CFIUS Pilot Program: Immediate Implications For Investors And Investment Targets

On October 10, 2018, the U.S. Department of the Treasury issued temporary regulations—a "pilot program"—to implement certain provisions of the Foreign Investment Risk Review Modernization Act ("FIRRMA"), signed into law by President Donald Trump on August 13, 2018.¹ Among other things, FIRRMA expanded the jurisdiction of the Committee on Foreign Investment in the United States ("CFIUS" or the "Committee") to include new categories of covered transactions and authorized CFIUS to make certain filings mandatory.

The announcement of the October 10 pilot program represents a dramatic and rapid assertion by CFIUS of new authority granted to it under FIRRMA. Under the pilot program, non-controlling foreign investments in certain U.S. industries (electronics, chemical, and semiconductor manufacturing, and research and development in biotechnology, among others)—which, prior to FIRRMA, were outside the scope of the Committee's jurisdiction—will be subject to mandatory CFIUS