On May 21, 2020, the Department of Treasury issued a proposed rule that would revise certain provisions in the regulations that implement the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”). Specifically, this proposed rule is intended to revise the scope of the mandatory declaration with the Committee on Foreign Investment in the United States (“CFIUS”) involving certain non-controlling foreign investments in certain US business, among other things.
The Department of Treasury previously issued final rules implementing FIRRMA which, among other things, mandate declarations with CFIUS for certain non-controlling investments in U.S. businesses that produce, design, test, manufacture, fabricate, or develop one or more critical technologies in connection with any of the 27 enumerated industries, which industries are identified by reference to the North American Industry Classification System (“NAICS”). The proposed rule revises such declaration requirement by removing the NAICS code criteria, while basing the industry identification on whether certain U.S. government authorizations would be required to export, re-export, transfer, or retransfer the critical technology at issue.
This proposed rule is part of FIRRMA’s rulemaking process, and is currently taking written comments until June 22, 2020.