On November 7, 2024, the Committee on Foreign Investment in the United States (CFIUS), in coordination with the Department of Defense (DoD), issued a Final Rule that expanded its ability to review certain real estate transactions by foreign persons near more than 60 military bases and installations across 30 states. In addition, CFIUS’s jurisdiction over eight existing military installations already subject to CFIUS review will be expanded. U.S. Treasury Secretary Janet L. Yellen stated in a press release that, “This final rule will significantly increase the ability of CFIUS to thoroughly review real estate transactions near bases and will allow us to deter and stop foreign adversaries from threatening our Armed Forces, including through intelligence gathering.” This action finalizes CFIUS rulemaking from July 2024 and resulted from DoD’s risk and national security assessment of its military installations. See Thompson Hine Update of July 10, 2024.
The final rule enhances CFIUS’s authorities through the following key changes:
- Expands CFIUS’s jurisdiction over certain real estate transactions to include those within a one-mile radius around 40 additional military installations;
- Expands CFIUS jurisdiction over certain real estate transactions to include those within a 100-mile radius around 19 additional military installations;
- Expands CFIUS’s jurisdiction over certain real estate transactions between 1 mile and 100 miles around eight military installations already listed in the regulations;
- Makes technical changes by updating the names of 14 military installations already listed in the regulations to better assist the public in identifying the relevant sites; and
- Make technical changes by updating the locations of seven military installations already listed in the current regulations to better assist the public in identifying the relevant sites.
CFIUS’s jurisdiction over real estate transactions, pursuant to the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), allows CFIUS to review the purchase or lease by, or concession to, a foreign person of real estate in the United States that is in close proximity to a military installation or another facility or property of the U.S. government that: (i) is sensitive for reasons relating to national security; (ii) could reasonably provide the foreign person the ability to collect intelligence on activities being conducted at such an installation, facility, or property; or (iii) could otherwise expose national security activities at such an installation, facility, or property to the risk of foreign surveillance. For additional background see Thompson Hine Update of January 22, 2020.
As noted in the July 2024 Proposed Rule, this Final Rule also amends the definition of the term “military installation” by adding: (i) Space Force bases, stations, and major annexes thereof, containing satellite, telemetry, tracking, or commanding systems; (ii) clarifying text to cover major Army depots, arsenals, and military terminals, as well as Marine Corps installations, logistics battalions, and support facilities.
This Final Rule does not apply retroactively to any transaction for which (1) the completion date is prior to the effective date of this Final Rule; or (2) the parties to the transaction have executed, prior to the effective date, a binding written agreement, or other binding document, establishing the material terms of the transaction. This Final Rule is effective on December 9, 2024.