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FIRRMA/CFIUS Legislation Enacted into Law

President Trump on 13 August signed into law a defence authorisation bill that also includes the Foreign Investment Risk Review Modernization Act (FIRRMA) to reform and expand the operation of the Committee on Foreign Investment in the United States (CFIUS). “Glad to see FIRRMA signed into law today,” said U.S. Treasury Secretary Steve Mnuchin. “It will strengthen CFIUS and enhance the Government’s capacity to protect critical technology while keeping the U.S. open to investment,” he noted. FIRRMA expands the transactions subject to CFIUS review to include non-controlling investments and certain real estate deals. The law also increases funding and staff levels for CFIUS and will allow short-form filings. The review period for a CFIUS notice will be a maximum of 45 days, rather than the previous 30 days.

The U.S. Treasury Department has posted on its website a document with frequently asked questions on FIRRMA. Treasury claims that CFIUS “remains focused exclusively on national security” by examining the  effects of a transaction and assessing the impact of those effects on U.S. national security and stresses that FIRRMA “will help CFIUS protect our national security from emerging risks.” The agency adds that many of the final provisions have not yet been developed, noting that “FIRRMA allows CFIUS to conduct pilot programs to implement provisions of the legislation that are not immediately effective.” The scope and procedures of any pilot programme will be published in the Federal Register at some yet-to-be-determined date. Certain provisions of FIRRMA have already entered into force but others may take up to 18 months to be implemented, with the specifics to be announced in the Federal Register.

FIRRMA also establishes a permanent statutory footing for the U.S. export control regime. The new provisions provide for the U.S. Department of Commerce to set up a new inter-agency panel to determine which “emerging” technologies should be restricted for export to other countries. The only section of FIRRMA specifically related to mainland China is a reporting requirement on mainland Chinese investment in the United States.

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