Originally published December 1, 2008

Keywords: final rules, foreign investments, US Department of the Treasury, national security, Foreign Investment in the United States, CFIUS,

On November 21, 2008, the US Department of the Treasury published its much anticipated final rules implementing the 2007 amendments to the US laws restricting foreign investments that may threaten US national security. The final rules are effective on December 22, 2008. Issued in proposed form on April 23, 2008, the final rules signal that foreign investments will be subject to a more expansive and intensive examination process by the Committee on Foreign Investment in the United States (CFIUS). Our earlier Client Update in May 2008 discussed the major ramifications of the proposed regulations, and that discussion applies as well to the final regulations, which incorporate the proposed regulations with only minor revisions. Importantly, the final regulations confirm that CFIUS may wish to examine even transactions in which the foreign investment represents less than a 10-percent interest. Both foreign acquirers and US businesses must take into account these national security regulations as they consider foreign investments in the United States in a wide range of sectors, including defense, telecommunications, infrastructure, energy, and technology.

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