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September 18, 2019

Stroock Special Bulletin

By: Chris Griner, Gregory Jaeger, Shannon Reaves, Erin Bruce Iacobucci

Last year, Congress passed the Foreign Investment Risk Review Modernization Act (FIRRMA), which provides sweeping new authority for the Committee on Foreign Investment in the United States (CFIUS). Yesterday the U.S. Department of the Treasury published two sets of proposed regulations to implement this new authority with respect to “covered transactions” and certain real estate transactions.

The regulations give high priority to protecting the defense industrial base – but also provide some much needed transparency. Treasury particularly provides further clarification for investment funds. As we mentioned in our last client alert, Treasury plans to exempt trustworthy investors from CFIUS’s expanded jurisdiction over certain non-controlling investments and real estate transactions – likely investors from a select group of allied countries that have a record of compliance with U.S. law and cooperation with CFIUS. The scope of this exemption has not yet been announced, but Treasury says the favored nation list will be short.

Finally, CFIUS makes clear its jurisdiction over outbound joint ventures – a topic heavily debated during the passage of FIRRMA – when a joint venture involves the contribution of a “U.S. Business.”

The Stroock team is reviewing the regulations in more detail and will be following up with targeted analysis.

The public may submit comments electronically through the government’s eRulemaking Portal at or by mailing in their comments to: U.S. Department of the Treasury, Attention: Thomas Feddo, Assistant Secretary for Investment Security, 1500 Pennsylvania Avenue, NW, Washington, DC 20220. Written comments must be received by October 17, 2019. Contact us if you are interested in submitting comments, and we will be happy to assist.

In the meantime should you have any questions or concerns or would like to consult an attorney on how these regulations might affect your company, please contact:

Chris Griner

Gregory Jaeger

Shannon Reaves

Erin Bruce Iacobucci

This article is for general information purposes only. It is not intended as legal advice, and you should not consider it as such.



Gregory Jaeger

Special Counsel

Washington, DC


Erin Bruce Iacobucci

National Security Consultant

Washington, DC