FIRRMA Pilot Program: Foreign Investment & National Security

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Overview: On November 10th, the Committee on Foreign Investment in the United States (CFIUS) launched pilot programs to expand the scope of transaction subject to review as part of the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), which covers all FIRRMA-defined critical technologies including emerging and foundation technologies controlled pursuant to the Export Control Reform Act of 2018 in addition to 27 “Pilot Program Industries” identified by their North American Industry Classification Systems (NAICS) codes.

Details: FIRRMA strengthens and modernizes CFIUS’s ability to protect national security while preserving the longstanding open investment policy of the United States. CFIUS determined that the new and evolving threats to U.S. national security arising from certain foreign investments in U.S. businesses in particular industries require immediate attention. The pilot program allows CFIUS to address these risks to U.S. national security, and in the process, gain insights that will inform the development of final regulations to fully implement FIRRMA.

The pilot program expands CFIUS review to include certain non-controlling investments in U.S. businesses involved in critical technologies related to specific industries. The pilot program also makes effective FIRRMA’s mandatory declarations provision for transactions that fall within the scope of the pilot program. Parties that are required to file with CFIUS and do not do so can be assessed a civil monetary penalty up to the value of the transaction.

More info: Pilot Program FAQFIRRMA FAQFIRRMA Fact Sheet and more can be accessed on Treasury’s website.