As anticipated following the August enactment of the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), the Department of the Treasury has issued new regulations implementing changes to the Committee on Foreign Investment in the United States (CFIUS).
CFIUS Amendments
The first, an interim rule issued October 11, 2018 (83 FR 51316), primarily makes technical amendments to the CFIUS Part 800 regulations. These changes include:
- Extending CFIUS review period from 30 to 45 days,
- Revising various definitions to be consistent with FIRRMA,
- Providing examples of covered transactions,
- Implementing electronic submissions,
- Allowing parties to stipulate that a transaction is a covered transaction, and
- Revising language regarding violations and remedies.
This rule was effective immediately and comments may be submitted through November 10, 2018. Please see the Federal Register Notice for more information on how to comment.
Pilot Program
The second notice, also issued on October 11, 2018 (83 FR 51322) implements a “pilot program” expanding CFIUS review and mandatory declarations to a specific list of covered industries when dealing with “critical technologies.”
Under the new rule, “critical technologies” include:
- Defense articles or defense services included on the United States Munitions List (USML) controlled by the Department of State,
- Commerce Control List (CCL) items controlled pursuant to multilateral regimes, for regional stability, or surreptitious listening by the Department of Commerce,
- Nuclear equipment and technology controlled by the Department of Energy,
- Nuclear facilities, equipment, and material controlled by the Nuclear Regulatory Commission, and
- Select agents and toxins controlled by the Department of Agriculture or the Department of Health and Human Services.
Companies in or developing products for the industries listed in the new Annex A to Part 801 are covered by the pilot program as follows, including North American Industry Classification System (NAICS) codes:
| Industry | NAICS Code |
| Aircraft Manufacturing | 336411 |
| Aircraft Engine and Engine Parts Manufacturing | 336412 |
| Alumina Refining and Primary Aluminum Production | 331313 |
| Ball and Roller Bearing Manufacturing | 332991 |
| Computer Storage Device Manufacturing | 334112 |
| Electronic Computer Manufacturing | 334111 |
| Guided Missile and Space Vehicle Manufacturing | 336414 |
| Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing | 336415 |
| Military Armored Vehicle, Tank, and Tank Component Manufacturing | 336992 |
| Nuclear Electric Power Generation | 221113 |
| Optical Instrument and Lens Manufacturing | 333314 |
| Other Basic Inorganic Chemical Manufacturing | 325180 |
| Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing | 336419 |
| Petrochemical Manufacturing | 325110 |
| Powder Metallurgy Part Manufacturing | 332117 |
| Power, Distribution, and Specialty Transformer Manufacturing | 335311 |
| Primary Battery Manufacturing | 335912 |
| Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing | 334220 |
| Research and Development in Nanotechnology | 541713 |
| Research and Development in Biotechnology (except Nanobiotechnology) | 541714 |
| Secondary Smelting and Alloying of Aluminum | 331314 |
| Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing | 334511 |
| Semiconductor and Related Device Manufacturing | 334413 |
| Semiconductor Machinery Manufacturing | 333242 |
| Storage Battery Manufacturing | 335911 |
| Telephone Apparatus Manufacturing | 334210 |
| Turbine and Turbine Generator Set Units Manufacturing | 333611 |
Transactions in these areas are covered by the pilot program when the investment would give a foreign investor:
- Access to material nonpublic technical information;
- Membership, observer, or nomination rights on the board of directors; or
- Involvement in substantive decision-making regarding critical technology.
This rule will take effect on November 10, 2018 and comments may be submitted through that date. Please see the Federal Register Notice for more information on how to comment.
The Department of the Treasury has also published a press release and fact sheet that summarize these changes.
The pilot program is scheduled to end no later than March 5, 2020, once replaced by a full expansion of CFIUS review.