Four Republican members of the House Financial Services Committee praised the Treasury Department’s proposed regulations for the Foreign Investment Risk Review Modernization Act but also criticized several key areas, according to comments released Oct. 29. The comments were signed by Reps. Patrick McHenry, R-N.C., Andy Barr, R-Ky., French Hill, R-Ark., and Steve Stivers, R-Ohio.
Companies and trade groups warned the Treasury Department that the proposed regulations for the Foreign Investment Risk Review Modernization Act may repel foreign investors and customers, fails to clearly define “critical technologies” and could place trusted trading partners at disadvantages, according to comments due Oct. 17.
The Congressional Research Service issued an Oct. 3 report detailing how the Foreign Investment Risk Review Modernization Act regulations will reform the Committee on Foreign Investment in the U.S. The report explains the new powers FIRRMA grants CFIUS, what changes are proposed, potential issues the regulations may pose for Congress, and how FIRRMA impacts reporting procedures and export controls. The Treasury Department released the proposed FIRRMA regulations in September, and comments are due Oct. 17 (see 1909180018).
Proposed FIRRMA Regulations Introduce New Rules Expanding Jurisdiction, Postpone Decisions on Others
Key elements of the Treasury Department’s recently released proposed regulations on the Foreign Investment Risk Review Modernization Act include an expanded jurisdiction to review “non-controlling investments” and certain exemptions to reviews, Crowell Moring said in a Sept. 19 post.
The Treasury Department released its proposed regulations for the Foreign Investment Risk Review Modernization Act of 2018, granting expanded authorities to the Committee on Foreign Investment in the United States, Treasury said in a Sept. 17 press release.
The Senate will likely confirm Tom Feddo as a top official for the Committee on Foreign Investment in the U.S., a “positive and timely development” for companies involved in foreign investment compliance, according to an Aug. 19 post from Arent Fox. Feddo is expected to be named the first assistant secretary of the Treasury for investment security. The position was created in 2018 to increase the authority of CFIUS when it enacted the Foreign Investment Risk Review Modernization Act, the post said.
Vinson & Elkins hired Damara Chambers, previously at Covington & Burling, as a partner and co-leader of the firm's national security practice, Vinson & Elkins said in a news release. "Chambers focuses her practice on national security reviews conducted by [the Committee on Foreign Investment in the United States] and other agencies, including the Defense Security Service and the Department of Energy in connection with the mitigation of foreign ownership, control or influence (FOCI), and the State Department in connection with reviews pursuant to the International Traffic in Arms Regulations," the firm said.
China’s progress toward its satellite ambitions show the need for stricter export controls, stronger collaboration on those controls with U.S. allies, and more staffing and funding for U.S. enforcement agencies, panelists said during a meeting on U.S. space-related export controls. The discussion, part of a series of panels hosted by the U.S.-China Economic and Security Review Commission on April 25, was billed as a conversation on China’s military-civil fusion. Lorand Laskai, a researcher at the Georgetown Center for Security and Emerging Technology, presented a dire outlook for the state of U.S.-China commercial space competition, saying China poses a major threat to U.S. export controls.
The Department of Justice is drawing closer to completing regulations for the Foreign Investment Risk Review Modernization Act of 2018, Deputy Assistant Attorney General Adam Hickey said, and is “working closely” with the Treasury Department to develop regulations for the “expanded authority” it grants the Committee on Foreign Investment in the United States (CFIUS). Speaking at the National Conference on CFIUS and Team Telecom on April 24, Hickey presented FIRRMA and CFIUS as making the U.S. a more “attractive” alternative for investment than China while criticizing that country’s “foreign ownership restrictions, joint venture requirements” and “vague” approval processes that allow the Chinese government to “pressure [U.S. companies] to transfer their technology as a condition of market access.”
A Republican and a Democratic representative are urging the House Appropriations Subcommittee on Financial Services to fully fund the Committee on Foreign Investment in the United States (CFIUS) in the wake of the president's 2019 budget request. Reps. Denny Heck, D-Wash., and Mike Gallagher, R-Wis., were planning to send a letter to the subcommittee about the critical role played by CFIUS, which was reformed in 2018 when Congress passed the Foreign Investment Risk Review Modernization Act (FIRRMA). FIRRMA expanded the jurisdiction of CFIUS when the committee reviews transactions by foreign entities in the U.S. to determine their effect on national security, according to the Treasury Department. Among many changes, FIRRMA expanded which transactions CFIUS can review and allowed it to undertake lengthier investigations. In their letter, the representatives stressed the importance of granting “dedicated funds” to CFIUS, as the Treasury recommended in its budget request. “Lack of resources would impair how effectively CFIUS can enforce mitigation agreements and its ability to maintain awareness of relevant non-notified transactions,” the letter says.