CFIUS Proposes Changes To Mandatory Filing Requirements

The U.S. Treasury Department this week published draft regulations changing the requirements for mandatory CFIUS filings for transactions in which a foreign person acquires or invests in a U.S. critical technology company. Under the proposed rule, the trigger for the mandatory CFIUS filing requirement would depend on whether U.S. export licenses are required for shipments of the U.S. target's products or technology to the foreign investor's country of origin. This would replace the current system in which a mandatory filing is determined, in part, by whether the U.S. company uses, or designs its critical technology for use, in one of 27 industries identified in the CFIUS regulations based on their classification under the North American Industry Classification System (NAICS). The proposed rule removes some of the guesswork from the current NAICS-based rules, which are generally self-declared by U.S. companies. By tying the criteria for mandatory declarations to