Reed Smith Client Alerts

On September 17, 2019, in connection with its efforts to strengthen and modernize the Committee on Foreign Investment in the United States (CFIUS), the U.S. Department of the Treasury issued proposed regulations to comprehensively implement the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) and to better address national security concerns arising from certain investments and real estate transactions.

Authors: Michael J. Lowell Lizbeth Rodriguez-Johnson Sarah S. Wronsky Paula A. Salamoun Manasi Venkatesh

The proposed regulations leave intact existing CFIUS authority to review transactions that will result in foreign “control” of a U.S. business, but dramatically expand the Committee’s authority to review non-controlling investments in U.S. businesses and certain real estate transactions.

The Committee will not only retain its pilot program authority to review non-controlling investments by foreign persons in U.S. “critical technologies,” CFIUS jurisdiction will now include review of non-controlling foreign investment in U.S. businesses involving “critical infrastructure” and “sensitive personal data." The proposed regulations also expand CFIUS jurisdiction to include review of certain real estate purchases or leases by, or concessions to, foreign persons regarding sites in or nearby certain sensitive locations.

The public comment period on the proposed regulations will close on October 17, 2019, and final regulations will become effective no later than February 13, 2020.