The Treasury Department issued an interim final rule that "establishes a fee for parties filing a formal written notice of a transaction for review by the Committee on Foreign Investment in the United States ("CFIUS")." The interim final rule, which was published in the Federal Register on April 29, 2020, goes into effect on Friday, May 1, 2020.
The interim final rule implements a provision of the Foreign Investment Risk Review Modernization Act of 2018 that directs Treasury to set fees for submission of certain formal written notices to CFIUS. The purpose of the interim final rule is to raise revenue to offset operations costs.
The interim final rule makes few changes to the proposed rule published on March 9, 2020 (see previous coverage). Under the interim final rule, the fee will apply to formal written notices of either a covered transaction or a covered real estate transaction. Specifically, the fee pertains to notices that are (i) filed subsequent to a declaration and/or (ii) voluntarily filed by the parties involved. Fees are not required when submitting a declaration with CFIUS.
Additional comments must be submitted by June 1, 2020.
Commentary
CFIUS's decision to make the interim final rule effective a mere two days after publication comes as a surprise, especially for those parties to transactions that may have filed draft notices but that have not yet submitted formal notices. Those parties, unless they file by April 30, will be subject to the new filing fee provisions.
Primary Sources
- CFIUS Press Release: CFIUS Filing Fees
- Federal Register Interim Final Rule: Filing Fees for Notices of Certain Investments in the United States by Foreign Persons and Certain Transactions by Foreign Persons Involving Real Estate in the United States
- CFIUS Fact Sheet: CFIUS Regulation Establishing Filing Fees for Notices
Originally published April 29, 2020
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