White & Case is pleased to announce the release of its CFIUS Pilot Program Covered Transaction Analysis Tool, which provides an online, step-by-step analysis of a transaction in order to assist in determining whether the transaction could be subject to the Committee on Foreign Investment in the United States (CFIUS) pilot program that implements part of the Foreign Investment Risk Review Modernization Act (FIRRMA).
White & Case CFIUS Pilot Program Covered Transaction Analysis Tool
As we previously reported, the Department of the Treasury, which chairs CFIUS, released an interim rule on October 10, 2018. The interim rule establishes a pilot program implementing portions of FIRRMA, which was enacted in August. FIRRMA significantly expands CFIUS’s jurisdiction, but the full scope of CFIUS’s expanded authority will not become effective until CFIUS drafts and publishes its regulations implementing FIRRMA. In the meantime, FIRRMA authorizes CFIUS to conduct pilot programs to implement some of FIRRMA’s new provisions. The first pilot program went into effect on November 10th and expands CFIUS’s jurisdiction to cover investments on a temporary basis—including certain non-controlling, non-passive investments—in companies involved with critical technologies within a specific subset of industries. Our CFIUS Pilot Program Covered Transaction Analysis Tool walks the user through a series of questions to assist in determining whether a transaction falls within the scope of the pilot program.
If a transaction falls within the scope of the CFIUS pilot program, then it is subject to a mandatory filing requirement referred to as a declaration—and the penalties for failing to comply are significant. Therefore, an accurate and thorough pilot-program jurisdictional analysis is paramount to any transaction possibly within the pilot program’s scope. To that end, our CFIUS Pilot Program Covered Transaction Analysis Tool guides the user through the essential elements of CFIUS’s jurisdiction under the pilot program in order to assist the user in determining whether the transaction could fall within the scope of the pilot program. As with any such tool, the CFIUS Pilot Program Covered Transaction Analysis Tool is intended as a guide for informational purposes only—it is not a substitute for legal advice, does not constitute legal advice, and does not provide a conclusive determination. Further, this tool is based upon interim regulations and guidance provided by CFIUS, and therefore remains subject to change based on regulatory changes and further guidance from CFIUS. Users should engage CFIUS counsel to discuss regulatory compliance with specific transactions.
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