Effective October 15, 2020, the Department of the Treasury’s September 15 final rule (“Rule”) will modify certain regulations of the Committee on Foreign Investment in the United States (CFIUS) pursuant to the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA). In a previous blog post, we noted that the Rule would change the requirements for making mandatory disclosures to the U.S. government prior to completing certain types of foreign investments in, or acquisitions of, certain types of U.S. businesses. These changes are comprehensive and will require parties entering into these types of transactions to undertake new due diligence efforts to ensure they are in compliance with CFIUS’s strict liability requirements and avoid penalties for noncompliance. This update describes the underlying legislation as well as the legal and practical implications of the Rule.
Key Notes:
- On September 15, 2020, the Department of the Treasury published in the Federal Register a final rule amending the disclosure regulations of the Committee on Foreign Investment in the United States (CFIUS) pursuant to the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA).
- The final rule significantly alters the mandatory CFIUS filing requirements relating to foreign persons’ investments in or acquisitions of U.S. businesses involving critical technologies, critical infrastructure or sensitive personal data.
- The final rule comes into effect on October 15, 2020.
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