U.S. Department of the Treasury

FIRRMA does not prohibit investments from any country, and investments from all foreign persons remain subject to CFIUS jurisdiction over transactions that could result in foreign control of a U.S. business.  As required by FIRRMA, however, the regulations limit the application of CFIUS’s jurisdiction over non-controlling “covered investments” and certain real estate transactions by certain foreign persons, defined as “excepted investors,” from certain “excepted foreign states.”  Any such eligible investor and foreign state must meet specific criteria to qualify for this status.

No.  CFIUS maintains its authority to review the potential national security effects of any transaction that could result in foreign control of any U.S. business.  The regulations expand CFIUS’s jurisdiction over certain “non-controlling” transactions and certain real estate transactions.

Given the specificity of certain provisions of the rule, Treasury anticipates that it will periodically review, and when necessary amend, the regulations to address changes in technology and data use, as well as the evolving national security landscape more generally.

The Department of the Treasury published proposed versions of the regulations in September 2019 and received comments from the public.  Treasury made a number of revisions in response to the comments submitted during the comment period.  The preambles to the final rules summarize these changes.

In response to written comments, the final rules update a number of provisions including by:

• adding a definition for “principal place of business;”
• modifying certain criteria to qualify as an “excepted investor;”
• clarifying the application of the “incremental acquisition rule;”
• adjusting the treatment of genetic data within the definition of “sensitive personal data;”
• refining the application to investment funds, including by amending the definition of “substantial interest;”
• modifying the exceptions for certain real estate transactions in airports and maritime ports; and
• refining the geographic coverage relating to certain military installations on appendix A to the real estate regulations.

The rules also include a number of additional illustrative examples and provide clarifying edits in the text of the provisions.  Finally, the rule amending the part 800 regulations incorporates many of the provisions of the pilot program regarding critical technologies (published in October 2018), including the mandatory declaration requirement for certain covered transactions involving certain U.S. businesses that produce, design, test, manufacture, fabricate, or develop one or more critical technologies.  The mandatory declaration requirement for certain critical technology related transactions was further revised by regulations effective October 15, 2020.

The specificity provided in the regulations gives clarity to the business and investment communities with respect to the types of transactions that are covered by the Committee’s new authority under FIRRMA.  The CFIUS process, as modernized and strengthened by FIRRMA and these regulations, should enhance confidence in the nation’s longstanding open investment policy.

Final regulations implementing FIRRMA took effect on February 13, 2020.  Regulations implementing a CFIUS filing fee took effect on May 1, 2020.  A revision to the regulations concerning mandatory declarations was made effective October 15, 2020.  Additional information on CFIUS’s legal authorities and regulations can be found on the CFIUS Laws and Guidance page.

The rules published in the Federal Register in 2020 finalize the regulations relating to FIRRMA.  The Department of the Treasury previously published proposed versions of the regulations, on which it received comments from the public.  The regulations implement changes that FIRRMA made to CFIUS’s jurisdiction and review process.  For more information on the implementing regulations, refer to the CFIUS Laws and Guidance page.

Yes.  In general, a stipulation could expedite review and action by CFIUS because it may streamline certain aspects of CFIUS’s review.  It may also result in fewer follow-up questions from the Committee.  Parties submitting a stipulation should be aware that the Committee and the President are entitled to rely on such stipulation in determining whether the transaction is covered under the relevant regulations and/or a foreign government-controlled transaction; parties making a stipulation waive the right to challenge any such determination.  Additionally, neither the Committee nor the President is bound by any such stipulation, nor does any such stipulation limit the ability of the Committee or the President to act on any authority provided under Section 721 with respect to any covered transaction.

Yes.  The timeline for investigations has been updated to allow the Secretary of the Treasury to grant one 15-day extension (i.e., extending investigations from 45 to 60 days) in “extraordinary circumstances.”

Yes.  The timeline for CFIUS reviews changed upon enactment of FIRRMA.  The review period for any notice accepted after FIRRMA became effective is a maximum of 45 days, rather than 30 days.  If an investigation is required, it will commence no later than the end of the 45-day review period prescribed by FIRRMA.