Updated February 21, 2020
Deadlines, Programs, and Regulations Mandated by FIRRMA
Overview
Report on rail investments. Within one year after
On August 13, 2018, President Trump signed the Foreign
enactment, the Secretary of Homeland Security, in
Investment Risk Review Modernization Act of 2018
coordination with CFIUS, is required to submit a report to
(FIRRMA) (Subtitle A, Title XVII, P.L. 115-232).
Congress assessing the national security risks related to
FIRRMA required significant changes to the jurisdiction
investments by state-owned or state-controlled entities in
and processes of the Committee on Foreign Investment in
the manufacture or assembly of rolling stock or other assets
the United States (CFIUS). Among other items, FIRRMA
used in freight rail, public transportation rail systems, or
required CFIUS to meet certain deadlines in programs and
intercity passenger rail systems in the United States. The
reporting, and to develop new regulations. In October 2018,
Secretary of Homeland Security is also required to consult
the Department of the Treasury published in the Federal
with the Secretary of Transportation and any agency head
Register preliminary rules implementing certain provisions
not represented on CFIUS with significant relevant
of FIRRMA related to critical technologies through a pilot
technical expertise.
program, which took effect on November 10. In September
2019, Treasury issued proposed regulations implementing
Assessing CFIUS resources. The President is required to
key parts of FIRRMA related to CFIUS’s expanded
determine for FY2019 and each year thereafter, the extent
jurisdiction to review certain real estate transactions, and
to which expansion of CFIUS responsibilities requires
noncontrolling and other investments. Final regulations
additional resources; member departments and agencies are
were published on January 13, 2020, and became effective
required to request additional resources in the budget.
on February 13, 2020. For more detail on the final rules, see
CRS In Focus IF11334, CFIUS: New Foreign Investment
Prioritization fee. Not later than 270 days after enactment,
Review Regulations.
the CFIUS chair is required to complete a study of the
feasibility and merits of establishing a fee or fee scale to
FIRRMA’s implementation in 2020 and beyond may raise
prioritize the timing of a response by CFIUS to a draft or
several questions for the 116th Congress, such as the extent
formal written notice during the period before the
to which modernization of CFIUS and its review of foreign
committee accepts the formal written notice. CFIUS is
direct investment transactions will safeguard U.S. national
required to submit a report of the findings to the Senate
security interests, particularly those related to strategic
Banking and House Financial Services Committees.
competition for leading edge technology.
Implementation plans. Not later than 180 days after
Deadlines
enactment, CFIUS is required to develop plans to
Under FIRRMA, a number of provisions became effective
implement FIRRMA and submit a report on the plan to
upon enactment to (1) expand the scope and jurisdiction of
appropriate congressional committees, including a
CFIUS by defining such terms as “covered transactions”
description of the timeline and process for implementation,
and “critical technologies”; (2) refine CFIUS procedures,
and any necessary additional staff and resources.
such as timing for reviews and investigations; and (3)
require actions by CFIUS to address national security risks
Annual resource needs. Not later than 1 year after
related to mitigation agreements, among other areas.
enactment and annually thereafter for 7 years, each agency
Treasury’s interim rules updated and amended existing
and department represented on CFIUS is required to submit
regulations in order to implement certain provisions
to the appropriate congressional committees a detailed
immediately. FIRRMA also required CFIUS to take certain
spending plan, including estimated expenditures and
actions within prescribed deadlines for various programs,
staffing levels for not less than the following fiscal year.
reporting, and other plans. These include the following:
Testimony. Not later than March 31st of each year, the
Recusal of CFIUS members. Within 90 days of enactment
chairperson or designee of CFIUS is required to appear
of FIRRMA, CFIUS is required to establish procedures for
before the House Financial Services and Senate Banking
members of CFIUS to recuse themselves in cases where
Committees to provide testimony on various topics,
they may have a conflict of interest, prepare a report on
including anticipated resource needs, adequacy of
recusal for the Senate Committee on Banking, Housing, and
appropriations, the expeditious nature of reviews and
Urban Affairs and House Committee on Financial Services,
investigations, mitigation agreements, and transactions in
and brief the committees on the report.
which a written notification or a declaration was not
provided to CFIUS.
Report on Chinese investment. Within two years of
enactment and every two years through 2026, the Secretary
Pilot Program
of Commerce is required to submit to Congress and CFIUS
The impetus for FIRRMA emerged from concerns that “the
a report on foreign direct investment by Chinese entities.
national security landscape has shifted in recent years, and
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Deadlines, Programs, and Regulations Mandated by FIRRMA
so has the nature of the investments that pose the greatest
declaration and request the parties seek a written
potential risk to national security....” As a result, FIRRMA
notification from CFIUS that it has completed all relevant
directed Treasury to develop pilot programs to address
actions; (3) initiate unilateral review; or (4) notify the firms
concerns related to some provisions and allow time for
that CFIUS has completed its action under statute.
additional resources to be directed at developing a more
permanent regulatory response. The 2018 pilot program
Changes in Regulations
implemented authorities in two sections of FIRRMA by (1)
FIRRMA also changed the existing CFIUS statute through
expanding the scope of transactions subject to a CFIUS
new regulations. Seven of 15 mandated regulations concern
review to include certain investments involving foreign
the definition of a covered transaction, or a merger,
persons and critical technologies, and (2) implementing
acquisition, or takeover (including joint ventures) of a U.S.
mandatory declarations for transactions within the
firm that could result in foreign control. The changes
program’s scope. The pilot program ended on February 12,
broaden the scope of CFIUS review by including certain
2020, with key provisions adopted through regulations.
real estate transactions located within, or that function as
part of, an air or maritime port, or are located within “close
Mandatory CFIUS Reviews for Certain
proximity” to certain U.S. military installations. Changes in
Noncontrolling Investments
investor rights that could result in foreign control and other
FIRRMA altered the CFIUS process for reviewing foreign
transactions designed to evade CFIUS review are also
investment by shifting from a voluntary filing process to a
covered. In addition, CFIUS can now review noncontrolling
mandatory filing and review process under certain
investments in an unaffiliated U.S. business that (1) owns,
conditions. Mandatory filings through declarations are
operates, manufactures, supplies, or services critical
required for some investments in certain U.S. businesses
infrastructure; (2) produces, designs, tests, manufactures,
that produce, design, test, manufacture, fabricate, or
fabricates, or develops critical technologies; or (3)
develop one or more critical technologies in 27 specified
maintains or collects sensitive personal data.
industries. This applies to critical technologies that are (1)
CFIUS was directed to regulate critical infrastructure, or
used in a U.S. business’s activity in one or more specified
“systems and assets, whether physical or virtual, so vital to
industries, or (2) designed by the U.S. business specifically
the United States that the incapacity or destruction of such
for use in those industries. The shift expands CFIUS
systems or assets would have a debilitating impact on
reviews to also include investments in which foreign
national security.” In addition, the meanings of material
investors do not have a controlling interest. Prior to this
nonpublic technical information, or “information not
change, a controlling interest was determined to be greater
available in the public domain that is necessary to design,
than 10% of the voting shares of a publicly traded
fabricate, develop, test, produce, or manufacture critical
company, or greater than 10% of total assets of a non-
technologies,” and other important determinants of covered
publicly traded U.S. company.
transactions, such as indirect investment, foreign person,
Selected Sample of 27 Industries in Pilot Program
substantial interest, and transfer of assets via bankruptcy or
other debt default are subject to regulations.
Aircraft Manufacturing
Electronic Computer Manufacturing
Regarding notice and filing procedures, CFIUS can regulate
Guided Missile and Space Manufacturing
fee collection on transactions for which a written notice was
Nuclear Electric Power Generation
submitted to CFIUS. Regarding declarations, CFIUS was
Petrochemical Manufacturing
required to develop regulations concerning the type and
Primary Battery Manufacturing
extent of information investors must provide, and the types
Broadcasting and Wireless Communications Equipment
of transactions that must submit a mandatory declaration.
Research and Development in Nanotechnology
Semiconductors Manufacturing
FIRRMA provisions also target international cooperation.
CFIUS was directed to establish a formal process for
Declarations and Written Notices
exchanging information with governments of U.S. allies or
FIRRMA expanded CFIUS notifications to include
partners to protect U.S. and other countries’ national
declarations of a pending transaction, in addition to written
security, harmonize actions regarding trends in investment
notices. Declarations and written notices are distinguished
and technology that could pose risks to national security,
by the length of the submission, the time for CFIUS’s
provide for information sharing on specific technologies
consideration, and the committee’s options for disposition
and entities acquiring technologies, and include recurring
of the submission. Declarations are described as short
consultations with other governments.
notices that do not exceed five pages. The pilot program
For more background on CFIUS and FIRRMA, see CRS In
listed information required as part of a declaration or a
Focus IF10177, The Committee on Foreign Investment in
written notification. The parties involved could voluntarily
the United States, and CRS In Focus IF10952, CFIUS
stipulate that a transaction is a covered transaction, could
Reform under FIRRMA.
result in control of a U.S. business by a foreign person, and
is foreign-government controlled. CFIUS would be required
James K. Jackson, Specialist in International Trade and
to respond within 30 days to the filing of a declaration, and
Finance
within 45 days for a written notification.
Cathleen D. Cimino-Isaacs, Analyst in International Trade
and Finance
CFIUS can respond in one of four ways to a declaration: (1)
request that the parties file a written notice; (2) inform that
IF11135
CFIUS cannot complete the review on the basis of the
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Deadlines, Programs, and Regulations Mandated by FIRRMA
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