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In September 2019 the Department of Treasury issued proposed regulations that would implement changes that The Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) made to the current jurisdiction of the Committee on Foreign Investment in the United States (CFIUS). FIRRMA broadens the authorities of the President and CFIUS to address national security concerns that are arising from certain investments and real estate transactions.

The Department of Treasury took public comments this month regarding the proposed changes below (as well as others not noted below).

FIRRMA clarifies the jurisdiction of CFIUS by explicitly adding four types of transactions as covered transactions:

  1. The purchase or lease by, or concession to, a foreign person of certain real estate in the United States;
  2. Non-controlling “other investments” that afford a foreign person an equity interest in and specified access to information in the possession of, rights in, or involvement in the decision making of certain U.S. businesses involved in certain critical technologies, critical infrastructure, or sensitive personal data;
  3. Any change in a foreign person’s rights if such change could result in foreign control of a US business or another investment in certain U.S. businesses; and
  4. Any other transaction, transfer, agreement, or arrangement, the structure of which is designed or intended to evade or circumvent the application of section 721. With respect to the Committee’s expanded jurisdiction over certain real estate transactions and other investments, FIRRMA instructs the Committee to specify criteria to limit the application of that expansion of jurisdiction to certain categories of foreign persons.

FIRRMA also introduces a mandatory declaration requirement in certain circumstances, specifically when a foreign government has a substantial interest. FIRRMA also authorizes CFIUS (through regulations) to mandate the submitting of a declaration for covered transactions involving certain US businesses that produce, design, test, manufacture, fabricate, or develop one or more critical technologies. In both cases, parties have the option of filing a notice rather than submitting a declaration if they so choose.

FIRRMA also provides additional changes and processes not fully described here but in detail at: