CFIUS Guidelines for Mandatory Critical Technology Reporting

We previously reported on the updates made to the implementing legislation of the Committee on Foreign Investment in the United States (“CFIUS”) by the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”).  Among other things, FIRRMA mandated reporting of transactions that involve acquisition of critical technologies in the United States.  On October 11, 2018, the Department of the Treasury (the “DOT”) published interim regulations for CFIUS to conduct a pilot program on such technologies, effective November 10, 2018.  Among other things, the new rules mandate that notice must be given to CFIUS at least 45 days before the expected completion date of the transaction for non-passive foreign investment in businesses in some 27 industries deemed critical to the United States, as set forth in the North American Industry Classification System (NAICS).  The industries are listed in the regulations, and include, without limitation, certain aircraft industries, guided missiles, petrochemicals and semiconductors.  Not surprisingly, the regulations are highly technical, and no doubt there will be a small cottage industry in determining whether they apply to a particular transaction.  That said, it is likely that the DOT and CFIUS will take an expansive view of the application of the regulations.