The U.S. Department of the Treasury intends to revise the "Foreign Investment Risk Review Modernization Act."

2024-09-24 22:42:19

On May 20, 2020, the U.S. Department of the Treasury issued a proposed regulation aimed at further amending the implementing regulations of the "Foreign Investment Risk Review Modernization Act" (FIRRMA). Among other things, the proposed regulation suggests revisions to the scope of mandatory filings with the Committee on Foreign Investment in the United States (CFIUS) for certain non-controlling investments in U.S. businesses. Earlier this year, the U.S. Department of the Treasury released two final regulations intended to implement FIRRMA, which stipulate that certain non-controlling investments in U.S. businesses engaged in "the production, design, testing, manufacturing, fabrication, or development of one or more critical technologies" for specific industries must be mandatorily filed with CFIUS (provided other conditions are met). The determination of these specific industries was initially based on the North American Industry Classification System (NAICS). The proposed regulation plans to eliminate NAICS as the criterion for industry determination and instead base the inclusion of critical technology applications under CFIUS's mandatory review on whether the export, re-export, transfer, or re-transfer of such critical technologies requires authorization from the U.S. government. This proposed regulation is part of the FIRRMA rule-making process and is currently open for written comments, with the deadline set for June 22, 2020.