CFIUS Clarifies Its Investment Funds Exceptions (Via Additions to Its FAQs for the Critical Technology Pilot Program)
The U.S. Department of the Treasury, which chairs the Committee on Foreign Investment in the United States (CFIUS), updated its “FAQs on FIRRMA [Foreign Investment Risk Review Modernization Act] Critical Technology Pilot Program” — the pilot program currently in effect that creates mandatory CFIUS filings for certain transactions — with four new clarifications addressing investment funds. There has been much discussion among CFIUS practitioners and their clients about the extent to which limited partner (or equivalent) foreign investors in funds can potentially trigger the new requirement for CFIUS filings, depending upon the investment. The updated FAQs confirm that the ongoing CFIUS pilot program applies to investments “by or through investment funds” and that the broader investment fund exceptions of FIRRMA also apply to the pilot program.
While the updated FAQs provide some new guidance on the specific circumstances in which an investment fund transaction would, or would not, be covered by the pilot program, an assessment of whether such a transaction, involving a foreign limited partner (or equivalent), triggers the requirement to file with CFIUS is highly fact-specific and should be performed on a case-by-case basis, especially if the target U.S. business otherwise meets the requirements of the pilot program.
If you would like further clarification, please contact any of the following Stroock professionals for experienced guidance on the evolving CFIUS regulations:
This article is for general information purposes only. It is not intended as legal advice, and you should not consider it as such.
 U.S. Department of the Treasury, “FAQs on FIRRMA Critical Technology Pilot Program,” available at: https://home.treasury.gov/system/files/291/-Pilot-Program-FAQs.pdf.
 For information about the requirements of the pilot program, see Stroock & Stroock & Lavan LLP – “New Rules for New Deals: What you Need to Know About the CFIUS Pilot Program,” Dec. 4, 2018, available at: https://www.stroock.com/publication/new-rules-for-new-deals-what-you-need-to-know-about-the-cfius-pilot-program/.