Implementing FIRRMA: Highlights from CFIUS’ New Proposed Regulations

On September 24, 2019, the U.S. Treasury Department, as chair of the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”), issued two proposed regulations (“Proposed Regulations”) to further implement the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”). Historically, CFIUS was empowered to review transactions that resulted in a foreign acquisition of control over a U.S. business to determine the potential impact on U.S. national security. Pursuant to FIRRMA, at more than 300 pages in length, the Proposed Regulations expand CFIUS’ jurisdiction to cover non-passive but non-controlling investments, whether direct or indirect, in U.S. businesses involved in critical technology, critical infrastructure or sensitive personal data, and certain real estate transactions. The Proposed Regulations also indicate that, for the first time, investors from certain “Excepted Foreign Countries" may receive preferential treatment, including in certain circumstances exemption from CFIUS review.

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