Parties to specified types of transactions involving foreign investment in the U.S. must submit mandatory declarations to the federal government under a pilot program implementing a law enacted in 2018. Parties to foreign investment transactions not subject to the new program should consider submitting such declarations voluntarily.

The Committee on Foreign Investment in the United States, an interagency committee created in 1975, has the authority to review, block, and even unwind certain transactions involving foreign investments in U.S. companies or operations that may jeopardize U.S. national security. It is chaired by the Treasury secretary and includes 16 other members representing the departments of Defense, Homeland Security, State, and Commerce as well as other agencies.

CFIUS’ powers were greatly expanded by the 2018 Foreign Investment Risk Review Modernization Act, which among other things broadened the committee’s jurisdiction to include emerging and foundational technologies, added new national security factors for CFIUS to consider, and strengthened CFIUS’ ability to protect critical infrastructure from foreign government disruption.

(Click here to register for ST&R’s Feb. 28 webinar on the impact of these expanded authorities.)

FIRMMA also created a requirement for parties to submit a mandatory declaration (essentially a prior notification filing) to CFIUS for certain investments by non-U.S. individuals in any U.S. business that (1) owns, operates, manufactures, supplies, or services critical infrastructure, (2) produces, designs, tests, manufactures, fabricates, or develops one or more critical technologies, or (3) maintains or collects sensitive personal data of U.S. citizens that may be exploited in a manner that threatens national security.

In November 2018 the Treasury Department initiated a pilot program to implement this mandatory declaration requirement. Under this pilot, mandatory declarations are required for any investment in a U.S. business that will result in any of the following.

- access by the foreign individual to material nonpublic technical information related to a critical technology that is in the possession of the U.S. business

- the foreign individual receiving membership or observer rights (including rights of nomination) on the board of directors or equivalent governing body of the U.S. business

- any involvement by the foreign individual in substantive decision making of the U.S. business regarding the use, development, acquisition, or release of a critical technology

For purposes of this requirement, “critical technology” is defined as any of the following.

- an export-controlled defense article or defense service (as defined under the International Traffic in Arms Regulations) or an item subject to export control under Nuclear Energy Commission rules

- an export-controlled commercial or dual-use item controlled under the Export Administration Regulations for reasons of regional stability or surreptitious listening as well as under multilateral regimes (including for reasons of national security; nonproliferation of nuclear, chemical, or biological weapons; or missile technology)

- a select agent or toxin

- an emerging and foundational technology as defined in forthcoming Department of Commerce regulations and controlled under the EAR

In addition, this pilot program applies only to 27 industries (specified by North American Industry Classification System code) specifically designated by Treasury. Examples include aircraft manufacturing, computer manufacturing, and guided missile and space vehicle manufacturing (see below for a full list).

Parties to foreign investment transactions should have a clear understanding of whether their transactions involve a critical technology and whether the U.S. company or operations being sold fall under one of the 27 NAICS codes. If so, a mandatory declaration to CFIUS may be required.

If not, parties should weigh the advisability of submitting a voluntary declaration. If there is any possibility that CFIUS may be interested in a transaction, a voluntary declaration will protect the filing parties against CFIUS later reviewing and possibly unwinding the transaction.

Pilot program industries

NAICS code

Aircraft manufacturing


Aircraft engine and engine parts manufacturing


Alumina refining and primary aluminum production


Ball and roller bearing manufacturing


Electronic computer manufacturing


Guided missile and space vehicle manufacturing


Guided missile and space vehicle propulsion unit and propulsion unit parts manufacturing


Military armored vehicle, tank, and tank component manufacturing


Nuclear electric power generation


Optical instrument and lens manufacturing


Other basic inorganic chemical manufacturing


Other guided missile and space vehicle parts and auxiliary equipment manufacturing


Petrochemical manufacturing


Powder metallurgy part manufacturing


Power, distribution, and specialty transformer manufacturing


Primary battery manufacturing


Radio and television broadcasting and wireless communication equipment manufacturing


Research and development in nanotechnology


Research and development in biotechnology


Secondary smelting and alloying of aluminum


Search, detection, navigation, guidance, aeronautical, and nautical system and instrument manufacturing


Semiconductor and related device manufacturing


Semiconductor machinery manufacturing


Storage battery manufacturing


Telephone apparatus manufacturing


Turbine and turbine generator set units manufacturing


For more information on CFIUS, please contact Kristine Pirnia at (202) 730-4964 or Josh Rodman at (202) 730-4961.

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