On Monday, August 13, 2018, President Donald J. Trump signed into law the Foreign Investment Risk Review Modernization Act ("FIRRMA") as part of the wide-reaching John S. McCain National Defense Authorization Act for fiscal year 2019. FIRRMA reforms the Committee on Foreign Investment in the United States ("CFIUS") process used to evaluate national security concerns arising from foreign investment in U.S. businesses.

The final legislation will expand CFIUS's jurisdiction to include several non-controlling transactions in which the investment involves (i) technologies subject to export controls, (ii) critical infrastructure and (iii) the sensitive personal data of U.S. citizens. Additionally, the final legislation amends CFIUS's administrative procedures and appeals to include (i) shorter review procedures for less sensitive transactions, (ii) mandatory filings for certain transactions, (iii) additional requirements for CFIUS's annual report to Congress to increase transparency, (iv) appeals of CFIUS determinations and (v) a filing fee for full notices amounting to no more than either $300,000 or one percent of the value of the transaction.

Commentary / Keith Gerver

FIRRMA represents the most significant overhaul of the CFIUS process since the passage of the Foreign Investment and National Security Act of 2007. While FIRRMA offers new efficiencies for CFIUS transactions, including by introducing a short-form "declaration" process that requires CFIUS to respond to a notification that provides bare-bones details of a transaction within 30 days, it primarily codifies existing CFIUS practices and CFIUS's expansive interpretation of its jurisdiction. Many details will be ironed out only when CFIUS publishes and implements new regulations, a process that likely will take months. Indeed, many of the bill's provisions do not take effect for 18 months, unless the CFIUS chair determines that any necessary structural changes have been made and implementing regulations are in place.

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