Proposed CFIUS change promises ‘broadens rule and adds complexity’
Filings with CFIUS, the Committee on Foreign Investment in the United States, may become more complex and demand greater attention if a proposed rule is implemented which would tighten up the requirements for declaring foreign investment transactions ‘involving a U.S. business that produces, designs, tests, manufactures, fabricates, or develops one or more critical technologies.’
In a notice in the Federal Register, the Treasury explains that the proposed rule
‘revises the declaration requirement for certain critical technology transactions so that it is based on whether certain U.S. government authorizations would be required to export, re-export, transfer (in country), or retransfer the critical technology or technologies produced, designed, tested, manufactured, fabricated, or developed by the U.S. business to certain transaction parties and foreign persons in the ownership chain.’
‘In focusing on export control requirements for the critical technologies,’ says the notice, ‘ the proposed rule leverages the national security foundations of the established export control regimes, which require licensing or authorization in certain cases based on an analysis of the particular item and end user, and the particular foreign country for export, re-export, transfer (in country), or retransfer.’
In order to accomplish this, it amends § 800.104 (applicability rule) and § 800.401 (mandatory declarations) and introduces the new definitions of ‘U.S. regulatory authorization’ and ‘voting interest for purposes of critical technology mandatory declarations.’
Written comments to the consultation must be received by 22 June.
The proposed rule is at:
