The U.S. Department of the Treasury, as chair of the Committee on Foreign Investment in the United States (CFIUS), yesterday issued temporary regulations in connection with the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), which President Trump signed into law in August.  FiRRMA is meant to protect critical American technology and intellectual property from potentially harmful foreign acquisitions.

FIRRMA authorizes CFIUS to conduct pilot programs to implement provisions in the legislation that did not become effective immediately upon enactment.  Full implementation of FIRRMA will occur no later than February 2020.

The pilot program implements authorities that expand the scope of transactions subject to CFIUS review to include certain non-controlling investments in U.S. businesses involved in critical technologies related to specific industries.  The pilot program also makes effective FIRRMA’s mandatory declarations provision for transactions that fall within the scope of the pilot program.  The pilot program will end no later than the date on which the final FIRRMA regulations are fully implemented.

In addition to the pilot program, Treasury issued temporary regulations that make limited updates to CFIUS’s existing regulations, primarily to implement provisions of FIRRMA that became immediately effective upon its enactment.  This will ensure consistency between CFIUS’s regulations and the statute.  These regulations are effective October 11, 2018.

In accordance with FIRRMA, the pilot program will commence on November 10, 2018, 30 days following publication of the regulations in the Federal Register.

For more information see Treasury’s fact sheet and text of the regulations (pilot program regulations and updates to existing regulations).