CFIUS Introduces Pilot Program for Mandatory Declarations of Critical Technology Investments

On October 10, 2018, the Department of the Treasury issued interim regulations for the Committee on Foreign Investment in the United States to conduct a pilot program implementing provisions relating to critical technologies of the Foreign Investment Risk Review Modernization Act of 2018, which recently amended the Exon-Florio amendments to the Defense Production Act of 1950.

The Department of the Treasury also released amendments to CFIUS’s regulations effective October 11, 2018 to implement the immediately effective portions of FIRRMA.

Section 1727(c) of FIRRMA authorizes CFIUS to conduct one or more pilot programs to implement any authority provided pursuant to any provision of, or amendment made by, FIRRMA that did not take effect immediately upon enactment. The newly issued Interim Regulations bring into effect a pilot program implementing enhanced, and in many cases mandatory, review of transactions involving “critical technologies” (generally, export-controlled technologies) used by the target in, or designed by the target for, one or more of a list of specified industries. The pilot program takes effect on November 10, 2018.