Page 30 - The CFIUS Book

THE CFIUS BOOK
1.3. Question 3: Is Yours a Mandatory Filing?
Under FIRRMA, for the first time, certain CFIUS filings will be mandatory. CFIUS will require a “light” filing for transactions where a foreign entity in which a foreign government has a substantial interest acquires a substantial interest in a U.S. company involved in critical technology or critical infrastructure. CFIUS, by promulgating regulations, may also designate other investments in certain critical technology as requiring mandatory filings.
Many of the details of that requirement remain to be spelled out in regulations due by February 2020. CFIUS will define what constitutes “substantial interest” and will provide guidance on what constitutes a critical technology or critical infrastructure company.
CFIUS will also lay out the requirements and process for its proposed light filing. Under FIRRMA, the light filing will be a short form “declaration” that would not be longer than five pages and that CFIUS would be required to act on within 30 days of receipt. CFIUS could respond by approving the transaction, requesting submission of a full written notice, initiating its own review, or blocking the transaction.
However, CFIUS may waive the required declaration for foreign entities from countries with friendly governments. The Committee is authorized to define that list and will do so in forthcoming regulations. Based on other trade regulations making distinctions for friendly countries, we expect that the waiver will include NATO countries, as well as South Korea, Japan, Australia, and New Zealand (sometimes called the NATO+ countries).
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