51322 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Rules and Regulations 

■ 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: 

§ 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; 

(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 

AGENCY: Office of Investment Security, 

Department of the Treasury. 

ACTION: Interim rule. 

SUMMARY: 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 

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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Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Rules and Regulations 51323 

1Temporary regulations with no specific 

expiration date are ‘‘interim rules’’ for purposes of 

Federal Register classification. 

foreign investments in the United States 

subject to national security review 

pursuant to section 721. 

Section 1727(a) of FIRRMA made 

certain provisions of FIRRMA effective 

immediately upon enactment on August 

13, 2018. Section 1727(b) of FIRRMA, 

however, delayed the effectiveness of 

any provision of FIRRMA not specified 

in section 1727(a) until the earlier of: (1) 

The date that is 18 months after the date 

of enactment of FIRRMA (i.e., February 

13, 2020); or (2) the date that is 30 days 

after publication in the Federal Register 

of a determination by the chairperson of 

CFIUS that the regulations, 

organizational structure, personnel, and 

other resources necessary to administer 

the new provisions are in place. 

Notwithstanding section 1727(b), 

section 1727(c) of FIRRMA authorizes 

CFIUS to conduct one or more pilot 

programs to implement any authority 

provided pursuant to any provision of, 

or amendment made by, FIRRMA that 

did not take effect immediately upon 

enactment. Section 1727(c) states that a 

pilot program may not commence until 

the date that is 30 days after publication 

in the Federal Register of a 

determination by the chairperson of 

CFIUS of the scope of, and procedures 

for, the pilot program. This document 

and the interim rule set forth herein 

constitute the required determination of 

the scope of, and procedures for, a 

CFIUS pilot program relating to critical 

technologies pursuant to section 

1727(c)(2) of FIRRMA. 

II. Waiver of Public Comment 

Requirement for Temporary Provisions 

The interim rule set forth in this 

document implements a pilot program, 

pursuant to section 721, relating to 

foreign investment into certain U.S. 

businesses that produce, design, test, 

manufacture, fabricate, or develop one 

or more critical technologies. 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, the pilot 

program to be implemented pursuant to 

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 

basis 1; and (3) the publication of such 

temporary regulation 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 regulations 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, the 

Secretary of the Treasury 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, pursuant to section 1727(c)(1) 

of FIRRMA, the authority for a pilot 

program is time limited to no more than 

570 days following the date of 

FIRRMA’s enactment, making any 

FIRRMA pilot program inherently 

temporary. Consistent with that 

limitation and the requirement of 

section 709(b)(2)(B) of the DPA, these 

regulations are issued on a temporary 

basis. Section 801.101 sets forth the 

duration of the pilot program 

regulations. 

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. 

Given the pilot program’s scope and 

objectives, considering and responding 

to public comments prior to the 

effectiveness of this interim rule would 

be inconsistent with U.S. foreign affairs 

interests because it would delay the 

effective date of the pilot program, 

which could provide threat actors with 

time to harm U.S. national security by 

quickly acquiring U.S. critical 

technologies, contrary to the urgent and 

compelling circumstances justifying this 

program, as discussed below. 

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 pilot program with the 

need for public participation in the 

formulation of any final rule. 

III. Urgent and Compelling 

Circumstances for the Pilot Program 

The passage of FIRRMA was based 

upon concerns that, as noted at section 

1702(b)(4) of FIRRMA, ‘‘the national 

security landscape has shifted in recent 

years, and so has the nature of the 

investments that pose the greatest 

potential risk to national security. . . .’’ 

FIRRMA provides CFIUS time to 

develop the resources and regulations 

necessary to administer all of FIRRMA’s 

provisions before the statute becomes 

fully effective. Notwithstanding this, 

FIRRMA also provides the authority for 

pilot programs and, in doing so, 

recognizes the need to immediately 

assess and address significant risks to 

national security posed by some foreign 

investments. 

In order to be effective in identifying 

and addressing these national security 

risks, FIRRMA recognizes that there 

may be circumstances in which the 

Committee deems it appropriate to 

require mandatory declarations for 

specific types of transactions. This pilot 

program establishes mandatory 

declarations for certain transactions 

involving investments by foreign 

persons in certain U.S. businesses that 

produce, design, test, manufacture, 

fabricate, or develop one or more critical 

technologies. The purpose of the pilot 

program is to assess and address 


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51324 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Rules and Regulations 

ongoing risks to the national security of 

the United States resulting from two 

urgent and compelling circumstances: 

(1) The ability and willingness of some 

foreign parties to obtain equity interests 

in U.S. businesses in order to affect 

certain decisions regarding, or to obtain 

certain information relating to, critical 

technologies; and (2) the rapid pace of 

technological change in certain U.S. 

industries. The Committee has 

developed this pilot program without 

exempting any country from the 

mandatory declaration requirement in 

order to understand and examine, in a 

comprehensive manner, the nature of 

foreign direct investment as it relates to 

critical technologies and the pilot 

program industries. Further, foreign 

investors that may present national 

security concerns are becoming 

increasingly sophisticated in structuring 

investments in a manner that may 

obfuscate those concerns, including by 

utilizing entities in other jurisdictions. 

As a result, CFIUS is implementing this 

pilot program on a global basis. The 

pilot program will inform the full 

implementation of FIRRMA, including 

the Committee’s approach with respect 

to the country specification provision in 

FIRRMA. 

Technological superiority has long 

underpinned the United States’ military 

strategy and national security 

innovation base. The Administration 

supports protecting our national 

security from emerging risks while 

maintaining an open investment policy. 

Although the vast majority of foreign 

direct investment in the United States 

provides economic benefits to our 

nation—including the promotion of 

economic growth, productivity, 

competitiveness, and job creation— 

some foreign direct investment 

threatens to undermine the 

technological superiority that is critical 

to U.S. national security. Specifically, 

the threat to critical technology 

industries is more significant than ever 

as some foreign parties seek, through 

various means, to acquire sensitive 

technologies with relevance for U.S. 

national security. Foreign investment in 

U.S. critical technologies has grown 

significantly in the past decade, and an 

enhanced framework is needed to 

address the potential impacts of this 

growth on U.S. national security. 

Prior to FIRRMA, CFIUS’s authorities 

did not sufficiently address the new and 

emerging risks that foreign direct 

investment can pose to U.S. 

technological superiority. For example, 

foreign investors do not need to acquire 

a controlling interest in order to affect 

certain decisions made by, or obtain 

certain information from, a U.S. 

business with respect to the use, 

development, acquisition, or release of 

critical technology. CFIUS’s authorities, 

however, only applied to transactions 

that could result in foreign control of a 

U.S. business. Consequently, CFIUS had 

no authority to prevent a foreign entity 

from acquiring a non-controlling 

interest in a U.S. business that 

produces, designs, tests, manufactures, 

fabricates, or develops one or more 

critical technologies. FIRRMA provides 

CFIUS new authorities to address the 

national security concerns that may 

arise from these investments, but those 

authorities were not immediately 

effective upon FIRRMA’s enactment. 

Together, the pace of technological 

change in certain critical technology 

industries, the significant growth in 

foreign investment in certain industries 

relevant to national security, and the 

current inability of CFIUS to examine 

certain non-controlling transactions 

creates urgent and compelling 

circumstances for the pilot program that 

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. Implementing the 

pilot program expeditiously is necessary 

both to protect critical technologies and 

to evaluate how best to implement 

certain aspects of FIRRMA in the longterm. The temporary nature of the pilot 

program and the short timeframe within 

which to gather data to help inform the 

full implementation of FIRRMA compel 

a rapid implementation of this interim 

rule. Delaying effectiveness of the 

interim rule would create an 

unacceptable risk of erosion of U.S. 

technological superiority. Without 

immediate action, foreign parties will be 

able to influence the use of, and 

decisions made by U.S. businesses with 

respect to, critical technologies through 

the types of investments FIRRMA is 

intended to address. The list of pilot 

program industries identified in Annex 

A has been carefully developed by the 

U.S. government to narrowly scope the 

pilot program to include only those 

industries in which the threat of erosion 

of technological superiority from some 

foreign direct investment requires 

immediate action. As noted above, the 

Committee invites comments on this 

interim rule, will consider any 

comments received, and if the 

Committee intends to make the 

provisions of this interim rule final, will 

include in any final rule responses to 

such comments. 

Notwithstanding the issuance of this 

interim rule, the regulations at part 800 

remain in effect. 

IV. Discussion of the Pilot Program 

Interim Rule 

Subpart-by-Subpart Overview of the 

Pilot Program Interim Rule 

The interim rule builds upon existing 

rules governing CFIUS’s review of 

transactions for national security 

considerations and adds a pilot program 

with two purposes. First, the pilot 

program expands the scope of 

transactions subject to review by CFIUS 

to include transactions subject to a 

portion of FIRRMA’s ‘‘other 

investments’’ provision. Second, the 

pilot program makes effective FIRRMA’s 

mandatory declarations provision for 

transactions that fall within the specific 

scope of the pilot program. The scope, 

procedures, and terms used in the pilot 

program are specific to the pilot 

program and subject to change in the 

proposed final rule implementing 

FIRRMA. The following discussion 

provides an overview of each subpart of 

the interim rule. 

Subpart A 

Subpart A sets forth the scope of the 

pilot program, its applicability based on 

the timing of certain events relating to 

a transaction, and the effect of the pilot 

program on other laws. FIRRMA 

authorizes the Committee to conduct 

one or more pilot programs to 

implement any authority provided 

pursuant to any provision of, or 

amendment made by, FIRRMA that did 

not take effect on the date of its 

enactment. This pilot program expands 

the scope of transactions subject to 

review by CFIUS to include certain 

investments by foreign persons in 

certain U.S. businesses that produce, 

design, test, manufacture, fabricate, or 

develop one or more critical 

technologies. The pilot program also 

requires the submission of declarations 

with basic information regarding certain 

covered transactions, unless the parties 

elect to file a notice instead. The 

purpose of implementing a pilot 

program addressing these areas is to 

confront the rapid changes in certain 

critical technology industries, the 

significant growth of certain types of 

foreign investment in those industries, 

and the current inability of CFIUS to 

review non-controlling transactions, 

which creates an unacceptable risk of 

undermining U.S. technological 

superiority in industries with national 

security implications. The regulations in 

this interim rule supplement existing 

regulations implementing section 721 of 

the DPA, which remain in effect. 

Consistent with section 1727(c)(1) of 

FIRRMA, the pilot program 

implemented through these regulations 


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Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Rules and Regulations 51325 

will end no later than March 5, 2020, 

the date that is 570 days after the 

enactment of FIRRMA. These 

regulations will be amended, replaced, 

or removed no later than the date on 

which the pilot program ends. 

As set forth in section 801.103(b), 

these regulations do not apply to 

transactions for which the completion 

date is prior to the pilot program 

effective date, or transactions for which 

the parties have executed a binding 

written agreement or other document 

establishing the material terms of the 

transaction prior to October 11, 2018. 

Consistent with CFIUS’s existing 

regulations under part 800, the pilot 

program does not affect or limit other 

authorities of the government. 

Subpart B 

Subpart B sets forth defined terms 

used in the remainder of the pilot 

program regulations. The following 

discussion describes several key terms 

from subpart B. 

Section 801.203. FIRRMA defines the 

term ‘‘investment’’ as including the 

acquisition of a ‘‘contingent equity 

interest,’’ but does not define the term 

‘‘contingent equity interest.’’ The pilot 

program interim rule provides a 

definition for the term contingent equity 

interest. 

Section 801.204. The term critical 

technologies is defined consistent with 

the definition set forth in FIRRMA. 

Section 801.206. The term investment 

is defined consistent with the definition 

set forth in FIRRMA. 

Section 801.207. FIRRMA provides 

clarification that certain types of 

investments by foreign persons as 

limited partners or the equivalent on an 

advisory board or a committee of an 

investment fund will not be considered 

‘‘other investments’’ for the purposes of 

FIRRMA, as reflected in section 801.304 

of these regulations. The term 

investment fund is defined in subpart B 

by reference to the Investment Company 

Act of 1940 (15 U.S.C. 80a–1 et seq.). 

Section 801.208. In this interim rule, 

the Committee is implementing the 

portion of the definition of the term 

material nonpublic technical 

information in FIRRMA that is related to 

critical technologies. The portion of 

FIRRMA’s definition of the term 

‘‘material nonpublic technical 

information’’ that relates to critical 

infrastructure is not part of this pilot 

program. 

Section 801.209. The term pilot 

program covered investment 

implements most of the definition of 

‘‘other investment’’ in FIRRMA. The 

pilot program, however, does not 

implement a portion of the third part of 

the ‘‘other investment’’ definition in 

FIRRMA regarding involvement, other 

than through voting of shares, in 

substantive decisionmaking regarding 

sensitive personal data of U.S. citizens 

or critical infrastructure. 

Section 801.210. The term pilot 

program covered transaction includes 

the new concept of ‘‘pilot program 

covered investment,’’ described above. 

The term pilot program covered 

transaction also includes transactions 

that could result in foreign control of a 

U.S. business, consistent with the 

language in FIRRMA, but only to the 

extent that the U.S. business is a pilot 

program U.S. business. 

Section 801.213. The term pilot 

program U.S. business includes any 

U.S. business that produces, designs, 

tests, manufactures, fabricates, or 

develops a critical technology that is 

either utilized in connection with the 

U.S. business’s activity in one or more 

pilot program industries, or designed by 

the U.S. business specifically for use in 

one or more pilot program industries. 

For purposes of the pilot program, this 

definition has been narrowly scoped to 

allow CFIUS to assess and address the 

foreign investment transactions most 

likely to raise concerns regarding the 

technological superiority of the United 

States in industries of national security 

importance. 

Subpart C 

Subpart C describes the coverage of 

the pilot program with a focus on pilot 

program covered investments. The 

analysis as to whether a transaction 

could result in control of a pilot 

program U.S. business by a foreign 

person generally follows the same 

analysis as under part 800, with the 

additional requirement that the U.S. 

business in question must be a pilot 

program U.S. business. The examples 

provided throughout subpart C are 

intended to illustrate the application of 

the definitions to the particular 

hypothetical situations. The examples 

are presented for the purpose of aiding 

the understanding of readers. They 

neither limit the definitions set forth in 

subpart B nor exhaust the scenarios to 

which such definitions could apply. 

Subpart C illustrates that, where 

CFIUS has concluded all action under 

section 721 for a pilot program covered 

investment (regardless of whether the 

notification was made through a 

declaration or a notice), any incremental 

investment that meets the requirements 

of section 801.209, even if involving the 

same foreign person in the same pilot 

program U.S. business, will nevertheless 

be a pilot program covered investment 

and subject to this pilot program. 

Subpart C also implements portions of 

section 1703 of FIRRMA that limit the 

application of CFIUS authority over 

certain types of investment fund 

investments and provides an explicit 

exception for investments involving air 

carriers. 

Subpart D 

Subpart D requires that the parties to 

a pilot program covered transaction 

submit to the Committee a declaration 

regarding the transaction, unless the 

parties elect to submit a written notice 

pursuant to subpart E instead. 

Generally, mandatory declarations must 

be made at least 45 days before the 

expected completion date of the 

transaction. As noted in section 

801.401(d), the regulatory safe harbor 

described in section 800.204(e) is not 

available for pilot program covered 

transactions for which the Committee 

completes all action under section 721 

on the basis of a declaration, 

irrespective of whether the transaction 

could result in foreign control of a U.S. 

business. Any subsequent or 

incremental acquisition that constitutes 

a pilot program covered transaction 

must be submitted to CFIUS through a 

notice or declaration. For the avoidance 

of doubt, transactions that could result 

in control of a pilot program U.S. 

business by a foreign person and that 

are filed as a written notice, and for 

which the Committee completes all 

action under section 721, would receive 

the benefit of the regulatory safe harbor 

described in section 800.204(e). 

FIRRMA distinguishes declarations 

from notices in three primary respects: 

(1) The length of the submission; (2) the 

time for CFIUS’s consideration of the 

submission; and (3) the Committee’s 

options for disposition of the 

submission. The interim rule recognizes 

these distinctions in the manner 

described below. 

First, section 801.403 sets forth the 

information required in a declaration, 

which is consistent with FIRRMA’s 

requirement that CFIUS establish 

declarations as ‘‘abbreviated notices that 

would not generally exceed 5 pages in 

length.’’ As part of the declaration 

process, parties will have the 

opportunity to voluntarily stipulate that 

the transaction is a pilot program 

covered transaction and, if so, whether 

the transaction could result in control of 

a pilot program U.S. business by a 

foreign person and whether the 

transaction is a foreign-government 

controlled transaction. Such 

stipulations would streamline certain 

aspects of CFIUS’s review of a 

declaration, thereby reducing the 

burden on CFIUS and potentially 


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leading to a faster resolution for the 

submitting parties. 

Second, consistent with FIRRMA, 

section 801.404 requires that the 

Committee take action on a declaration 

within 30 days of the Committee’s 

receipt of the declaration from the Staff 

Chairperson. The Staff Chairperson will 

circulate the declaration to the 

Committee after inspecting the 

declaration and determining it to be 

complete. This implements FIRRMA’s 

distinction that CFIUS complete review 

of a notice within 45 days and take 

action upon a declaration within 30 

days. 

Finally, section 801.407 implements 

FIRRMA’s mandate that the Committee 

take one of four actions with respect to 

a declaration: (1) Request that the 

parties file a notice; (2) inform the 

parties that CFIUS cannot complete 

action under section 721 on the basis of 

the declaration, and that they may file 

a notice to seek written notification 

from the Committee that the Committee 

has completed all action under section 

721 with respect to the transaction; (3) 

initiate a unilateral review of the 

transaction through an agency notice; or 

(4) notify the parties that CFIUS has 

completed all action under section 721. 

Section 801.407 also makes clear that 

parties may not submit more than one 

declaration for the same or a 

substantially similar transaction without 

approval from the Staff Chairperson. 

The purpose of this is to avoid 

situations where, due to the abbreviated 

information requests, a party or parties 

file a declaration even before the 

material terms of a transaction have 

been agreed upon, subsequently 

complete their negotiations, and attempt 

to withdraw and resubmit a new 

declaration for the same or a 

substantially similar transaction. 

The distinctions between notices and 

declarations outlined here—that is, the 

complexity of the submission and the 

parties’ desired timing—underpin the 

primary interrelated factors that parties 

should consider when determining 

whether a pilot program covered 

transaction is best notified to the 

Committee through a declaration or a 

notice. 

As noted above, the scope, 

procedures, and certain terms used in 

the pilot program are specific to the 

pilot program and subject to change in 

the proposed final rule implementing 

FIRRMA. 

Subpart E 

Subpart E generally applies the 

existing CFIUS procedural regulations 

in part 800 to notices of pilot program 

covered transactions. This subpart 

recognizes that parties, at their 

discretion, may elect to file a notice for 

a pilot program covered transaction 

instead of a declaration. The purpose of 

the subpart is to clarify that, where 

parties elect to file a notice instead of a 

declaration, or file a notice for a pilot 

program covered transaction following 

the Committee’s action on a declaration, 

the procedural elements of CFIUS’s 

existing regulations under part 800 

generally will apply to that notice. 

Certain additional information will be 

required from the parties with respect to 

any pilot program covered investment 

notified to the Committee through a 

notice. 

For the avoidance of doubt, while the 

pilot program implements certain 

provisions of FIRRMA that allow CFIUS 

to review certain non-controlling 

transactions involving critical 

technology in specified industries, it 

does not change CFIUS’s analysis with 

respect to a transaction that could result 

in foreign control of a U.S. business 

under the regulations at part 800. 

Additionally, a party (or parties) to a 

pilot program covered transaction that 

has filed a written notice pursuant to 

section 800.401(a) regarding the 

transaction may not submit to the 

Committee a declaration regarding the 

same transaction, or a substantially 

similar transaction, without the 

approval of the Staff Chairperson. The 

purpose of the declaration is to allow for 

an assessment of certain information 

relating to certain transactions that may 

not, because of the scope and other 

factors, necessitate the collection of all 

of the information set forth in section 

800.402(c). As noted above, parties 

should consider whether the transaction 

is of the type that would be appropriate 

for a declaration, or whether it would be 

more appropriate to notify the 

Committee of the transaction by filing a 

written notice. 

Subpart F 

Subpart F implements authorities 

provided pursuant to, and amendments 

made by, FIRRMA. 

Executive Order 12866 

These regulations are not subject to 

the general requirements of Executive 

Order 12866 because they relate to a 

foreign affairs function of the United 

States pursuant to section 3(d)(2) of that 

order. 

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 

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 DPA are not 

subject to the rulemaking provisions of 

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 a pilot program 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 

of proposed rulemaking as set forth in 

the RFA. Further, the mechanisms for 


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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 801 

Foreign investments in the United 

States, Investigations, National defense, 

Reporting and recordkeeping 

requirements. 

■ Accordingly, under the authority 

provided by section 1727(c) of FIRRMA, 

for the reasons stated in the preamble, 

the Department of the Treasury amends 

31 CFR chapter VIII by adding part 801 

as follows: 

PART 801—PILOT PROGRAM TO 

REVIEW CERTAIN TRANSACTIONS 

INVOLVING FOREIGN PERSONS AND 

CRITICAL TECHNOLOGIES 

Subpart A—General 

Sec. 

801.101 Scope. 

801.102 Effect on other law. 

801.103 Applicability rule. 

Subpart B—Definitions 

801.201 General. 

801.202 Completion date. 

801.203 Contingent equity interest. 

801.204 Critical technologies. 

801.205 FIRRMA. 

801.206 Investment. 

801.207 Investment fund. 

801.208 Material nonpublic technical 

information. 

801.209 Pilot program covered investment. 

801.210 Pilot program covered transaction. 

801.211 Pilot program effective date. 

801.212 Pilot program industry. 

801.213 Pilot program U.S. business. 

801.214 Unaffiliated pilot program U.S. 

business. 

Subpart C—Pilot Program Covered 

Transactions 

801.301 Control. 

801.302 Transactions that are pilot program 

covered transactions. 

801.303 Transactions that are not pilot 

program covered transactions. 

801.304 Treatment of certain investment 

fund investments. 

801.305 Exception for air carriers. 

801.306 Timing rule for contingent equity 

interests. 

Subpart D—Mandatory Declarations Under 

the Pilot Program 

801.401 Mandatory declarations under the 

pilot program. 

801.402 Procedures for declarations under 

the pilot program. 

801.403 Contents of declarations under the 

pilot program. 

801.404 Beginning of thirty-day period. 

801.405 General. 

801.406 Rejection, disposition, or 

withdrawal of declarations. 

801.407 Committee actions. 

801.408 Confidentiality. 

801.409 Penalties. 

Subpart E—Notice of Pilot Program 

Covered Transaction 

801.501 Notice of pilot program covered 

transactions. 

801.502 Applicability of part 800. 

801.503 Additional contents of written 

notice. 

801.504 Agency notice of pilot program 

covered transactions. 

Subpart F—Implementation of Certain 

Authority Provided in FIRRMA 

801.601 Implementation of certain 

authority regarding covered transactions. 

801.602 Implementation of certain 

authority regarding mandatory 

declarations. 

Annex A to Part 801—Industries 

Authority: 50 U.S.C. 4565; Pub. L. 115– 

232. 

Subpart A—General 

§ 801.101 Scope. 

The regulations in this part 

implement a pilot program in 

accordance with section 1727(c) of the 

Foreign Investment Risk Review 

Modernization Act of 2018. Pursuant to 

section 1727(c), the pilot program 

implements authorities provided in 

certain provisions of, or amendments 

made by, the Foreign Investment Risk 

Review Modernization Act of 2018 that 

did not take effect on the date of its 

enactment. This pilot program expands 

the scope of transactions reviewable by 

CFIUS to include certain investments by 

foreign persons in certain U.S. 

businesses that produce, design, test, 

manufacture, fabricate, or develop one 

or more critical technologies. The pilot 

program also requires that parties to a 

pilot program covered transaction notify 

CFIUS of the transaction by either 

submitting a declaration or filing a 

written notice. The regulations in this 

part supplement the existing regulations 

implementing section 721 of the 

Defense Production Act of 1950, as 

amended, under part 800 to Title 31 

CFR Chapter VIII, which remain in 

effect. The pilot program implemented 

through these regulations will end no 

later than the date on which the full 

regulations implementing the Foreign 

Investment Risk Review Modernization 

Act of 2018 become effective, and in no 

event later than the date that is 570 days 

after the enactment of the Foreign 

Investment Risk Review Modernization 

Act of 2018. These regulations will be 

amended, replaced, or removed no later 

than the date on which the pilot 

program ends. 

§ 801.102 Effect on other law. 

Unless otherwise indicated, nothing 

in this part shall be construed as 

altering or affecting any other authority, 

process, regulation, investigation, 

enforcement measure, or review 

provided by or established under any 

other provision of federal law, including 

the International Emergency Economic 

Powers Act (50 U.S.C. 1701–1706), or 

any other authority of the President or 

the Congress under the Constitution of 

the United States. 

§ 801.103 Applicability rule. 

(a) Except as provided in paragraph 

(b) of this section and otherwise in this 

part, the regulations in this part apply 

from the pilot program effective date. 

(b) The regulations in this part do not 

apply to any transaction for which: 

(1) The completion date is prior to the 

pilot program effective date; or 

(2) The following has occurred before 

October 11, 2018: 

(i) The parties to the transaction have 

executed a binding written agreement or 

other document establishing the 

material terms of the transaction; 

(ii) A party has made a public offer to 

shareholders to buy shares of a pilot 

program U.S. business; or 

(iii) A shareholder has solicited 

proxies in connection with an election 

of the board of directors of a pilot 

program U.S. business or has requested 

the conversion of convertible voting 

securities. 

Subpart B—Definitions 

§ 801.201 General. 

Unless otherwise indicated, terms 

used in the regulations in this part that 

are defined in §§ 800.201 through 

800.228 of this chapter have the 

meanings set forth therein. 

§ 801.202 Completion date. 

The term completion date means, 

with respect to a transaction, the date 

upon which an ownership interest, 

including a contingent equity interest, is 

conveyed, assigned, delivered, or 

otherwise transferred to a person, or a 

change in rights occurs. 


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§ 801.203 Contingent equity interest. 

The term contingent equity interest 

means a financial instrument that 

currently does not entitle its owner or 

holder to voting rights but is convertible 

into an equity interest with voting 

rights. 

§ 801.204 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. 

§ 801.205 FIRRMA. 

The term FIRRMA means the Foreign 

Investment Risk Review Modernization 

Act of 2018, Subtitle A of Title XVII of 

Public Law 115–232 (Aug. 13, 2018). 

§ 801.206 Investment. 

The term investment means the 

acquisition of equity interest, including 

contingent equity interest. 

§ 801.207 Investment fund. 

The term investment fund means any 

entity that is an ‘‘investment company,’’ 

as defined in section 3(a) of the 

Investment Company Act of 1940 (15 

U.S.C. 80a–1 et seq.), or would be an 

‘‘investment company’’ but for one or 

more of the exemptions provided in 

section 3(b) or 3(c) thereunder. 

§ 801.208 Material nonpublic technical 

information. 

(a) The term material nonpublic 

technical information means 

information that is not available in the 

public domain, and is necessary to 

design, fabricate, develop, test, produce, 

or manufacture critical technologies, 

including processes, techniques, or 

methods. 

(b) The term material nonpublic 

technical information does not include 

financial information regarding the 

performance of an entity. 

§ 801.209 Pilot program covered 

investment. 

The term pilot program covered 

investment means an investment, direct 

or indirect, by a foreign person in an 

unaffiliated pilot program U.S. business 

that could not result in control by a 

foreign person of a pilot program U.S. 

business and that affords the foreign 

person: 

(a) Access to any material nonpublic 

technical information in the possession 

of the pilot program U.S. business; 

(b) Membership or observer rights on 

the board of directors or equivalent 

governing body of the pilot program 

U.S. business or the right to nominate 

an individual to a position on the board 

of directors or equivalent governing 

body of the pilot program U.S. business; 

or 

(c) Any involvement, other than 

through voting of shares, in substantive 

decisionmaking of the pilot program 

U.S. business regarding the use, 

development, acquisition, or release of 

critical technology. 

§ 801.210 Pilot program covered 

transaction. 

The term pilot program covered 

transaction means: 

(a) Any pilot program covered 

investment; or 

(b) Any transaction by or with any 

foreign person that could result in 

foreign control of any pilot program U.S. 

business, including such a transaction 

carried out through a joint venture. 

§ 801.211 Pilot program effective date. 

The term pilot program effective date 

means November 10, 2018. 

§ 801.212 Pilot program industry. 

The term pilot program industry 

means any industry identified in Annex 

A to part 801 by reference to the North 

American Industry Classification 

System (NAICS). 

§ 801.213 Pilot program U.S. business. 

The term pilot program U.S. business 

means any U.S. business that produces, 

designs, tests, manufactures, fabricates, 

or develops a critical technology that is: 

(a) Utilized in connection with the 

U.S. business’s activity in one or more 

pilot program industries; or 

(b) Designed by the U.S. business 

specifically for use in one or more pilot 

program industries. 

§ 801.214 Unaffiliated pilot program U.S. 

business. 

The term unaffiliated pilot program 

U.S. business means, with respect to a 

foreign person, a pilot program U.S. 

business in which that foreign person 

does not directly hold more than fifty 

percent of the outstanding voting 

interest or have the right to appoint 

more than half of the members of the 

board of directors or equivalent 

governing body. 

Subpart C—Pilot Program Covered 

Transactions 

§ 801.301 Control. 

For the sole purpose of determining 

whether a transaction could result in 

control of a pilot program U.S. business 

by a foreign person, the provisions set 

forth in subpart C of this part (excluding 

§ 800.302(b) of this chapter and the 

examples thereunder) regarding covered 

transactions shall apply to any pilot 

program covered transaction declared to 

the Committee pursuant to § 801.401 or 

notified to the Committee pursuant to 

§ 801.501. 

§ 801.302 Transactions that are pilot 

program covered transactions. 

Transactions that are pilot program 

covered transactions include, without 

limitation: 

(a) A transaction that meets the 

requirements of § 801.209, irrespective 

of the percentage of voting interest 

acquired. 

Example 1. Corporation A, a foreign 

person, proposes to acquire a four percent, 

non-controlling equity interest in 

Corporation B. Corporation B is a U.S. 

business that manufactures a critical 

technology as part of its business in a pilot 

program industry. Corporation B is therefore 

a pilot program U.S. business. Pursuant to 

the terms of the investment, a designee of 

Corporation A will have the right to observe 

the meetings of the board of directors of 

Corporation B. The proposed transaction is a 

pilot program covered investment and 

therefore a pilot program covered transaction. 

Example 2. Corporation A, a foreign 

person, proposes to acquire a four percent, 

non-controlling equity interest in 

Corporation B, a pilot program U.S. business 

as described above. Pursuant to the terms of 

the investment, Corporation A has approval 

rights with respect to Corporation B’s 

licensing of a critical technology to third 

parties. Corporation A is therefore involved 


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in substantive decisionmaking with respect 

to Corporation B and the proposed 

transaction is a pilot program covered 

investment and a pilot program covered 

transaction. 

(b) A transaction that meets the 

requirements of § 801.209, irrespective 

of the fact that the Committee 

concluded all action under section 721 

for a previous pilot program covered 

investment by the same foreign person 

in the same pilot program U.S. business, 

where such transaction involves the 

acquisition of access or rights described 

by § 801.209 in addition to those 

notified to the Committee in the 

transaction for which the Committee 

previously concluded action. 

Example. The Committee concludes all 

action under section 721 with respect to a 

pilot program covered investment by 

Corporation A, a foreign person, in which 

Corporation A acquires a four percent, noncontrolling equity interest with board 

observer rights in Corporation B, a pilot 

program U.S. business. One year later, 

Corporation A proposes to acquire an 

additional five percent equity interest in 

Corporation B, resulting in Corporation A 

holding a nine percent, non-controlling 

equity interest in Corporation B. Pursuant to 

the terms of the additional investment, 

Corporation A will be provided access to 

material nonpublic technical information in 

the possession of Corporation B to which 

Corporation A did not previously have 

access. The proposed transaction is a pilot 

program covered investment and therefore a 

pilot program covered transaction because 

the transaction involves both an acquisition 

of an equity interest in a pilot program U.S. 

business and a new right to access material 

nonpublic technical information. 

(c) A transaction that meets the 

requirements of § 801.209, irrespective 

of the fact that the critical technology 

produced, designed, tested, 

manufactured, fabricated, or developed 

by the pilot program U.S. business 

became controlled pursuant to section 

1758 of the Export Control Reform Act 

of 2018 after the pilot program effective 

date, unless any of the criteria set forth 

in paragraphs (b)(2)(i) through (b)(2)(iii) 

of § 801.103 is satisfied with respect to 

the transaction prior to the critical 

technology becoming controlled 

pursuant to section 1758 of the Export 

Control Reform Act of 2018. 

Example. Corporation A, a foreign person, 

has executed a written agreement 

establishing the material terms of a proposed 

non-controlling investment in Corporation B, 

a pilot program U.S. business. The proposed 

investment will afford Corporation A access 

to material nonpublic technical information 

in the possession of Corporation B. The only 

controlled technology produced, designed, 

tested, manufactured, fabricated, or 

developed by Corporation B became 

controlled pursuant to section 1758 of the 

Export Control Reform Act of 2018 after the 

pilot program effective date but prior to the 

date upon which the written agreement 

establishing the material terms of the 

investment was executed. The proposed 

transaction is a pilot program covered 

investment and therefore a pilot program 

covered transaction. 

(d) A transaction by or with any 

foreign person that could result in 

foreign control of any pilot program U.S. 

business. 

Example. Corporation A, a foreign person, 

acquires a 40 percent interest and the ability 

to determine important matters with respect 

to Corporation B, a U.S. pilot program 

business. The proposed transaction is a pilot 

program covered transaction. 

§ 801.303 Transactions that are not pilot 

program covered transactions. 

Transactions that are not pilot 

program covered transactions include, 

without limitation: 

(a) An investment by a foreign person 

in a U.S. business that manufactures a 

technology that it utilizes in connection 

with its activity in one or more pilot 

program industries, but does not 

produce, design, test, manufacture, 

fabricate, or develop one or more critical 

technologies. 

Example. Corporation A, a foreign person, 

proposes to acquire a four percent, noncontrolling equity interest in Corporation B, 

a U.S. business that operates in a pilot 

program industry. Pursuant to the terms of 

the investment, a designee of Corporation A 

will have the right to observe the meetings 

of the board of directors of Corporation B. 

Corporation B does not produce, design, test, 

manufacture, fabricate, or develop any 

critical technology. Assuming no other 

relevant facts, the proposed transaction is not 

a pilot program covered transaction. 

(b) An investment by a foreign person 

in a pilot program U.S. business that 

does not afford the foreign person any 

of the rights specified in paragraphs (a), 

(b), or (c) of § 801.209 or any control 

rights. 

Example. The Committee concluded all 

action under section 721 with respect to a 

pilot program covered transaction in which 

Corporation A, a foreign person, acquired a 

four percent, non-controlling equity interest 

with board observer rights in Corporation B, 

a pilot program U.S. business. One year later, 

Corporation A proposes to acquire an 

additional five percent equity interest in 

Corporation B, which would result in 

Corporation A holding a nine percent, noncontrolling equity interest in Corporation B. 

The proposed investment does not afford 

Corporation A any additional rights with 

respect to Corporation B, including the rights 

specified in § 801.209. Assuming no other 

relevant facts, the proposed transaction is not 

a pilot program covered transaction. 

(c) A transaction that results or could 

result in control by a foreign person of 

a U.S. business that is not a pilot 

program U.S. business. 

Example. Corporation A, a foreign person, 

proposes to purchase all of the shares of 

Corporation B, which is a U.S. business that 

operates in a pilot program industry but does 

not produce, design, test, manufacture, 

fabricate, or develop any critical technology. 

As the sole owner, Corporation A will have 

the right to elect directors and appoint other 

primary officers of Corporation B. Assuming 

no other relevant facts, the proposed 

transaction is not a pilot program covered 

transaction. It is, however, a covered 

transaction (see § 800.301 of this chapter). 

§ 801.304 Treatment of certain investment 

fund investments. 

(a) An indirect investment by a 

foreign person in a pilot program U.S. 

business through an investment fund 

that affords the foreign person (or a 

designee of the foreign person) 

membership as a limited partner or 

equivalent on an advisory board or a 

committee of the fund shall not be 

considered a pilot program covered 

transaction with respect to the foreign 

person if: 

(1) The fund is managed exclusively 

by a general partner, a managing 

member, or an equivalent; 

(2) The foreign person is not the 

general partner, managing member, or 

equivalent; 

(3) The advisory board or committee 

does not have the ability to approve, 

disapprove, or otherwise control: 

(i) Investment decisions of the 

investment fund; or 

(ii) Decisions made by the general 

partner, managing member, or 

equivalent related to entities in which 

the investment fund is invested; 

(4) The foreign person does not 

otherwise have the ability to control the 

investment fund, including the 

authority: 

(i) To approve, disapprove, or 

otherwise control investment decisions 

of the investment fund; 

(ii) To approve, disapprove, or 

otherwise control decisions made by the 

general partner, managing member, or 

equivalent related to entities in which 

the investment fund is invested; or 

(iii) To unilaterally dismiss, prevent 

the dismissal of, select, or determine the 

compensation of the general partner, 

managing member, or equivalent; 

(5) The foreign person does not have 

access to material nonpublic technical 

information as a result of its 

participation on the advisory board or 

committee; and 

(6) The investment otherwise meets 

the requirements of paragraph (4)(D) of 

subsection (a) of section 721 made 

effective by part 801. 

(b) For the purposes of paragraphs 

(a)(3) and (4), and except as provided in 


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paragraph (c) of this section, a waiver of 

a potential conflict of interest, a waiver 

of an allocation limitation, or a similar 

activity, applicable to a transaction 

pursuant to the terms of an agreement 

governing an investment fund shall not 

be considered to constitute control of 

investment decisions of the investment 

fund or decisions relating to entities in 

which the investment fund is invested. 

(c) In extraordinary circumstances, 

the Committee may consider the waiver 

of a potential conflict of interest, the 

waiver of an allocation limitation, or a 

similar activity, applicable to a 

transaction pursuant to the terms of an 

agreement governing an investment 

fund, to constitute control of investment 

decisions of the investment fund or 

decisions relating to entities in which 

the investment fund is invested. 

Example 1. Corporation A, a foreign 

person, makes an investment in an 

investment fund as a limited partner. The 

investment confers membership on an 

advisory board of the investment fund. The 

investment fund holds 100 percent of the 

ownership interests in a pilot program U.S. 

business. Corporation A will have the right 

to approve decisions made by the general 

partner with respect to the use and 

development of the critical technologies 

produced by the pilot program U.S. business. 

This transaction is a pilot program covered 

transaction. 

Example 2. Corporation A, a foreign 

person, makes an investment in an 

investment fund as a limited partner. The 

investment confers membership on an 

advisory board of the investment fund. The 

investment fund holds 100 percent of the 

ownership interests in a pilot program U.S. 

business. Corporation A is not the general 

partner that wholly manages the investment 

fund. Corporation A lacks any ability to 

control the investment fund or its decisions. 

As a member of the advisory board, 

Corporation A has the right to vote on the 

compensation of the general partner and the 

right to vote on the dismissal of the general 

partner for cause, but does not have the 

power to determine either of these matters 

unilaterally. Assuming no other relevant 

facts, this transaction is not a pilot program 

covered transaction with respect to 

Corporation A. 

§ 801.305 Exception for air carriers. 

No investment involving an air 

carrier, as defined in section 40102(a)(2) 

of title 49, United States Code, that 

holds a certificate issued under section 

41102 of that title shall be a pilot 

program covered transaction. 

§ 801.306 Timing rule for contingent equity 

interests. 

The provisions set forth in § 800.304 

of this chapter regarding convertible 

voting instruments shall apply to 

contingent equity interests. 

Subpart D—Mandatory Declarations 

Under the Pilot Program 

§ 801.401 Mandatory declarations under 

the pilot program. 

(a) Except as provided in paragraph 

(b) of this section, the parties to a pilot 

program covered transaction shall 

submit to the Committee a declaration 

with information regarding the 

transaction in accordance with 

§ 801.402. 

(b) Notwithstanding paragraph (a) of 

this section, parties to a pilot program 

covered transaction may elect to submit 

a written notice pursuant to subpart E 

of this part regarding the transaction 

instead of a declaration. Parties to a 

pilot program covered transaction that 

have filed with the Committee a written 

notice regarding a transaction pursuant 

to § 801.501 may not submit to the 

Committee a declaration regarding the 

same transaction or a substantially 

similar transaction without the approval 

of the Staff Chairperson. 

(c) Parties shall submit to the 

Committee the declaration required 

pursuant to paragraph (a) of this section, 

or a written notice pursuant to 

paragraph (b) of this section, no later 

than: 

(1) November 10, 2018, or promptly 

thereafter, if the completion date of the 

transaction is between November 10, 

2018 and December 25, 2018; or 

(2) 45 days before the completion date 

of the transaction, if the completion date 

of the transaction is after December 25, 

2018. 

(d) Section 800.204(e) of this chapter 

shall not apply with respect to any pilot 

program covered transaction for which 

the Committee completes all action 

under section 721 pursuant to 

§ 801.407(a)(4). 

§ 801.402 Procedures for declarations 

under the pilot program. 

(a) A party or parties shall submit a 

declaration of a pilot program covered 

transaction pursuant to § 801.401 by 

submitting electronically the 

information set out in § 801.403, 

including the certifications required 

thereunder, to the Staff Chairperson in 

accordance with the submission 

instructions on the Committee’s section 

of the Department of the Treasury 

website at https://home.treasury.gov/ 

policy-issues/international/thecommittee-on-foreign-investment-in-theunited-states-cfius. 

(b) No communications other than 

those described in paragraph (a) of this 

section shall constitute the submission 

of a declaration for purposes of section 

721. 

(c) Information and other 

documentary material submitted to the 

Committee pursuant to this section shall 

be considered to have been filed with 

the President or the President’s designee 

for purposes of section 721(c). 

(d) Persons filing a declaration shall, 

during the time that the matter is 

pending before the Committee, 

promptly advise the Staff Chairperson of 

any material changes in plans, facts, or 

circumstances addressed in the 

declaration, and any material change in 

information required to be provided to 

the Committee under § 801.406(a)(3). 

Such changes shall become part of the 

declaration filed by such persons under 

§ 801.401, and the certification required 

under § 801.405(c) shall apply to such 

changes. 

§ 801.403 Contents of declarations under 

the pilot program. 

(a) The party or parties submitting a 

declaration of a pilot program covered 

transaction pursuant to § 801.401 shall 

provide the information set out in this 

section, which must be accurate and 

complete with respect to all parties and 

to the transaction. (See also paragraphs 

(d) and (e) of this section.) 

(b) If fewer than all the parties to a 

transaction submit a declaration, the 

Committee may, at its discretion, 

request that the parties to the 

transaction file a written notice of the 

transaction under § 801.501, if the Staff 

Chairperson determines that the 

information provided by the submitting 

party or parties in the declaration is 

insufficient for the Committee to assess 

the transaction. 

(c) Subject to paragraph (e) of this 

section, a declaration submitted 

pursuant to § 801.401 shall describe or 

provide, as applicable: 

(1) The name of the foreign person(s) 

and pilot program U.S. business(es) that 

are parties to, or, in applicable cases, the 

subject of the transaction, as well as the 

name, telephone number, and email 

address of the primary point of contact 

for each party. 

(2) The following information 

regarding the transaction in question, 

including: 

(i) A brief description of the nature of 

the transaction and its structure (e.g., 

share purchase, merger, asset purchase); 

(ii) The percentage of voting interest 

acquired; 

(iii) The percentage of economic 

interest acquired; 

(iv) Whether the pilot program U.S. 

business has multiple classes of 

ownership; 

(v) The total transaction value in U.S. 

dollars; 

(vi) The expected closing date; and 

(vii) All sources of financing for the 

transaction. 


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(3) The following: 

(i) A statement as to whether a party 

to the transaction is stipulating that the 

transaction is a pilot program covered 

transaction and a description of the 

basis for the stipulation; and 

(ii) A statement as to whether a party 

to the transaction is stipulating that the 

transaction could result in control of a 

pilot program U.S. business by a foreign 

person or that the transaction is a 

foreign government-controlled 

transaction and, in each case, a 

description of the basis for the 

stipulation. 

(4) A statement as to whether the 

foreign person will acquire any of the 

following in the pilot program U.S. 

business: 

(i) Access to any material nonpublic 

technical information in the possession 

of the pilot program U.S. business, and 

if so, a brief explanation of the type of 

access and type of information; 

(ii) Membership, observer rights, or 

nomination rights as set forth in 

§ 801.209(b), and if so, a statement as to 

the composition of the board or other 

body both before and after the 

completion date of the transaction; 

(iii) Any involvement, other than 

through voting shares, in substantive 

decisionmaking of the pilot program 

U.S. business regarding the use, 

development, acquisition, or release of 

critical technologies and if so, a 

statement as to the involvement in such 

substantive decisionmaking; or 

(iv) Any rights that could result in the 

foreign person acquiring control of the 

pilot program U.S. business and, if so, 

a brief explanation of these rights. 

(5) The following information 

regarding the pilot program U.S. 

business: 

(i) Website address; 

(ii) Principal place of business; 

(iii) Place of incorporation or 

organization; and 

(iv) A list of the addresses or 

geographic coordinates (to at least the 

fourth decimal) of all locations of the 

pilot program U.S. business, including 

the pilot program U.S. business’s 

headquarters, facilities, and operating 

locations. 

(6) With respect to the pilot program 

U.S. business that is the subject of the 

transaction and any entity of which that 

pilot program U.S. business is a parent, 

a brief summary of their respective 

business activities, as, for example, set 

forth in annual reports, and the product 

or service categories of each, including 

the applicable six-digit NAICS codes. 

(7) A statement as to which critical 

technology or critical technologies the 

pilot program U.S. business and its 

subsidiaries produce, design, test, 

manufacture, fabricate, or develop, and 

the relevant six-digit NAICS code or 

codes, as applicable under §§ 801.212 

and 801.213, for each critical technology 

listed. This statement shall include a 

description (which may group similar 

items into general product categories) of 

the items and a list of any relevant 

Export Control Classification Numbers 

under the EAR and United States 

Munitions List categories under the 

ITAR, and, if applicable, identify 

whether any are specially designed and 

prepared nuclear equipment, parts and 

components, materials, software, and 

technology covered by 10 CFR part 810, 

nuclear facilities, equipment, and 

materials covered by 10 CFR part 110 or 

select agents and toxins covered by 7 

CFR part 331, 9 CFR part 121 or 42 CFR 

part 73. 

(8) A statement as to whether the pilot 

program U.S. business has any contracts 

(including any subcontracts, if known) 

that are currently in effect or were in 

effect within the past three years with 

any U.S. Government agency or 

component, or in the past 10 years if the 

contract included access to personally 

identifiable information of U.S. 

Government personnel. 

(9) A statement as to whether the pilot 

program U.S. business has any contracts 

(including any subcontracts, if known) 

that are currently in effect or were in 

effect within the past five years 

involving information, technology, or 

data that is classified under Executive 

Order 12958, as amended. 

(10) A statement as to whether the 

pilot program U.S. business has 

received any grant or other funding from 

the Department of Defense or the 

Department of Energy, or participated in 

or collaborated on any defense or energy 

program or product involving one or 

more critical technologies or pilot 

program industries within the past five 

years. 

(11) A statement as to whether the 

pilot program U.S. business participated 

in a Defense Production Act Title III 

Program (50 U.S.C. 4501 et seq.) within 

the past seven years. 

(12) A statement as to whether the 

pilot program U.S. business has 

received or placed priority rated 

contracts or orders under the Defense 

Priorities and Allocations System 

(DPAS) regulation (15 CFR part 700), 

and the level(s) of priority of such 

contracts or orders (DX or DO) within 

the past three years. 

(13) The name of the ultimate parent 

of the foreign person. 

(14) A complete organizational chart, 

including, without limitation, 

information that identifies the name, 

principal place of business and place of 

incorporation or other legal organization 

(for entities), and nationality (for 

individuals) for each of the following: 

(i) The immediate parent, the ultimate 

parent, and each intermediate parent, if 

any, of each foreign person that is a 

party to the transaction; 

(ii) Where the ultimate parent is a 

private company, the ultimate owner(s) 

of such parent; and 

(iii) Where the ultimate parent is a 

public company, any shareholder with 

an interest of greater than five percent 

in such parent. 

(15) Information regarding all foreign 

government ownership in the foreign 

person’s ownership structure, including 

nationality and percentage of 

ownership, as well as any rights that a 

foreign government holds, directly or 

indirectly, with respect to the foreign 

person. 

(16) With respect to the foreign person 

that is party to the transaction and any 

of its parents, as applicable, a brief 

summary of their respective business 

activities, as, for example, set forth in 

annual reports. 

(17) A statement as to whether any 

party to the transaction has been party 

to another transaction previously 

notified or submitted to the Committee, 

and the case number assigned by the 

Committee regarding such 

transaction(s). 

(18) A statement (including relevant 

jurisdiction and criminal case law 

number or legal citation) as to whether 

the pilot program U.S. business, the 

foreign person, or any parent or 

subsidiary of the foreign person has 

been convicted in the last ten years of 

a crime in any jurisdiction. 

(d) Each party submitting a 

declaration shall provide a certification 

of the information contained in the 

declaration consistent with § 800.202 of 

this chapter. A sample certification may 

be found on the Committee’s section of 

the Department of the Treasury website 

at https://home.treasury.gov/policyissues/international/the-committee-onforeign-investment-in-the-united-statescfius. 

(e) A party that offers a stipulation 

pursuant to paragraph (c)(3) of this 

section acknowledges that the 

Committee and the President are 

entitled to rely on such stipulation in 

determining whether the transaction is 

a pilot program covered transaction, a 

transaction that could result in control 

of a pilot program U.S. business by a 

foreign person, or a foreign governmentcontrolled 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 


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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 pilot 

program covered transaction. 

§ 801.404 Beginning of thirty-day period. 

(a) Upon receipt of a declaration 

submitted pursuant to § 801.401, the 

Staff Chairperson shall promptly inspect 

the declaration and shall promptly 

notify in writing all parties to a 

transaction that have submitted a 

declaration that: 

(1) The Staff Chairperson has 

accepted the declaration and circulated 

the declaration to the Committee, and 

the date on which the assessment 

described in paragraph (b) of this 

section begins; or 

(2) The Staff Chairperson has 

determined not to accept the declaration 

and circulate the declaration to the 

Committee because the declaration is 

incomplete, and provide an explanation 

of the material respects in which the 

declaration is incomplete. 

(b) A thirty-day period for assessment 

of a pilot program covered transaction 

that is the subject of a declaration shall 

commence on the date on which the 

declaration is received by the 

Committee from the Staff Chairperson. 

Such period shall end no later than the 

thirtieth day after it has commenced, or 

if the thirtieth day is not a business day, 

no later than the next business day after 

the thirtieth day. 

§ 801.405 General. 

(a) In assessing a pilot program 

covered transaction submitted pursuant 

to § 801.401, 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. The Committee’s assessment 

shall examine, as appropriate, whether: 

(1) The transaction constitutes a pilot 

program covered transaction and 

whether it could result in foreign 

government control over a pilot program 

U.S. business; 

(2) There is credible evidence to 

support a belief that any foreign person 

exercising control of the pilot program 

U.S. business or exercising rights related 

to a pilot program covered investment 

might take action that threatens to 

impair the national security of the 

United States; and 

(3) Provisions of law, other than 

section 721 and the International 

Emergency Economic Powers Act, 

provide adequate and appropriate 

authority to protect the national security 

of the United States with respect to the 

risk arising from the pilot program 

covered transaction. 

(b) During the thirty-day assessment 

period, the Staff Chairperson may invite 

the parties to a pilot program covered 

transaction to attend a meeting with the 

Committee staff to discuss and clarify 

issues pertaining to the transaction. 

(c) If the Committee notifies the 

parties to a transaction that have 

submitted a declaration pursuant to 

§ 801.401 that the Committee intends to 

complete all action under section 721 

with respect to that transaction, each 

party that has submitted additional 

information subsequent to the original 

declaration shall file a certification as 

described in § 800.202 of this chapter. A 

sample certification may be found on 

the Committee’s section of the 

Department of the Treasury website at 

https://home.treasury.gov/policy-issues/ 

international/the-committee-on-foreigninvestment-in-the-united-states-cfius. 

(d) If a party fails to provide the 

certification required under paragraph 

(c) of this section, the Committee may, 

at its discretion, take any of the actions 

under § 801.407(a). 

§ 801.406 Rejection, disposition, or 

withdrawal of declarations. 

(a) The Committee, acting through the 

Staff Chairperson, may: 

(1) Reject any declaration that does 

not comply with § 801.403 and so 

inform the parties promptly in writing; 

(2) Reject any declaration at any time, 

and so inform the parties promptly in 

writing, if, after the declaration has been 

submitted and before the Committee has 

taken one of the actions specified in 

§ 801.407(a): 

(i) There is a material change in the 

pilot program covered transaction as to 

which a declaration has been submitted; 

or 

(ii) Information comes to light that 

contradicts material information 

provided in the declaration by the party 

(or parties); or 

(3) Reject any declaration at any time 

after the declaration has been submitted, 

and so inform the parties promptly in 

writing, if the party (or parties) that 

submitted the declaration does not 

provide follow-up information 

requested by the Staff Chairperson 

within two business days of the request, 

or within a longer time frame if the 

party (or parties) so request in writing 

and the Staff Chairperson grants that 

request in writing. 

(b) The Staff Chairperson shall notify 

the parties that submitted a declaration 

when the Committee has found that the 

transaction that is the subject of a 

declaration is not a pilot program 

covered transaction. 

(c) Parties to a transaction that have 

submitted a declaration pursuant to 

§ 801.401(a) may request in writing, at 

any time prior to the Committee taking 

action under § 801.407(a), that such 

declaration be withdrawn. Such request 

shall be directed to the Staff 

Chairperson and shall state the reasons 

why the request is being made and state 

whether the transaction that is the 

subject of the declaration is being fully 

and permanently abandoned. An official 

of the Department of the Treasury will 

promptly advise the parties to the 

transaction in writing of the 

Committee’s decision. 

(d) The Committee may not request or 

recommend that a declaration be 

withdrawn and refiled, except to permit 

parties to a pilot program covered 

transaction to correct material errors or 

omissions in the declaration submitted 

with respect to that pilot program 

covered transaction. 

(e) A party (or parties) may not submit 

more than one declaration for the same 

or a substantially similar transaction 

without approval from the Staff 

Chairperson. 

§ 801.407 Committee actions. 

(a) Upon receiving a declaration 

submitted pursuant to § 801.401 with 

respect to a pilot program covered 

transaction, the Committee may, at the 

discretion of the Committee: 

(1) Request that the parties to the 

transaction file a written notice 

pursuant to subpart E; 

(2) Inform the parties to the 

transaction that the Committee is not 

able to complete action under section 

721 with respect to the transaction on 

the basis of the declaration and that the 

parties may file a written notice under 

part 800 to seek written notification 

from the Committee that the Committee 

has concluded all action under section 

721 with respect to the transaction; 

(3) Initiate a unilateral review of the 

transaction under § 801.504; or 

(4) Notify the parties in writing that 

the Committee has concluded all action 

under section 721 with respect to the 

transaction. 

(b) The Committee shall take action 

under paragraph (a) within the time 

period set forth in § 801.404(b). 

§ 801.408 Confidentiality. 

The provisions of § 800.702 of this 

chapter shall apply to information 

submitted to the Committee through a 

declaration. 

§ 801.409 Penalties. 

(a) Any person who fails to comply 

with the requirements of § 801.401 may 

be liable to the United States for a civil 


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Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Rules and Regulations 51333 

penalty not to exceed the value of the 

pilot program covered transaction. 

(b) The provisions of § 800.801(a), (d), 

(e), (f), (g), and (h) shall apply to a 

declaration submitted to the Committee 

pursuant to § 801.401. 

Subpart E—Notice of Pilot Program 

Covered Transaction 

§ 801.501 Notice of pilot program covered 

transactions. 

Parties to a pilot program covered 

transaction may notify the Committee of 

the transaction by filing with the 

Committee a written notice pursuant to 

§ 800.401(a) of this chapter and this 

subpart. 

§ 801.502 Applicability of part 800. 

(a) The provisions set forth in Subpart 

D—Notice; Subpart E—Committee 

Procedures: Review and Investigation; 

Subpart F—Finality of Action; Subpart 

G—Provision and Handling of 

Information; and Subpart H—Penalties 

of Part 800 regarding covered 

transactions shall apply to any pilot 

program covered transaction notified to 

the Committee. 

(b) Section 800.204(e) shall not apply 

with respect to any pilot program 

covered investment for which the 

Committee completes all action under 

section 721 pursuant to § 800.504 or 

§ 800.506(d) of this chapter. 

§ 801.503 Additional contents of written 

notice. 

(a) In addition to the information 

required pursuant to § 800.402(c), a 

written notice of a pilot program 

covered transaction filed pursuant to 

§ 800.401(a) of this chapter shall include 

the following information: 

(1) A statement as to whether a party 

to the transaction is stipulating that the 

transaction is a pilot program covered 

transaction and a description of the 

basis for the stipulation; 

(2) A statement as to whether the 

foreign person will acquire any of the 

following in the pilot program U.S. 

business: 

(i) Access to any material nonpublic 

technical information in the possession 

of the pilot program U.S. business, and 

if so, a brief explanation of the type of 

access and type of information; 

(ii) Membership, observer rights, or 

nomination rights as set forth in 

§ 801.209(b), and if so, a statement as to 

the composition of the board or other 

body both before and after the 

transaction; or 

(iii) Any involvement, other than 

through voting shares, in substantive 

decisionmaking of the United States 

business regarding the use, 

development, acquisition, or release of 

critical technologies and if so, a 

statement as to the involvement in such 

substantive decisionmaking; and 

(3) With respect to the pilot program 

U.S. business that is the subject of the 

transaction, a statement as to which 

critical technology or critical 

technologies the pilot program U.S. 

business and its subsidiaries produce, 

design, test, manufacture, fabricate, or 

develop, and the relevant six-digit 

NAICS code, as applicable under 

§§ 801.212 and 801.213, for each critical 

technology listed. This statement shall 

include a description (which may group 

similar items into general product 

categories) of the items and a list of any 

relevant Export Control Classification 

Numbers under the EAR and United 

States Munitions List categories under 

the ITAR, and, if applicable, identify 

whether any are specially designed and 

prepared nuclear equipment, parts and 

components, materials, software, and 

technology covered by 10 CFR part 810, 

nuclear facilities, equipment, and 

materials covered by 10 CFR part 110 or 

select agents and toxins covered by 7 

CFR part 331, 9 CFR part 121 or 42 CFR 

part 73. 

(b) If the party (or parties) stipulate 

pursuant to § 800.402(n) of this chapter 

that the pilot program covered 

transaction that is the subject of the 

written notice could result in a covered 

transaction under part 800, the party (or 

parties) are not required to include in 

the written notice the information 

required by this section. 

(c) A party that offers a stipulation 

acknowledges that the Committee and 

the President are entitled to rely on such 

stipulation in determining whether the 

transaction is a pilot program covered 

transaction, a transaction that could 

result in control of a pilot program U.S. 

business by a foreign person, 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 pilot program 

covered transaction. 

§ 801.504 Agency notice of pilot program 

covered transactions. 

Any member of the Committee, or his 

designee at or above the Under 

Secretary or equivalent level, may file 

an agency notice to the Committee 

through the Staff Chairperson regarding 

a pilot program covered transaction for 

which no declaration has been 

submitted pursuant to § 801.401 and no 

written notice has been filed under 

§ 801.501(a) if that member has reason 

to believe that the transaction is a pilot 

program covered transaction and may 

raise national security considerations. 

Notices filed under this paragraph are 

deemed accepted upon their receipt by 

the Staff Chairperson. 

Subpart F—Implementation of Certain 

Authority Provided In FIRRMA 

§ 801.601 Implementation of certain 

authority regarding covered transactions. 

Paragraphs (4)(A)(ii) (solely with 

respect to clauses (iii)(II) and (iv)(II) 

(solely with respect to an investment 

described in section 721(a)(4)(B)(iii)(II)) 

of subparagraph (B)), (4)(B)(iii)(II), 

(4)(B)(iv)(II) (solely with respect to an 

investment described in section 

721(a)(4)(B)(iii)(II)), (4)(D)(i)(I), 

4(D)(i)(II), (4)(D)(i)(III)(bb), 

(4)(D)(ii)(I)(bb), (4)(D)(ii)(II), (4)(D)(iii)(I), 

(4)(D)(iv), and (4)(D)(v) of subsection (a) 

of section 721 shall take effect on the 

pilot program effective date solely with 

respect to any pilot program covered 

transaction. Paragraph (4)(A)(ii) (solely 

with respect to clauses (iv)(I) and (v) of 

subparagraph (B)) of subsection (a) of 

section 721 shall take effect on the pilot 

program effective date. 

§ 801.602 Implementation of certain 

authority regarding mandatory declarations. 

Paragraphs (1)(C)(v)(I), (II), (III), 

(IV)(aa), (IV)(cc), (IV)(dd), (IV)(ee), 

(IV)(ff), and (IV)(gg) of subsection (b) of 

section 721 shall take effect on the pilot 

program effective date solely with 

respect to any pilot program covered 

transaction. 

Annex A to Part 801—Industries 

Aircraft Manufacturing 

NAICS Code: 336411 

Aircraft Engine and Engine Parts 

Manufacturing 

NAICS Code: 336412 

Alumina Refining and Primary Aluminum 

Production 

NAICS Code: 331313 

Ball and Roller Bearing Manufacturing 

NAICS Code: 332991 

Computer Storage Device Manufacturing 

NAICS Code: 334112 

Electronic Computer Manufacturing 

NAICS Code: 334111 

Guided Missile and Space Vehicle 

Manufacturing 

NAICS Code: 336414 

Guided Missile and Space Vehicle 

Propulsion Unit and Propulsion Unit Parts 

Manufacturing 

NAICS Code: 336415 

Military Armored Vehicle, Tank, and Tank 

Component Manufacturing 

NAICS Code: 336992 

Nuclear Electric Power Generation 

NAICS Code: 221113 


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Optical Instrument and Lens Manufacturing 

NAICS Code: 333314 

Other Basic Inorganic Chemical 

Manufacturing 

NAICS Code: 325180 

Other Guided Missile and Space Vehicle 

Parts and Auxiliary Equipment 

Manufacturing 

NAICS Code: 336419 

Petrochemical Manufacturing 

NAICS Code: 325110 

Powder Metallurgy Part Manufacturing 

NAICS Code: 332117 

Power, Distribution, and Specialty 

Transformer Manufacturing 

NAICS Code: 335311 

Primary Battery Manufacturing 

NAICS Code: 335912 

Radio and Television Broadcasting and 

Wireless Communications Equipment 

Manufacturing 

NAICS Code: 334220 

Research and Development in 

Nanotechnology 

NAICS Code: 541713 

Research and Development in Biotechnology 

(except Nanobiotechnology) 

NAICS Code: 541714 

Secondary Smelting and Alloying of 

Aluminum 

NAICS Code: 331314 

Search, Detection, Navigation, Guidance, 

Aeronautical, and Nautical System and 

Instrument Manufacturing 

NAICS Code: 334511 

Semiconductor and Related Device 

Manufacturing 

NAICS Code: 334413 

Semiconductor Machinery Manufacturing 

NAICS Code: 333242 

Storage Battery Manufacturing 

NAICS Code: 335911 

Telephone Apparatus Manufacturing 

NAICS Code: 334210 

Turbine and Turbine Generator Set Units 

Manufacturing 

NAICS Code: 333611 

Dated: October 4, 2018. 

Steven T. Mnuchin, 

Secretary. 

[FR Doc. 2018–22182 Filed 10–10–18; 8:45 am] 

BILLING CODE 4810–25–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[Docket Number USCG–2018–0855] 

RIN 1625–AA00 

Safety Zone; Ohio River, Cincinnati, 

OH 

AGENCY: Coast Guard, DHS. 

ACTION: Temporary final rule. 

SUMMARY: The Coast Guard is 

establishing a temporary safety zone for 

all navigable waters of the Ohio River, 

extending the entire width of the river, 

from mile marker (MM) 469 to MM 

470.5 in Cincinnati, OH. This safety 

zone is necessary to provide for the 

safety of persons, vessels, and the 

marine environment during the 

Yeatman’s Cove fireworks display. Entry 

into, transiting through, or anchoring 

within this safety zone is prohibited 

unless authorized by the Captain of the 

Port Sector Ohio Valley or a designated 

representative. 

DATES: This rule is effective from 8 p.m. 

through 9 p.m. on October 11, 2018. 

ADDRESSES: To view documents 

mentioned in this preamble as being 

available in the docket, go to http://

www.regulations.gov, type USCG–2018– 

0855 in the ‘‘SEARCH’’ box and click 

‘‘SEARCH.’’ Click on Open Docket 

Folder on the line associated with this 

rule. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this rule, call or 

email Petty Officer Matthew Roberts, 

Marine Safety Detachment Cincinnati, 

U.S. Coast Guard; telephone 513–921– 

9033, email SECOHV-WWM@USCG.Mil. 

SUPPLEMENTARY INORMATION: 

I. Table of Abbreviations 

CFR Code of Federal Regulations 

COTP Captain of the Port Sector Ohio 

Valley 

DHS Department of Homeland Security 

FR Federal Register 

MM Mile marker 

NPRM Notice of proposed rulemaking 

§ Section 

U.S.C. United States Code 

II. Background Information and 

Regulatory History 

The Coast Guard is issuing this 

temporary rule without prior notice and 

opportunity to comment pursuant to 

authority under section 4(a) of the 

Administrative Procedure Act (APA) (5 

U.S.C. 553(b)). This provision 

authorizes an agency to issue a rule 

without prior notice and opportunity to 

comment when the agency for good 

cause finds that those procedures are 

‘‘impracticable, unnecessary, or contrary 

to the public interest.’’ Under 5 U.S.C. 

553(b)(3)(B), the Coast Guard finds that 

good cause exists for not publishing a 

notice of proposed rulemaking (NPRM) 

with respect to this rule because it is 

impracticable. This safety zone must be 

established by October 11, 2018, and we 

lack sufficient time to provide a 

reasonable comment period and then 

consider those comments before issuing 

this rule. The NPRM process would 

delay the establishment of the safety 

zone until after the scheduled date of 

the fireworks and compromise public 

safety. 

Under 5 U.S.C. 553(d)(3), the Coast 

Guard finds that good cause exists for 

making this rule effective less than 30 

days after publication in the Federal 

Register. Delaying this rule would be 

contrary to public interest because 

immediate action is necessary to 

respond to the potential safety hazards 

associated with the fireworks display. 

III. Legal Authority and Need for Rule 

The Coast Guard is issuing this rule 

under authority in 33 U.S.C. 1231. The 

Captain of the Port Sector Ohio Valley 

(COTP) has determined that potential 

hazards associated with the fireworks 

display will be a safety concern for all 

navigable waters of the Ohio River 

extending from mile marker (MM) 469 

to MM 470.5. The purpose of this rule 

is to ensure safety of persons, vessels, 

and the marine environment before, 

during, and after the Yeatman’s Cove 

fireworks. 

IV. Discussion of the Rule 

This rule establishes a temporary 

safety zone from 8 p.m. through 9 p.m. 

on October 11, 2018. The temporary 

safety zone will cover all navigable 

waters of the Ohio River, extending the 

entire width of the river, from MM 469 

to MM 470.5. The duration of the 

temporary safety zone is intended to 

ensure the safety of vessels and these 

navigable waters before, during, and 

after the scheduled fireworks display. 

No vessel or person will be permitted 

to enter the temporary safety zone 

without obtaining permission from the 

COTP or a designated representative. A 

designated representative is a 

commissioned, warrant, or petty officer 

of the U.S. Coast Guard assigned to 

units under the operational control of 

USCG Sector Ohio Valley. Persons or 

vessels may request permission to enter 

the safety zone from the COTP or a 

designated representative. They may be 

contacted on VHF–FM radio channel 16 

or phone at 1–800–253–7465. If 

permission is granted, all persons and 

vessels must transit at their slowest safe 

speed and comply with all lawful 

directions issued by the COTP or a 

designated representative. The COTP or 

a designated representative will inform 

the public of the enforcement date and 

times for this safety zone, as well as any 

changes, through Broadcast Notices to 

Mariners (BNMs), Local Notices to 

Mariners (LNMs), and/or Marine Safety 

Information Bulletins (MSIBs) as 

appropriate. 

V. Regulatory Analyses 

We developed this rule after 

considering numerous statutes and 

Executive Orders related to rulemaking. 


khammond on DSK30JT082PROD with RULES