On March 9, 2020 the Department of the Treasury (Treasury) published in the Federal Register proposed regulations to establish a fee for parties filing a voluntary notice of certain transactions for review by the Committee on Foreign Investment in the United States (CFIUS). The regulation would establish a fee for both “covered transactions” involving investments in or acquisitions of U.S. businesses and “covered real estate transactions.” Treasury is interested in comments from the public on the impact of the proposed tiered fixed-fee structure and whether additional tiers or additional features should be considered. Comments are due by April 8.
The proposed fees would be the same for voluntary notices filed with respect to both covered transactions and covered real estate transactions. Notably, persons filing both mandatory short-form declarations or voluntary short-form declarations to CFIUS would be exempt from the filing fees.
The proposed tiered fixed-fee structure is the following:
|Value of the transaction||Fee|
|Less than $500,000||No fee|
|Equal to or greater than $500,000
but less than $5,000,000
|Equal to or greater than $5,000,000
but less than $50,000,000
|Equal to or greater than $50,000,000
but less than $250,000,000
|Equal to or greater than $250,000,000
but less than $750,000,000
|Equal to or greater than $750,000,000||$300,000|
Treasury commented that it believes the proposed fee structure “will not discourage filings and will allow parties to continue the practice of determining whether to file a voluntary written notice based on an evaluation of the facts and circumstances of the transaction.” Treasury “expects that the filing fee will represent a relatively small proportion of the total transaction costs associated with any given transaction.”
For transactions involving payment in securities, through non-cash assets, by services, or by other means, the proposed regulation sets forth the following guidelines for determining transaction value for purposes of the filing fee:
- For securities traded on a national exchange, the transaction value would be determined by the last published closing price of the securities prior to the date of filing of the CFIUS notice;
- For non-cash assets, interests, services, or other means, the transaction value would be the fair market value of those items as of the date of notice filing with CFIUS;
- For a loan or financing agreement, the transaction value would be the cash value of the loan or financing agreement;
- For conversions of a contingent equity interest previously acquired by a foreign person, the value of the transaction would include the initial purchase by or on behalf of the foreign person to obtain the equity interest in addition to any other payments made; and
- With respect to covered real estate transactions, for leases and concessions, the value of the transaction would be the sum of the consideration, including lease inducements, fixed payments, certain variable lease payments, and other types of identifiable consideration applicable to real estate transactions.
Comments may be submitted via electronic submission using the Federal government electronic portal at www.regulations.gov on Docket No. TREAS-DO-2020-0008 or RIN 1505-AC65; or via mail to U.S. Department of the Treasury, Attention: Laura Black, Director of Investment Security Policy and International Relations, 1500 Pennsylvania Avenue N.W., Washington, D.C. 20220.