Episode 5: Critical Technologies under CFIUS's "Foreign Investment Risk Review Modernization Act"

2024-09-24 22:41:25

As discussed in previous articles, the U.S. Department of the Treasury issued two regulations (collectively referred to as the "Final Regulations") on January 13, 2020, to further implement the "Foreign Investment Risk Review Modernization Act," which took effect on February 13, 2020. The Final Regulations expanded the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS), granting it the authority to review certain non-controlling investments in U.S. businesses, including those involved in "the production, design, testing, manufacturing, fabrication, or development of one or more critical technologies" (provided other conditions are met).

According to the Final Regulations, "critical technologies" encompass the following categories: (1) defense articles or defense services controlled under the International Traffic in Arms Regulations (ITAR); (2) specific technologies controlled under the U.S. Export Administration Regulations (EAR) (details can be found in the original text); (3) certain nuclear equipment, materials, software, and technology; (4) select agents and toxins; and (5) emerging and foundational technologies as defined under Section 1758 of the "Export Control Reform Act of 2018" (see 50 U.S.C. 4817 for the original text).

Notably, the Final Regulations do not define the scope of emerging and foundational technologies but instead adopt the definition provided under Section 1758 of the "Export Control Reform Act of 2018." The specific scope of these technologies remains to be clarified through future legislative developments.