International Regulatory Enforcement (PHIRE)
CFIUS's New Pilot Program Signals an Expansive Approach to Its Jurisdiction Under FIRRMA
By Scott M. Flicker, Charles A. Patrizia, Robert Silvers, Randall V. Johnston, Quinn Dang & Talya R. Hutchison
CFIUS has launched a pilot program mandating, on pain of civil penalty, that parties to all foreign investments in a defined group of industry sectors must submit their transactions for review, when specific triggers are met. This action signals CFIUS's intent to aggressively exercise its expanded authorities under FIRRMA, a recent statutory overhaul to the CFIUS process.
Equally notable is what CFIUS's approach to the design of the pilot program augers for its full implementation of FIRRMA authorities in the future. CFIUS appears poised to assume all powers conferred by Congress to review foreign investment transactions, including possibly mandating filings in circumstances beyond just those involving foreign government actors.
The CFIUS pilot program represents the first time that CFIUS filings are mandated for some transactions.
Penalties for failure to file can reach the full value of the transaction at issue.
Investors and targets in 27 industry sectors identified in the pilot program must carefully review the mandatory filing requirements.