CFIUS Modernization: Treasury Proposes CFIUS Regulations to Implement Reforms Enacted Under the Foreign Investment Risk Review Modernization Act of 2018

Sullivan & Cromwell LLP - October 7, 2019
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The U.S. Department of the Treasury has issued proposed regulations to implement CFIUS reforms enacted under the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”). Certain provisions of FIRRMA went into effect immediately upon its adoption in August 2018, but many of the provisions of the legislation require regulations to be prescribed by CFIUS before becoming effective.

The proposed rules, which would implement most of the provisions of FIRRMA that have not already gone into effect, have been issued in two separate proposals, both of which are covered in this memorandum:

  • TID Businesses. The first set of regulations would replace the existing CFIUS regulations codified at part 800 of title 31 of the Code of Federal Regulations, and among other things would implement the provisions of the FIRRMA legislation pertaining to certain non-control but non-passive investments in critical technology, critical infrastructure and sensitive personal data businesses (so-called “TID” businesses).
  • Real Estate. The second set of regulations, to be codified at a new part 802 of title 31 of the Code of Federal Regulations, would implement the expansion of CFIUS jurisdiction under FIRRMA to certain real estate transactions.