Implementation of the Foreign Investment and National Security Act

My colleagues Margaret M. Ayres and Jeanine P. McGuinness have prepared a memorandum entitled “FINSA Final Regulations,” which discusses the final regulations recently issued by the U.S. Department of the Treasury to implement the Foreign Investment and National Security Act of 2007. That law amended the 1988 “Exon-Florio” statute and made significant changes to the scope of review and process for evaluating foreign acquisitions of U.S. businesses for national security risks. The regulations implement the 2007 law and codify recent improvements to the practices of the Committee on Foreign Investment in the United States. They also maintain many of the features of the existing regulations, as well as of the proposed regulations, which were issued for notice and comment on April 21, 2008. The new regulations include the concept of a “covered transaction” and give additional guidance on key terms, including “control.” They also significantly expand the amount of information required in a voluntary notice and provide new procedures governing the review process. The final regulations were published in the Federal Register on November 21 and will become effective on December 22, 2008.

The memorandum is available here and the final regulations may be accessed here.