U.S. Department of the Treasury

CFIUS has found it very helpful in the past for transaction parties to provide the following additional information, even if the activity is not the primary focus of their commercial operations.  CFIUS often requests this information after a voluntary notice has been accepted if it was not included in the initial filing.

1. Cyber systems, products, services:  Identify whether the U.S. business that is the subject of the transaction develops or provides cyber systems, products, or services, including
2. 1. Business systems used to manage or support common business processes and operations (for example, enterprise resource planning, e-commerce, email, and database systems); control systems used to monitor, assess, and control sensitive processes and physical functions (for example, supervisory control, data acquisition, and process and distributed control systems); safety, security, support, and other specialty systems (for example, fire, intrusion detection, access control, people mover, and heating, ventilating, and air conditioning systems); or
   2. Telecommunications and/or Internet or similar systems, products or services.
3. Natural resources:  Identify whether the U.S. business that is the subject of the transaction processes natural resources and material or produces and transports energy, and the amount processed, produced, or transported annually.

It may also be useful to discuss the business rationale for the transaction in the notice.

Lastly, CFIUS’s regulations require parties to provide information regarding any other applicable national security-related regulatory authorities, such as the ITAR, EAR, and NISPOM.  Some of the regulatory review processes under these authorities may have longer deadlines than the CFIUS process, and parties to transactions affected by these other reviews may wish to start or complete these processes prior to submitting a voluntary notice to CFIUS under Section 721.

Pursuant to the regulations at 31 C.F.R. part 800, a declaration must include a statement as to whether the U.S. business produces, designs, tests, manufactures, fabricates, or develops one or more “critical technologies,” a term defined at 31 C.F.R. § 800.215 to include, inter alia, certain items controlled under the EAR.  If applicable, the declaration must also include a description of each such critical technology and the Export Control Classification Numbers (ECCN).

Note that some items may be listed on the Commerce Control List (CCL), but are not critical technologies under the CFIUS definition.  While not required, parties may include information about such items as part of the declaration submission.  Parties may also state whether the items that the U.S. business produces, designs, tests, manufactures, fabricates, or develops are designated as EAR99.  Inclusion of this information may avoid the need for the Committee to pose follow-up questions on these items during the assessment period and may facilitate a more efficient process. 

Suggestions include:

• Sections 800.502(c)(1)(iii) and (v) require submission of information related to the foreign person and its parents.  CFIUS’s review would be aided if the notice identifies whether the actual party in interest is the party to the transaction or one of the parents of the party to the transaction.  CFIUS does not consider special purpose vehicles, wholly-owned subsidiaries established for the sole purpose of the transaction, or other shell companies to be the actual parties in interest in a transaction.
• Sections 800.502(c)(3)(iii) and (iv) require information regarding certain U.S. Government contracts.  Parties are advised to update and verify U.S. Government contact information for the contracting officials of such contracts.  Private sector entities not party to the notice are not acceptable points-of-contact for contracts in question.

Notices are determined to be incomplete for multiple reasons, commonly including:

• Unclear description of business lines – the notice must provide a clear and detailed account of each company’s products and services;
• Unclear description of the transaction – the notice must clearly describe all entities involved in the transaction and the nature and structure of the transaction;
• Absence of geographic location(s) of the U.S. business – the notice must clearly describe the U.S. business with addresses and/or geographic coordinates for all U.S. properties and facilities; and
• Absence of a certification – all notices must be certified correctly (in accordance with the certification template at the Committee’s section of the Department of the Treasury website and 31 C.F.R. §§ 800.204 or 802.202) to be deemed complete.