Policy Issues

CFIUS REFORM

ISSUE

The Foreign Investment Risk Review Modernization Act (FIRRMA) was signed into law by President Trump on August 13, 2018. FIRRMA reforms and modernizes the Committee on Foreign Investment in the United States (CFIUS) review process and represents the first update to the CFIUS statute in more than a decade.

CFIUS is a U.S. interagency committee that conducts national security reviews of foreign investment.

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Position

The Roundtable, working with other industry groups, worked to ensure that the legislation included language exempting real estate located in an “urbanized area” from the criteria of a covered transaction.

Background

The Foreign Investment Risk Review Modernization Act (FIRRMA) was signed into law by President Trump on August 13, 2018. FIRRMA reforms and modernizes the Committee on Foreign Investment in the United States (CFIUS) review process and represents the first update to the CFIUS statute in more than a decade. CFIUS is a U.S. interagency committee that conducts national security reviews of foreign investment.

The measure was part of the National Defense Authorization Act for Fiscal Year 2019 (NDAA) – a compromise $717 billion defense policy bill aimed at building up the military and blunting Chinese foreign investment – which includes language that may affect some foreign purchases and leases of real estate near military and other strategic facilities.

FIRMMA expands the review authority of CFIUS to review national security implications of transactions that could result in control of a U.S. business by a foreign person and to block transactions or impose measures to mitigate any threats to U.S. security.

FIRRMA also expands the list of covered transactions to include some foreign purchases and leases of real estate near military and other strategic facilities.  Responding to concerns raised by The Roundtable and other industry groups, language is also included that exempts real estate located in an 'urbanized area' from the criteria of a covered transaction.  The Census defines an urbanized area as one comprising more than 50,000 people.  The real estate provision contained in Title II, Sec. 201 includes the carve-out for properties in an "urbanized area".

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