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Aug 13, 2018

The Foreign Investment Risk Review Modernization Act of 2018

The US President signed into law the Foreign Investment Risk Review Modernization Act 2018 (FIRRMA) on 13 August 2018. It reforms and modernizes the Committee on Foreign Investment in the United States (CFIUS) review process of inward investment and expands the jurisdiction of the CFIUS to address growing national security concerns.

Notably, FIRRMA allows to review entire industries or sectors rather than an individual merger and acquisition activity. The scope of covered transactions includes (1) real estate transactions, (2) Non-controlling investment in Critical Technology and critical infrastructure, (3) Changes in ownership structures, resulting in foreign control of a U.S. businesses and (4) any other transaction, transfer, agreement, or arrangement designed to circumvent CFIUS jurisdiction.

Also, FIRRMA provides, inter alia, for an abbreviated “light filing” process through a new “declarations” procedure; expands CFIUS's timelines from 30 to 45 days; and strengthens requirements on the use of mitigation agreements.

FIRRMA will be fully implemented no later than February 2020.

Type: Entry and establishment (Approval and admission)

Industry: Not industry specific