November 24, 2008

CFIUS Issues Final Regulations

From Linda DeMelis: Last week, the Department of the Treasury’s Committee on Foreign Investment in the United States (known as “CFIUS”) issued final regulations governing national security reviews of foreign investments in US companies. The new regulations – issued to implement amendments adopted by the “Foreign Investment and National Security Act of 2007” – largely track the proposed regulations issued in April – and are the most significant changes to the CFIUS rules since their adoption in ‘91.

The new rules encourage parties to consult with CFIUS in advance of filing formal notification (an existing CFIUS “best practice”). Significantly, the new rules do not define “national security,” or what constitutes “control” by a foreign investor; nor do they provide special rules for sovereign wealth funds. CFIUS retains the flexibility to review each transaction on a case-by-case basis.

We have posted memos analyzing the new regulations on our “National Security Considerations” Practice Area.