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U.S. Treasury implements Final FIRRMA Regulations

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Kenneth Rivlin

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Kuang Chiang

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Nick Ognibene

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17 February 2020

This week, new regulations promulgated by the U.S. Department of the Treasury (the Treasury) went into effect to finalize and comprehensively implement the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA). These newly-amended regulations (the Final FIRRMA Regulations) both broaden the jurisdictional scope of the Committee on Foreign Investment in the United States (CFIUS), and institute key exceptions scaling CFIUS’s authority over certain foreign investments.

The new rules represent a marked expansion of CFIUS’s ability to address national security concerns, as CFIUS’s review authority is no longer limited to transactions resulting in foreign control of a U.S. business. As a result of the new rules, CFIUS’s jurisdiction now extends to select noncontrolling covered investments that afford a foreign person specified access, rights, or involvement in certain types of U.S. businesses (31 C.F.R. part 800), as well as select real estate transactions that previously generally fell outside CFIUS’ jurisdiction (31 C.F.R. part 802).