Interim Final Rule

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FOR FURTHER INFORMATION CONTACT:

Colby Abbott, Airspace Policy Group,
Office of Airspace Services, Federal
Aviation Administration, 800
Independence Avenue SW, Washington,
DC 20591; telephone: (202) 267–8783.
SUPPLEMENTARY INFORMATION:
Authority for This Rulemaking
The FAA’s authority to issue rules
regarding aviation safety is found in
Title 49 of the United States Code.
Subtitle I, Section 106 describes the
authority of the FAA Administrator.
Subtitle VII, Aviation Programs,
describes in more detail the scope of the
agency’s authority. This rulemaking is
promulgated under the authority
described in Subtitle VII, Part A,
Subpart I, Section 40103. Under that
section, the FAA is charged with
prescribing regulations to assign the use
of the airspace necessary to ensure the
safety of aircraft and the efficient use of
airspace. This regulation is within the
scope of that authority as it makes the
necessary updates for airspace areas
within the National Airspace System.
History
The FAA published a final rule in the
Federal Register for Docket No. FAA–
2018–0632 (83 FR 40662, August 16,
2018), amending the Chicago Class B
and Chicago Class C airspace in
Chicago, IL. The amendment was
published under Order 7400.11B (dated
August 3, 2017, and effective September
15, 2017), but became effective under
Order 7400.11C (dated August 13, 2018,
and effective September 15, 2018). This
action incorporates this rule into the
current FAA Order 7400.11C.
Class B airspace designations are
published in paragraph 3000 and Class
C airspace designations are published in
paragraph 4000 of FAA Order 7400.11C,
dated August 13, 2018, and effective
September 15, 2018, which is
incorporated by reference in 14 CFR
71.1. The Class B and Class C airspace
designations listed in this document
will be subsequently published in the
Order.

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Availability and Summary of
Documents for Incorporation by
Reference

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Regulatory Notices and Analyses
The FAA has determined that this
regulation only involves an established
body of technical regulations for which
frequent and routine amendments are
necessary to keep them operationally
current. Therefore, this regulation: (1) Is
not a ‘‘significant regulatory action’’
under Executive Order 12866; (2) is not
a ‘‘significant rule’’ under Department of
Transportation (DOT) Regulatory
Policies and Procedures (44 FR 11034;
February 26, 1979); and (3) does not
warrant preparation of a regulatory
evaluation as the anticipated impact is
so minimal. Since this is a routine
matter that only affects air traffic
procedures and air navigation, it is
certified that this rule, when
promulgated, does not have a significant
economic impact on a substantial
number of small entities under the
criteria of the Regulatory Flexibility Act.
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference,
Navigation (air).
Adoption of the Amendment
In consideration of the foregoing, the
Federal Aviation Administration
amends 14 CFR part 71 as follows:
PART 71—DESIGNATION OF CLASS A,
B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND
REPORTING POINTS
1. The authority citation for 14 CFR
part 71 continues to read as follows:

■

This document amends FAA Order
7400.11C, Airspace Designations and
Reporting Points, dated August 13,
2018, and effective September 15, 2018.
FAA Order 7400.11C is publicly
available as listed in the ADDRESSES
section of this document. FAA Order
7400.11C lists Class A, B, C, D, and E
airspace areas, air traffic service routes,
and reporting points.

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The Rule
This action amends Title 14 Code of
Federal Regulations (14 CFR) part 71 by
incorporating this amendment into FAA
Order 7400.11C for a final rule
published in the Federal Register of
August 16, 2018, for the above titled,
Amendment of Chicago Class B and
Chicago Class C Airspace; Chicago, IL.
Accordingly, as this is an
administrative correction to update the
final rule amendment into FAA Order
7400.11C, notice and public procedure
under 5 U.S.C. 553(b) are unnecessary.
Also, to bring this rule and legal
description current, I find that good
cause exists, under 5 U.S.C. 553(d), for
making this amendment effective in less
than 30 days.

Authority: 49 U.S.C. 106(f),106(g), 40103,
40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR,
1959–1963 Comp., p. 389.
§ 71.1

[Amended]

2. Section 71.1 is revised to read as
follows:
For Docket No. FAA–2018–0632;
Airspace Docket No. 17–AWA–4 (83 FR

■

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40662, August 16, 2018). On page
40662, column 3, line 59, and page
40663, column 1, line 10, under
ADDRESSES; and on page 40663, column
2, line 15, and line 17, under
Availability and Summary of
Documents for Incorporation by
Reference remove ‘‘. . . FAA Order
7400.11B . . .’’ and add in its place
‘‘. . . FAA Order 7400.11C . . .’’.
On page 40663, column 1, line 66,
under History remove ‘‘. . . FAA Order
7400.11B dated August 3, 2017, and
effective September 15, 2017, . . .’’ and
add in its place ‘‘. . . FAA Order
7400.11C dated August 13, 2018, and
effective September 15, 2018 . . .’’.
On page 40663, column 2, line 12,
under Availability and Summary of
Documents for Incorporation by
Reference; and on page 40664, column
1, line 22, under Amendatory
Instruction 2 remove ‘‘. . . FAA Order
7400.11B, Airspace Designations and
Reporting Points, dated August 3, 2017,
and effective September 15, 2017, . . .’’
and add in its place ‘‘. . . FAA Order
7400.11C, Airspace Designations and
Reporting Points, dated August 13,
2018, and effective September 15, 2018,
. . .’’.
Issued in Washington, DC, on October 5,
2018.
Rodger A. Dean Jr.,
Manager, Airspace Policy Group.
[FR Doc. 2018–22193 Filed 10–10–18; 8:45 am]
BILLING CODE 4910–13–P

DEPARTMENT OF THE TREASURY
Office of Investment Security
31 CFR Part 800
RIN 1505–AC60

Provisions Pertaining to Certain
Investments in the United States by
Foreign Persons
Office of Investment Security,
Department of the Treasury.
ACTION: Interim rule.
AGENCY:

This interim rule sets forth
amendments to the regulations in part
800 of 31 CFR that implement, and
make updates consistent with, certain
provisions of the Foreign Investment
Risk Review Modernization Act of 2018
(FIRRMA). Among other things, this
interim rule implements certain
provisions of FIRRMA that became
immediately effective upon its
enactment and provides clarity as to the
current process and procedures with
respect to the reviews and investigations
undertaken by the Committee on

SUMMARY:

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Foreign Investment in the United States
pursuant to part 800, in light of
FIRRMA.
DATES: Effective date: These provisions
are effective October 11, 2018.
Applicability date: See § 800.103.
Comment date: Written comments
must be received by November 10, 2018.
ADDRESSES: Written comments on the
interim rule may be submitted through
one of two methods:
• Electronic Submission of
Comments: Interested persons may
submit comments electronically through
the Federal government eRulemaking
Portal at https://www.regulations.gov.
Electronic submission of comments
allows the commenter maximum time to
prepare and submit a comment, ensures
timely receipt, and enables the
Department to make them available to
the public. Comments submitted
electronically through the https://
www.regulations.gov website can be
viewed by other commenters and
interested members of the public.
• Mail: Send to U.S. Department of
the Treasury, Attention: Thomas Feddo,
Deputy Assistant Secretary for
Investment Security, 1500 Pennsylvania
Avenue, NW, Washington, DC 20220.
In general, Treasury will post all
comments to www.regulations.gov
without change, including any business
or personal information provided, such
as names, addresses, email addresses, or
telephone numbers. All comments
received, including attachments and
other supporting material, will be part
of the public record and subject to
public disclosure. You should only
submit information that you wish to
make publicly available.
FOR FURTHER INFORMATION CONTACT: For
questions about this interim rule,
contact: Thomas Feddo, Deputy
Assistant Secretary for Investment
Security; Laura Black, Director of
Investment Security Policy and
International Relations; Meena Sharma,
Senior Policy Advisor; or Juliana
Gabrovsky, Policy Advisor, at U.S.
Department of the Treasury, 1500
Pennsylvania Avenue, NW, Washington,
DC 20220, telephone: (202) 622–3425,
email: [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
On August 13, 2018, President Trump
signed into law the Foreign Investment
Risk Review Modernization Act of 2018
(FIRRMA), Subtitle A of Title XVII of
Pub. L. 115–232 (Aug. 13, 2018), which
amends section 721 of the Defense
Production Act of 1950 (DPA). Pursuant
to section 1727 of FIRRMA, a number of
provisions of FIRRMA took effect

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immediately upon enactment of the
statute, while the effectiveness of other
provisions is delayed. A number of the
immediately effective provisions of
FIRRMA required revisions to certain
provisions of part 800. This interim rule
amends part 800 to make such revisions
and makes several other updates
consistent with FIRRMA.
This interim rule is intended to
provide clarity regarding the processes
and procedures of the Committee on
Foreign Investment in the United States
(CFIUS, or the Committee) pending the
full implementation of FIRRMA.
II. Waiver of Public Comment
Requirement for Temporary Provisions
The interim rule set forth in this
document implements certain
immediately effective provisions of, and
makes updates consistent with,
FIRRMA. Section 709(a) of the DPA (50
U.S.C. 4559(a)) provides that regulations
issued under the DPA are not subject to
the rulemaking requirements of the
Administrative Procedure Act (APA).
Moreover, to the extent that the
rulemaking requirements of the APA
were determined to apply to this interim
rule, the provisions of the APA
requiring notice of proposed
rulemaking, opportunity for public
participation, and delay in effective date
(5 U.S.C. 553), as well as the provisions
of Executive Order 13771, are
inapplicable because this interim rule
involves a foreign affairs function of the
United States. By its terms, this interim
rule regulates the conduct of foreign
persons seeking to acquire certain
interests in particular U.S. businesses,
precisely because the acquisition of
such interests could harm the strategic
national security interests of the United
States vis-a`-vis other nations.
Notwithstanding that the rulemaking
requirements of the APA do not apply
to this interim rule, section 709(b)(1) of
the DPA provides that, except as
otherwise provided in section 709, any
regulation issued under the DPA must
be published in the Federal Register
and opportunity for public comment
must be provided for not less than 30
days, consistent with the requirements
of 5 U.S.C. 553(b).
Section 709(b)(2) of the DPA (50
U.S.C. 4559(b)(2)), however, provides
that the requirements of section
709(b)(1) may be waived if: (1) The
officer authorized to issue the regulation
finds that urgent and compelling
circumstances make compliance with
such requirements impracticable; (2) the
regulation is issued on a temporary

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51317

basis 1; and (3) the publication of such
temporary rule is accompanied by the
finding made under (1) (and a brief
statement of the reasons for such
finding) and an opportunity for public
comment is provided for not less than
30 days before any regulation becomes
final.
The regulatory amendments set forth
in this document meet the three
requirements of section 709(b)(2) of the
DPA for the reasons below, and
therefore qualify for waiver of the public
comment requirement of section
709(b)(1) of the DPA.
First, as required by section
709(b)(2)(A) of the DPA, and for the
reasons described in part III, below,
upon the approval of the Secretary of
the Treasury, the Assistant Secretary of
the Treasury for International Markets
finds, and the Committee agrees, that
urgent and compelling circumstances
make completion of the process for
public participation in rulemaking set
forth in section 709 of the DPA
impracticable prior to the effectiveness
of this interim rule.
Second, this interim rule is limited in
duration as the amendments addressed
in this rule will be further addressed in
the final rule implementing FIRRMA,
which is forthcoming and will
supersede this interim rule. Thus, these
amendments are being issued on a
temporary basis pending the full
implementation of FIRRMA.
Third, consistent with the
requirement of section 709(b)(2)(C) of
the DPA, if the Committee intends to
make the provisions of this interim rule
final, CFIUS will complete the process
for public participation in rulemaking
set forth in section 709 of the DPA in
conjunction with the issuance of a final
rule.
III. Urgent and Compelling
Circumstances for Interim Rule
Upon enactment of FIRRMA, certain
of the Committee’s regulations in part
800 were rendered inconsistent with
section 721. These inconsistencies
could lead to ambiguity regarding the
procedural aspects of the national
security reviews and investigations
undertaken by the Committee. Given
that parties involved in cross-border
transactions regularly include CFIUS
among the regulatory regimes that are
assessed in transaction negotiations and
planning, urgent and compelling
circumstances exist that require
immediate and clear guidance. One of
the factors that makes the United States
1 Temporary regulations with no specific
expiration date are ‘‘interim rules’’ for purposes of
Federal Register classification.

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an attractive destination for foreign
investment is the transparency and
clarity of the rules and procedures that
govern the national security reviews and
investigations carried out by CFIUS.
This interim rule seeks to ensure, in a
timely manner, that the rules and
procedures that the Committee applies
to its national security reviews and
investigations remain clear to parties
actively involved in transaction
negotiations and planning.
As a result, the Committee is
providing an immediate opportunity for
public comment on this interim rule
and will consider and address such
comments in the process of
promulgating any final rule, consistent
with section 709(b)(3) of the DPA. This
approach appropriately balances the
urgency of the interim rule with the
need for public participation in the
formulation of any final rule.

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IV. Discussion of Interim Rule
Overview of Key Amendments to the
Regulations at Part 800
This interim rule makes amendments
to the regulations at part 800 that are
largely technical in nature. It
implements certain immediately
effective provisions of, and makes
updates consistent with, FIRRMA. The
discussion below summarizes the key
changes made by this interim rule.
Section 800.103. This section is
amended to provide clarity with respect
to the applicability of the amendments
to part 800 included in this interim rule.
These amendments apply with respect
to any covered transaction the review of
which is initiated under section 721 on
or after October 11, 2018. Certain of the
provisions in FIRRMA that are
addressed in this interim rule, however,
took effect upon enactment of the
statute. Most notably for transaction
parties, FIRRMA’s extension of the
CFIUS review period from 30 days to 45
days went into effect immediately, and
this interim rule updates part 800 to
reflect the current practice of CFIUS. As
indicated on the CFIUS website of the
Department of the Treasury on August
13, 2018, upon the enactment of
FIRRMA, CFIUS began applying the 45day review period with respect to any
covered transaction the review of which
is initiated under section 721 on or after
the date of FIRRMA’s enactment.
Section 800.104. FIRRMA expands
the definition of ‘‘covered transaction’’
to include transactions, transfers,
agreements, or arrangements, the
structure of which is designed or
intended to evade or circumvent the
application of section 721. Therefore,
section 800.104, which addressed

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transactions or devices for avoidance,
has been removed.
Section 800.202. The amendment to
this section implements section 1720 of
FIRRMA and expressly provides for the
application of section 1001 of title 18,
United States Code, to all information
provided to the Committee under
section 721 by any party to a covered
transaction.
Section 800.207. The revision to the
definition of ‘‘covered transaction’’ is
consistent with the language in
FIRRMA.
Section 800.209. The revision to the
definition of ‘‘critical technologies’’ is
consistent with the language in
FIRRMA, including, and in particular,
adding a sixth category as subpart (f) to
capture emerging and foundational
technologies controlled pursuant to
section 1758 of the Export Control
Reform Act of 2018.
Section 800.224. The revision to the
definition of ‘‘transaction’’ is consistent
with the language in FIRRMA defining
a ‘‘covered transaction’’ to include
certain changes in rights that a foreign
person has with respect to a U.S.
business in which the foreign person
has an investment, as well as
transactions the structure of which is
designed or intended to evade or
circumvent the application of section
721. Corresponding changes are made to
the definition of ‘‘party or parties to a
transaction’’ in section 800.220.
Sections 800.301 and 800.302. The
revisions to these sections add examples
that are intended to illustrate the
application of the expanded scope of
‘‘covered transactions’’ to the particular
hypothetical situations. The examples
are presented for the purpose of aiding
the understanding of readers. They
neither limit the definition set forth in
subpart B of part 800 nor exhaust the
scenarios to which such definition
could apply.
Section 800.401. The revisions to this
section implement a shift to electronic
submissions of voluntary notices, rather
than requiring a hardcopy submission,
which is consistent with the focus of
FIRRMA on ensuring that the
procedures of the Committee enable the
Committee’s efficient operation.
Section 800.402. The revisions to
section 800.402 modify certain of the
requirements regarding the content of
voluntary notices based on FIRRMA
including, and in particular, adding a
provision allowing parties to stipulate
that the transaction that is the subject of
the voluntary notice is a covered
transaction and, as relevant, a foreign
government-controlled transaction. The
Committee notes that stipulating that a
transaction is covered or foreign

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government-controlled allows the
Committee to expend fewer resources in
determining whether the transaction
meets these criteria, potentially
speeding the resolution of a review.
Although the parties, by stipulating, are
averring that they view the transaction
to be covered and/or foreign
government-controlled, neither the
Committee nor the President is bound
by the parties’ stipulations.
Section 800.502. The revision to the
timing of the review period, extending
the period from 30 days to 45 days, is
consistent with FIRRMA. This change is
reflected in certain other sections of part
800 that are updated by this interim
rule.
Section 800.506. The revisions to this
section are consistent with FIRRMA and
define the ‘‘extraordinary
circumstances’’ pursuant to which an
investigation period can be extended by
one 15-day period.
Section 800.702. The revisions to this
section are consistent with FIRRMA,
including, and in particular,
incorporating additional exceptions
with respect to information sharing.
Section 800.801. The revisions to this
section are consistent with FIRRMA
including, and in particular, removing
the language ‘‘intentionally or through
gross negligence’’ in the provisions
allowing for the imposition of civil
penalties. By their terms, the revisions
do not apply the new standard to
material misstatements, omissions, or
certifications made preceding the
implementation of this rule, or to
violations occurring after the
implementation of this rule, in
connection with mitigation agreements,
material conditions, or orders entered
into or imposed prior to the
implementation of this rule.
Section 800.802. The addition of this
section is consistent with FIRRMA
including authorizing the Committee to,
in addition to other remedies, negotiate
a remediation plan for lack of
compliance with a mitigation agreement
or condition entered into or imposed
under section 721(l), require filings for
future covered transactions for five
years, or seek injunctive relief.
Executive Order 12866
These regulations are not subject to
the requirements of Executive Order
12866 because they relate to a foreign
affairs function of the United States.
Paperwork Reduction Act
The collection of information
contained in this rule has been
submitted to the Office of Management
and Budget in accordance with the
Paperwork Reduction Act of 1995 (44

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U.S.C. 3507(d)) and assigned control
number 1505–0121. Under the
Paperwork Reduction Act, an agency
may not conduct or sponsor, and a
person is not required to respond to, a
collection of information unless it
displays a valid control number
assigned by the Office of Management
and Budget.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
(5 U.S.C. 601 et seq.) generally requires
an agency to prepare a regulatory
flexibility analysis unless the agency
certifies that the rule will not have a
significant economic impact on a
substantial number of small entities.
The RFA applies when an agency is
required to publish a general notice of
proposed rulemaking under section
553(b) of the APA, or any other law. As
set forth below, because regulations
issued pursuant to the Defense
Production Act of 1950 (50 U.S.C. 4559)
are not subject to the APA, or other law
requiring the publication of a general
notice of proposed rulemaking, the RFA
does not apply.
This interim rule implements section
721 of the DPA. Section 709(a) of the
DPA provides that the regulations
issued under it are not subject to the
rulemaking requirements of the APA.
Section 709(b)(1) instead provides that
any regulation issued under the DPA be
published in the Federal Register and
opportunity for public comment be
provided for not less than 30 days.
(Notwithstanding the notice
requirements of section 709(b)(1),
section 709(b)(2) of the DPA waives the
DPA’s public comment provision for
temporary provisions. As discussed in
part II above, this interim rule
implements, and makes updates
consistent with, certain immediately
effective provisions of FIRRMA and is
issued pursuant to the section 709(b)(2)
waiver provision.) Section 709(b)(3) of
the DPA also provides that all
comments received during the public
comment period be considered and the
publication of the final regulation
contain written responses to such
comments. Consistent with the plain
text of the DPA, legislative history
confirms that Congress intended that
regulations under the DPA be exempt
from the notice and comment provisions
of the APA and instead provided that
the agency include a statement that
interested parties were consulted in the
formulation of the final regulation. See
H.R. Conf. Rep. No. 102–1028, at 42
(1992) and H.R. Rep. No. 102–208 pt. 1,
at 28 (1991). The limited public
participation procedures described in
the DPA do not require a general notice

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of proposed rulemaking as set forth in
the RFA. Further, the mechanisms for
publication and public participation are
sufficiently different to distinguish the
DPA procedures from a rule that
requires a general notice of proposed
rulemaking. In providing the President
with expanded authority to suspend or
prohibit the acquisition, merger, or
takeover of, or certain other investments
in, a domestic firm by a foreign firm if
such action would threaten to impair
the national security, Congress could
not have contemplated that regulations
implementing such authority would be
subject to RFA analysis. For these
reasons, the RFA does not apply to these
regulations.
List of Subjects in 31 CFR Part 800
Foreign investments in the United
States, Investigations, National defense,
Reporting and recordkeeping
requirements.
Accordingly, for the reasons stated in
the preamble, Code of Federal
Regulations, Title 31, Subtitle B,
Chapter VIII, Part 800 is amended as
follows:
PART 800—REGULATIONS
PERTAINING TO CERTAIN
INVESTMENTS IN THE UNITED
STATES BY FOREIGN PERSONS
1. The authority citation for part 800
is revised to read as follows:

■

Authority: 50 U.S.C. 4565; E.O. 11858, as
amended, 73 FR 4677.

2. The heading for part 800 is revised
to read as set forth above.

■

Subpart A—General
3. In § 800.101, remove ‘‘(50 U.S.C.
App. 2170)’’ after ‘‘Defense Production
Act of 1950’’ and add in its place ‘‘(50
U.S.C. 4565)’’.
■ 4. Amend § 800.103 by revising
paragraph (a) and adding paragraph (c)
to read as follows:
■

§ 800.103 Applicability rule; prospective
application of certain provisions.

(a) Except as provided in paragraphs
(b) and (c) of this section and otherwise
in this part, the regulations in this part
apply from the effective date.
*
*
*
*
*
(c) The amendments to this part
published in the Federal Register on
October 11, 2018, apply with respect to
any covered transaction the review of
which is initiated under section 721 on
or after October 11, 2018.
§ 800.104
■

[Removed]

5. Remove § 800.104.

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Subpart B—Definitions
6. Amend § 800.202 as follows:
a. In paragraph (a) add ‘‘under the
penalties provided in section 1001 of
title 18, United States Code’’ after the
word ‘‘certifying’’; and
■ b. In the Note to § 800.202, remove ‘‘at
http://www.treasury.gov/offices/
international-affairs/cfius/index.shtml’’
and add in its place ‘‘, currently
available at https://home.treasury.gov/
policy-issues/international/thecommittee-on-foreign-investment-in-theunited-states-cfius’’ after ‘‘website’’.
■ 7. Revise § 800.207 to read as follows:
■
■

§ 800.207

Covered transaction.

The term covered transaction means
any transaction that is proposed or
pending after August 23, 1988, by or
with any foreign person that could
result in foreign control of any U.S.
business, including such a transaction
carried out through a joint venture.
■ 8. Revise § 800.209 to read as follows:
§ 800.209

Critical technologies.

The term critical technologies means
the following:
(a) Defense articles or defense services
included on the United States
Munitions List set forth in the
International Traffic in Arms
Regulations (ITAR) (22 CFR parts 120–
130).
(b) Items included on the Commerce
Control List set forth in Supplement No.
1 to part 774 of the Export
Administration Regulations (EAR) (15
CFR parts 730–774), and controlled—
(1) Pursuant to multilateral regimes,
including for reasons relating to
national security, chemical and
biological weapons proliferation,
nuclear nonproliferation, or missile
technology; or
(2) For reasons relating to regional
stability or surreptitious listening.
(c) Specially designed and prepared
nuclear equipment, parts and
components, materials, software, and
technology covered by 10 CFR part 810
(relating to assistance to foreign atomic
energy activities).
(d) Nuclear facilities, equipment, and
material covered by 10 CFR part 110
(relating to export and import of nuclear
equipment and material).
(e) Select agents and toxins covered
by 7 CFR part 331, 9 CFR part 121, or
42 CFR part 73.
(f) Emerging and foundational
technologies controlled pursuant to
section 1758 of the Export Control
Reform Act of 2018.
■ 9. Amend § 800.220 as follows:
■ a. In paragraph (e), remove the second
‘‘and’’;

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b. Redesignate paragraph (f) as
paragraph (h);
■ c. Add paragraphs (f) and (g);
■ d. In redesignated paragraph (h),
remove ‘‘paragraphs (a) through (e)’’ and
add in its place ‘‘paragraphs (a) through
(g)’’ after ‘‘described in’’.
The additions read as follows:
■

§ 800.220

Party or parties to a transaction.

*

*
*
*
*
(f) In the case of a change in rights
that a person has with respect to an
entity in which that person has an
investment, the person whose rights
change as a result of the transaction and
the entity to which those rights apply;
(g) In the case of a transfer, agreement,
arrangement, or any other type of
transaction, the structure of which is
designed or intended to evade or
circumvent the application of section
721, any person that participates in such
transfer, agreement, arrangement, or
other type of transaction; and’’; and
*
*
*
*
*
■ 10. Amend § 800.222 by removing ‘‘50
U.S.C. App. 2170’’ after ‘‘Defense
Production Act of 1950,’’ and adding in
its place ‘‘50 U.S.C. 4565’’.
■ 11. Revise § 800.224 to read as
follows:
§ 800.224

Transaction.

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The term transaction means:
(a) A proposed or completed merger,
acquisition, or takeover, including
without limitation:
(1) The acquisition of an ownership
interest in an entity;
(2) The acquisition or conversion of
convertible voting instruments of an
entity;
(3) The acquisition of proxies from
holders of a voting interest in an entity;
(4) A merger or consolidation;
(5) The formation of a joint venture;
and
(6) A long-term lease under which a
lessee makes substantially all business
decisions concerning the operation of a
leased entity, as if it were the owner;
(b) Any change in rights that a person
has with respect to an entity in which
that person has an investment; and
(c) Any other transaction, transfer,
agreement, or arrangement, the structure
of which is designed or intended to
evade or circumvent the application of
section 721.
Example. Corporation A, a foreign person,
signs a concession agreement to operate the
toll road business of Corporation B, a U.S.
business, for 99 years. Corporation B,
however, is required under the agreement to
perform safety and security functions with
respect to the business and to monitor
compliance by Corporation A with the
operating requirements of the agreement on

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an ongoing basis. Corporation B may
terminate the agreement or impose other
penalties for breach of these operating
requirements. Assuming no other relevant
facts, this is not a transaction.
Note to § 800.224: See § 800.304 regarding
factors the Committee will consider in
determining whether to include the rights to
be acquired by a foreign person upon the
conversion of convertible voting instruments
as part of the Committee’s assessment of
whether a transaction that involves such
instruments is a covered transaction.

A and Corporation X enter into a contractual
arrangement pursuant to which Corporation
A gains the right to purchase an additional
interest in Corporation X to prevent the
dilution of Corporation A’s pro rata interest
in Corporation X in the event that
Corporation X issues additional instruments
conveying interests in Corporation X.
Corporation A does not acquire any
additional rights or ownership interest in
Corporation X pursuant to the contractual
arrangement. Assuming no other relevant
facts, the transaction is not a covered
transaction.

Subpart C—Coverage

Subpart D—Notice

■

12. Amend § 800.301 by adding
paragraphs (e) and (f) to read as follows:

■

§ 800.301 Transactions that are covered
transactions.

§ 800.401

*

*
*
*
*
(e) A change in the rights that a
foreign person has with respect to a U.S.
business in which the foreign person
has an investment, if that change could
result in foreign control of the U.S.
business.
Example. Corporation A, a foreign person,
holds a 10 percent ownership interest in
Corporation X, a U.S. business. Corporation
A and Corporation X enter into a contractual
arrangement pursuant to which Corporation
A will provide consulting and other advisory
services to Corporation X in exchange for the
right to appoint the Chief Executive Officer
and the Chief Technical Officer of
Corporation X. Corporation A does not
acquire any additional ownership interest in
Corporation X pursuant to the contractual
arrangement. The transaction is a covered
transaction.

(f) A transaction the structure of
which is designed to evade or
circumvent the application of section
721.
Example. Corporation A is organized
under the laws of a foreign state and is
wholly owned and controlled by a foreign
national. With a view towards circumventing
section 721, Corporation A transfers money
to a U.S. citizen, who, pursuant to informal
arrangements with Corporation A and on its
behalf, purchases all the shares in
Corporation X, a U.S. business. The
transaction is a covered transaction.

13. Amend § 800.302 by adding
paragraph (f) to read as follows:

■

§ 800.302 Transactions that are not
covered transactions.

*

*
*
*
*
(f) A change in the rights that a
foreign person has with respect to a U.S.
business in which that foreign person
has an investment, if that change could
not result in foreign control of the U.S.
business.
Example. Corporation A, a foreign person,
holds a 10 percent ownership interest in
Corporation X, a U.S. business. Corporation

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14. Revise § 800.401(a) and (e) to read
as follows:
Procedures for notice.

(a) A party or parties to a proposed or
completed transaction may file a
voluntary notice of the transaction with
the Committee. Voluntary notice to the
Committee is filed by sending one
electronic copy of the notice that
includes, in English, the information set
out in § 800.402, including the
certification required under paragraph
(l) of that section. See the Committee’s
section of the Department of the
Treasury website, currently available at
https://home.treasury.gov/policy-issues/
international/the-committee-on-foreigninvestment-in-the-united-states-cfius,
for electronic submission instructions.
*
*
*
*
*
(e) Upon receipt of the electronic copy
of a notice filed under paragraph (a) of
this section, including the certification
required by § 800.402(l), the Staff
Chairperson shall promptly inspect
such notice for completeness.
*
*
*
*
*
■ 15. Amend § 800.402 as follows:
■ a. In paragraph (c)(1)(viii), remove
‘‘and’’;
■ b. In paragraph (c)(1)(ix), add ‘‘and’’
after ‘‘transaction;’’
■ c. Add paragraph (c)(1)(x);
■ d. In paragraph (l), remove ‘‘available
at http://www.treas.gov/offices/
international-affairs/cfius/index.shtml’’
and add in its place ‘‘currently available
at https://home.treasury.gov/policyissues/international/the-committee-onforeign-investment-in-the-united-statescfius’’ after ‘‘website’’; and
■ e. Add paragraph (n).
The additions read as follows:
§ 800.402

Contents of voluntary notice.

*

*
*
*
*
(c) * * *
(1) * * *
(x) A copy of any partnership
agreements, integration agreements, or
other side agreements relating to the
transaction.’’;
*
*
*
*
*

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Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Rules and Regulations
(n) A party filing a voluntary notice
may stipulate that the transaction is a
covered transaction and, if the party
stipulates that the transaction is a
covered transaction, that the transaction
is a foreign government-controlled
transaction. A stipulation offered by any
party pursuant to this section must be
accompanied by a description of the
basis for the stipulation. The required
description of the basis shall include,
but is not limited to, discussion of all
relevant information responsive to
paragraphs (c)(6)(iv) through (c)(6)(vi) of
this section. A party that offers such a
stipulation acknowledges that the
Committee and the President are
entitled to rely on such stipulation in
determining whether the transaction is
a covered transaction and/or a foreign
government-controlled transaction for
the purposes of section 721 and all
authorities thereunder, and waives the
right to challenge any such
determination. Neither the Committee
nor the President is bound by any such
stipulation, nor does any such
stipulation limit the ability of the
Committee or the President to act on
any authority provided under section
721 with respect to any covered
transaction.
■ 16. Amend § 800.403 as follows:
■ a. In paragraph (b), remove ‘‘thirtyday’’ and add ‘‘specified by § 800.502’’
after ‘‘review period’’;
■ b. In Example 1, remove ‘‘thirty-day’’;
and
■ c. In Example 2, remove ‘‘25th’’ and
add in its place ‘‘40th’’ and remove ‘‘30’’
and add in its place ‘‘45’’.
Subpart E—Committee Procedures:
Review And Investigation
17. Amend § 800.501 as follows:
a. In paragraph (a) introductory text,
add a new sentence before the existing
sentence; and
■ b. In paragraph (b) remove ‘‘thirtyday’’.
The addition reads as follows:
■
■

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§ 800.501

General.

(a) In any review or investigation of a
covered transaction, the Committee
should consider the factors specified in
section 721(f) and, as appropriate,
require parties to provide to the
Committee the information necessary to
consider such factors. * * *
*
*
*
*
*
■ 18. Amend § 800.502 by revising the
section heading and paragraph (b) to
read as follows:
§ 800.502 Beginning of forty-five day
review period.

*

*

*

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*

*

19:54 Oct 10, 2018

(b) A 45-day period for review of a
transaction shall commence on the date
on which the voluntary notice has been
accepted, agency notice has been
received by the Staff Chairperson of the
Committee, or the Chairperson of the
Committee has requested a review
pursuant to § 800.401(b). Such review
shall end no later than the forty-fifth
day after it has commenced, or if the
forty-fifth day is not a business day, no
later than the next business day after the
forty-fifth day.
*
*
*
*
*
■ 19. Amend § 800.505(a) by removing
‘‘thirty-day’’.
■ 20. Amend § 800.506 as follows:
■ a. In paragraph (a), remove ‘‘The
Committee’’ and add in its place
‘‘Subject to paragraph (e) of this section,
the Committee’’ before ‘‘shall’’; and
■ b. Add paragraphs (e) and (f) to read
as follows:
§ 800.506 Completion or termination of
investigation and report to the President.

*

*
*
*
*
(e) In extraordinary circumstances,
the Chairperson may, upon a written
request signed by the head of a lead
agency, extend an investigation for one
15-day period. A request to extend an
investigation must describe, with
particularity, the extraordinary
circumstances that warrant the
Chairperson extending the investigation.
The authority of the head of a lead
agency to request the extension of an
investigation may not be delegated to
any person other than the deputy head
(or equivalent thereof) of the lead
agency. If the Chairperson extends an
investigation pursuant to this paragraph
(e) with respect to a covered transaction,
the Committee shall promptly notify the
parties to the transaction of the
extension.
(f) For purposes of paragraph (e) of
this section, ‘‘extraordinary
circumstances’’ means circumstances
for which extending an investigation is
necessary and the appropriate course of
action due to a force majeure event or
to protect the national security of the
United States.’’
■ 21. Add § 800.510 to subpart E to read
as follows:
§ 800.510 Tolling of deadlines during lapse
in appropriations.

Any deadline or time limitation under
this subpart E shall be tolled during a
lapse in appropriations.
Subpart G—Provision and Handling of
Information
■

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22. Amend § 800.701 as follows:

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51321

a. In paragraph (a) remove ‘‘50 U.S.C.
App. 2155(a)’’ after ‘‘pursuant to’’ and
add in its place ‘‘50 U.S.C. 4555(a)’’;
■ b. In paragraph (c) remove ‘‘at http://
www.treas.gov/offices/internationalaffairs/cfius/index.shtml’’ and add in its
place ‘‘, currently available at https://
home.treasury.gov/policy-issues/
international/the-committee-on-foreigninvestment-in-the-united-states-cfius’’
after ‘‘website’’; and
■ c. In paragraph (d), remove ‘‘at http://
www.treas.gov/offices/internationalaffairs/cfius/index.shtml’’ and add in its
place ‘‘, currently available at https://
home.treasury.gov/policy-issues/
international/the-committee-on-foreigninvestment-in-the-united-states-cfius’’
after ‘‘website’’.
■ 23. Amend § 800.702 as follows:
■ a. Revise paragraph (a).
■ b. Redesignate paragraphs (b), (c), and
(d) as paragraphs (c), (d), and (e).
■ c. Add new paragraph (b).
■ d. In redesignated paragraph (e),
remove ‘‘50 U.S.C. App. 2155(d)’’ after
‘‘The provisions of’’ and add in its place
‘‘50 U.S.C. 4555(d)’’.
The revision and addition read as
follows:
■

§ 800.702

Confidentiality.

(a) Except as provided in paragraph
(b) of this section, any information or
documentary material filed with the
Committee pursuant to this part,
including information or documentary
material filed pursuant to § 800.401(f),
shall be exempt from disclosure under
5 U.S.C. 552, and no such information
or documentary material may be made
public.
(b) Paragraph (a) of this section shall
not prohibit disclosure of the following:
(1) Information relevant to any
administrative or judicial action or
proceeding;
(2) Information to Congress or to any
duly authorized committee or
subcommittee of Congress;
(3) Information important to the
national security analysis or actions of
the Committee to any domestic
governmental entity, or to any foreign
governmental entity of a United States
ally or partner, under the exclusive
direction and authorization of the
Chairperson, only to the extent
necessary for national security
purposes, and subject to appropriate
confidentiality and classification
requirements; or
(4) Information that the parties have
consented to be disclosed to third
parties.’’; and
*
*
*
*
*
Subpart H—Penalties
■

24. Amend § 800.801 as follows:

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a. In paragraph (a) remove ‘‘, after the
effective date, intentionally or through
gross negligence,’’;
■ b. Revise paragraph (b);
■ c. Redesignate paragraph (g) as
paragraph (h); and
■ d. Add a new paragraph (g).
The revision and addition read as
follows:
■

§ 800.801

Penalties.

*

*
*
*
*
(b) Any person who, after the effective
date, violates, intentionally or through
gross negligence, a material provision of
a mitigation agreement entered into
before October 11, 2018, with, a material
condition imposed before October 11,
2018 by, or an order issued before
October 11, 2018 by, the United States
under section 721(l) may be liable to the
United States for a civil penalty not to
exceed $250,000 per violation or the
value of the transaction, whichever is
greater. Any person who violates a
material provision of a mitigation
agreement entered into on or after
October 11, 2018, with, a material
condition imposed on or after October
11, 2018, by, or an order issued on or
after October 11, 2018, by, the United
States under section 721(l) may be liable
to the United States for a civil penalty
not to exceed $250,000 per violation or
the value of the transaction, whichever
is greater.’’;
*
*
*
*
*
(g) Section 1001 of title 18, United
States Code, shall apply to all
information provided to the Committee
under section 721 by any party to a
covered transaction.
*
*
*
*
*
■ 25. Add § 800.802 to subpart H to read
as follows:

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§ 800.802

Effect of lack of compliance.

If, at any time after a mitigation
agreement or condition is entered into
or imposed under section 721(l), the
Committee or lead agency, as the case
may be, determines that a party or
parties to the agreement or condition are
not in compliance with the terms of the
agreement or condition, the Committee
or lead agency may, in addition to the
authority of the Committee to impose
penalties pursuant to section 721(h) and
to unilaterally initiate a review of any
covered transaction pursuant to section
721(b)(1)(D)(iii):
(a) Negotiate a plan of action for the
party or parties to remediate the lack of
compliance, with failure to abide by the
plan or otherwise remediate the lack of
compliance serving as the basis for the
Committee to find a material breach of
the agreement or condition;

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(b) Require that the party or parties
submit a written notice under clause (i)
of section 721(b)(1)(C) with respect to a
covered transaction initiated after the
date of the determination of
noncompliance and before the date that
is five years after the date of the
determination to the Committee to
initiate a review of the transaction
under section 721(b); or
(c) Seek injunctive relief.
Dated: October 4, 2018.
Heath Tarbert,
Assistant Secretary for International Markets.
[FR Doc. 2018–22187 Filed 10–10–18; 8:45 am]
BILLING CODE 4810–25–P

DEPARTMENT OF THE TREASURY
Office of Investment Security
31 CFR Part 801
RIN 1505–AC61

Determination and Temporary
Provisions Pertaining to a Pilot
Program To Review Certain
Transactions Involving Foreign
Persons and Critical Technologies
Office of Investment Security,
Department of the Treasury.
ACTION: Interim rule.
AGENCY:

This interim rule sets forth
the scope of, and procedures for, a pilot
program of the Committee on Foreign
Investment in the United States (CFIUS,
or the Committee) under section 721 of
the Defense Production Act of 1950, as
amended by the Foreign Investment
Risk Review Modernization Act of 2018
(FIRRMA). Pursuant to section 1727(c)
of FIRRMA, this pilot program
implements the authorities provided in
two sections of FIRRMA that did not
take effect upon the statute’s enactment.
First, the pilot program expands the
scope of transactions subject to review
by CFIUS to include certain investments
involving foreign persons and critical
technologies. Second, the pilot program
makes effective FIRRMA’s mandatory
declarations provision for all
transactions that fall within the specific
scope of the pilot program. The pilot
program is temporary and will end no
later than March 5, 2020.
DATES: Effective date: These provisions
are effective November 10, 2018.
Applicability date: See § 801.103.
Comment date: Written comments
must be received by November 10, 2018.
ADDRESSES: Written comments on the
interim rule may be submitted through
one of two methods:
• Electronic Submission of
Comments: Interested persons may
SUMMARY:

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submit comments electronically through
the Federal government eRulemaking
Portal at https://www.regulations.gov.
Electronic submission of comments
allows the commenter maximum time to
prepare and submit a comment, ensures
timely receipt, and enables the
Department to make them available to
the public. Comments submitted
electronically through the https://
www.regulations.gov website can be
viewed by other commenters and
interested members of the public.
• Mail: Send to U.S. Department of
the Treasury, Attention: Thomas Feddo,
Deputy Assistant Secretary for
Investment Security, 1500 Pennsylvania
Avenue NW, Washington, DC 20220.
In general, Treasury will post all
comments to www.regulations.gov
without change, including any business
or personal information provided, such
as names, addresses, email addresses, or
telephone numbers. All comments
received, including attachments and
other supporting material, will be part
of the public record and subject to
public disclosure. You should only
submit information that you wish to
make publicly available.
FOR FURTHER INFORMATION CONTACT: For
questions about this interim rule,
contact: Thomas Feddo, Deputy
Assistant Secretary for Investment
Security; Laura Black, Director of
Investment Security Policy and
International Relations; Meena Sharma,
Senior Policy Advisor; or Juliana
Gabrovsky, Policy Advisor, at U.S.
Department of the Treasury, 1500
Pennsylvania Avenue NW, Washington,
DC 20220; telephone: (202) 622–3425;
email: CFIUS.pilotprogram@
treasury.gov.
SUPPLEMENTARY INFORMATION:
I. Background
The Foreign Investment Risk Review
Modernization Act of 2018 (FIRRMA),
Subtitle A of Title XVII of Public Law
115–232 (Aug. 13, 2018), amended
section 721 of the Defense Production
Act of 1950 (DPA). Prior to the
enactment of FIRRMA, section 721 of
the DPA (section 721) authorized the
President, acting through the
Committee, to review mergers,
acquisitions, and takeovers by or with
any foreign person which could result
in foreign control of any person engaged
in interstate commerce in the United
States, to determine the effects of such
transactions on the national security of
the United States. FIRRMA modified
and broadened the authorities of the
President and CFIUS under section 721
in several ways including, without
limitation, by expanding the scope of

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