology and life sciences companies.
The draft regulations propose long-awaited answers to questions about how Treasury and the other CFIUS member agencies will conduct national security reviews of foreign investment under the “modernized” FIRRMA construct, and would amend and restate in entirety the existing rules at Part 800 of the Treasury Regulations. As with the October 2018 regulations, the new proposed rules include changes that will fundamentally alter how foreign investors and U.S. businesses approach mergers and acquisitions, equity investments, and real estate transactions going forward. In other ways, the new rules formalize practices that CFIUS has adopted over time to address the current national security and international trade policy environment.
This piece — highlighting some of the key takeaways from the sweeping proposal — is the first in a series of four client alerts. The next three will address in more detail the proposed regulations’ treatment of: (1) real estate transactions; (2) transactions involving U.S. businesses relating to critical technologies, critical infrastructure, and sensitive personal data; and (3) the type and composition of foreign investors.
Read this first Client Alert