Mandatory CFIUS Filings Under the Final FIRRMA Regulations

The final regulations (“Final Rules”) just issued by the Committee on Foreign Investment in the United States (“CFIUS”) extend the range of transactions subject to mandatory filings and revise and replace the interim pilot program that instituted mandatory CFIUS filings for certain critical technology transactions. As detailed below, mandatory filings are generally required when entities substantially controlled by a foreign government acquire a business involved in critical Technology, critical Infrastructure, or sensitive personal Data of U.S. citizens (together, “TID Businesses”), or any foreign entity acquires a qualifying interest in a business involved with a specified list of critical technologies.

The Final Rules provide for a short declaration, but submission of a full CFIUS notification may be more efficient in many cases. The Final Rules were released on January 13, 2020, go into effect on February 13, 2020, and implement most of the elements of the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”). This note provides an overview of U.S. businesses and transactions for which CFIUS filings may be required under the Final Rules, exemptions from these requirements, and alternative processes for submitting required filings to CFIUS.

The Final Rules’ treatment of transactions requiring mandatory CFIUS filings is highly nuanced; whether a filing is required requires a fact-specific analysis. If a CFIUS filing is required, deciding whether to submit a short-form declaration or a full notice can also have important ramifications. We strongly recommend that prospective parties consult with the counsel listed to the right when assessing whether a mandatory CFIUS filing is in order and how it should be undertaken.