Reed Smith Client Alerts

On September 27, 2019, ten days after publishing proposed regulations related to the reform of the Committee on Foreign Investment in the United States (CFIUS), senior officials of the U.S. Department of the Treasury and representatives of CFIUS held two public briefings to provide an overview of the proposed rules to stakeholders and to respond to frequently asked questions. Although the officials declined to answer many questions during the briefings, instead directing stakeholders to submit written comments for the Committee’s careful consideration, the Treasury proactively addressed certain aspects of the proposed regulations that have generated considerable confusion, including questions related to the meaning of “substantial interest” by a foreign government and “excepted” foreign persons, among other concerns.

As described in our recent guidance, the Treasury Department issued proposed regulations on September 17, 2019 to comprehensively implement the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) in an effort to strengthen and modernize CFIUS and to better address national security concerns arising from certain investments and real estate transactions. In its subsequent public briefings, officials fielded numerous questions regarding key concepts and terms outlined in the proposed regulations. The Treasury Department declined to answer most questions and repeatedly encouraged stakeholders to submit written comments and hypotheticals in advance of the October 17, 2019 public comment deadline to ensure consideration by the Committee as it finalizes its rules. Notably, however, the Committee provided commentary and insight into certain limited aspects of the proposed regulations, evidencing some of the areas in which stakeholders particularly have identified confusion or ambiguity in the language as drafted.