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US proposes new foreign investment rules

22 September 2019
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The US Treasury Department has unveiled proposed regulations that would implement a congressional mandate to beef up the country’s foreign investment review process.

The proposed regulations would implement the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), which Congress passed last year to reform the Committee on Foreign Investment in the United States (CFIUS) process. CFIUS is an interagency committee chaired by the treasury secretary that reviews whether foreign investment transactions would harm US national security.

FIRRMA gives CFIUS the ability to scrutinize non-controlling investments in US businesses, not just controlling investments. Proponents say potential adversaries, especially China, have made non-controlling investments in US companies to avoid CFIUS reviews and still gain access to US technology.

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