U.S. Department of the Treasury

Office of Public Affairs

Press Release: October 10, 2018 

Contact: Treasury Public Affairs, (202) 622-2960

Q&A: Interim Regulations for FIRRMA Pilot Program

General

1. What is FIRRMA?

On August 13, 2018, the President signed into law the Foreign Investment Risk Review 

Modernization Act of 2018, or FIRRMA. FIRRMA strengthens and modernizes the Committee 

on Foreign Investment in the United States, or CFIUS, a multi-agency government body chaired 

by the Secretary of the Treasury that reviews foreign investment for national security 

considerations.

2. What is a pilot program?

Certain provisions of FIRRMA took effect immediately upon enactment on August 13, 2018, 

while others will take effect at a later date. During this interim period, FIRRMA authorizes 

CFIUS to conduct one or more pilot programs to implement any provisions of the legislation that 

were not immediately effective upon enactment. 

3. Why is this pilot program necessary?

The passage of FIRRMA was based upon concerns that 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. The pilot program is necessary to protect the nation’s critical 

technologies from foreign investments that raise national security concerns during the time 

CFIUS works to fully implement FIRRMA. The pilot also will provide CFIUS valuable insight 

that will help shape the final regulations implementing FIRRMA.

4. Is the pilot program meant to address national security concerns or concerns about 

the future economic prosperity of the United States?

CFIUS remains focused exclusively on national security. CFIUS examines the effects of a 

transaction and assesses the impact of those effects on the national security of the United States. 
The pilot program will help CFIUS protect our national security from both existing and emerging 

risks.

5. To whom does the pilot program apply? Is it country-specific?

Like prior CFIUS legislation and FIRRMA itself, the pilot program does not single out any 

specific country. Under the pilot program, CFIUS’s authorities may be applied to address the 

national security risks posed by foreign investment in the United States, regardless of from 

where the investment originates.

6. Is the United States still open to foreign investment?

The United States welcomes foreign investment and continues to be one of the most open 

countries in the world to foreign investors. The United States is also the best place to invest 

worldwide, having adopted strong economic growth policies—including a new, low corporate 

tax rate and in the elimination of many ineffective regulations—and maintained a strong 

innovation ecosystem and highly developed market. We expect that the CFIUS process, as 

modernized and strengthened by FIRRMA, will enhance confidence in the nation’s longstanding 

open investment policy by continuing to restrict only those foreign investments that pose 

national security concerns.

7. Can foreign investors still make investments in the United States in the technology 

industry?

The United States welcomes foreign investment in the technology industry, and maintains a 

strong commitment to the rule of law and the protection of intellectual property. The United 

States provides unique opportunities for advanced research and innovation, and offers a skilled, 

energized, and optimistic workforce. Neither FIRRMA nor the pilot program changes this

investment environment. CFIUS will continue to assess, on a case-by-case basis through its 

current process and the pilot program, whether the facts and circumstances of a particular 

transaction (regardless of industry) pose a risk to U.S. national security.

8. Is CFIUS working with like-minded U.S. allies and partners to strengthen processes 

to review foreign investments for national security risks?

Yes. Treasury, in consultation with other members of CFIUS, has been, and plans to continue,

working with like-minded U.S. allies and partners to strengthen investment review processes.

9. What are the amendments to CFIUS’s existing regulations that are being published 

at the same time?

A number of the immediately effective provisions of FIRRMA required revisions to CFIUS’s 

existing regulations. The amendments to CFIUS’s existing regulations that will also be 

published on October 11, 2018, make such revisions and make several other updates, consistent 

with FIRRMA. The amendments are largely technical in nature.

Timing

10. When does the pilot program go into effect?

The interim rule implementing the pilot program will be published in the Federal Register on 

October 11, 2018, and the pilot program will go into effect 30 days later on November 10, 2018. 
11. How long will the pilot program last?

The pilot program will end no later than the date on which the regulations fully implementing 

FIRRMA become effective, and in no event later than March 5, 2020, the date that is 570 days 

after the enactment of FIRRMA. 

12. Does the pilot program apply to transactions that have already been consummated?

The pilot program regulations will not apply to transactions consummated prior to November 11, 

2018. The pilot program regulations also will not apply to certain other transactions for which 

the parties have signed, before October 11, 2018, a binding agreement or other binding document 

establishing the material terms.

Pilot Program Coverage

13. Does the pilot program change CFIUS’s current jurisdiction?

The pilot program will expand CFIUS’s jurisdiction, consistent with FIRRMA, such that CFIUS 

will now be able to review certain non-controlling investments by foreign persons in some U.S. 

businesses. CFIUS will continue to have the same authority to review transactions 

that could result in control of a U.S. business by a foreign person. 

14. What kind of investment is covered?

CFIUS retains the same authority to review transactions by a foreign person that could result in 

control of a U.S. business. The pilot program will expand CFIUS’s jurisdiction, consistent with 

FIRRMA, to include certain non-controlling investments by foreign persons in some U.S. 

businesses. The types of non-controlling investments by foreign persons that are covered by the 

pilot program are those that would give the foreign investor:

 access to any material nonpublic technical information in the possession of the pilot 

program U.S. business; 

 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 

 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.

15. What U.S. businesses will be impacted by the pilot program?

The pilot program covers 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. Pilot program industries are 

identified in the Annex to the regulations.

 

16. What are critical technologies?

Under FIRRMA, “critical technology” is defined with reference to existing export control 

regimes, among others. Consistent with FIRRMA, the definition of “critical technology” in 

CFIUS’s regulations has been updated to add a new category for the emerging and foundational 
technologies controlled pursuant to section 1758 of the Export Control Reform Act of 2018

(which was enacted at the same time as FIRRMA as part of the John S. McCain National 

Defense Authorization Act for Fiscal Year 2019). As technology becomes controlled under 

these export control regimes, it is captured under the definition of “critical technology” in the 

CFIUS regulations.

17. How did CFIUS select the 27 covered industries?

The U.S. Government carefully developed the list of pilot program industries for which certain 

strategically motivated foreign investment could pose a threat to U.S. technological superiority 

and national security.

Mandatory Declarations

18. CFIUS has always been, by and large, a voluntary process. Why are mandatory 

filings necessary?

The Committee has determined that it is appropriate to implement a mandatory declaration

requirement in this pilot program in order to understand and examine, in a comprehensive 

manner, the nature of foreign direct investment as it relates to critical technologies and the select 

pilot program industries. This is driven by the ongoing risks to U.S. national security arising 

from the rapid pace of technological change in certain U.S. industries and the nature of some 

foreign investments aimed at affecting certain decisions regarding, or to obtain certain 

information relating to, critical technologies. 

19. To whom does the mandatory filing requirement apply? Is it country-specific?

The pilot program covers all foreign persons and is not country specific. The mandatory filing 

requirement applies to all foreign investments that fall within the scope of the pilot program. 

The pilot program will inform CFIUS’s approach with respect to the application of certain 

provisions of FIRRMA to certain categories of foreign persons.

20. What is a declaration? What is the difference between a notice and a declaration?

A declaration is an abbreviated way of informing CFIUS of a transaction that generally should 

not exceed five pages in length. Traditional CFIUS notices are frequently much longer and 

require parties to provide specific additional information that will not be required in a 

declaration. Also, CFIUS has 30 days to consider a declaration, as opposed to the 45 days 

allotted for CFIUS to conduct a review of a notice (prior to an investigation, if necessary). 

Finally, FIRRMA gives CFIUS the following options to resolve declarations: (1) request that the 

parties file a notice; (2) inform the parties that CFIUS cannot complete action on the basis of the 

declaration and that they may file a notice regarding 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. 

As part of the pilot program, CFIUS is developing a Web template for parties to use for filing a 

declaration. The template will be available on the CFIUS Web page in the coming days and will

guide parties in providing information and facilitate filings.
Public Comment Period

21. When does the public comment period begin and end?

The Committee is providing an immediate opportunity for public comment on the interim rule. 

The comment period opens on October 11, 2018, and will conclude 30 days later on November 

10, 2018. 

22. Who may submit comments during the public comment period?

Any interested member of the public may comment. Comments will be posted publicly.

23. How can comments be submitted?

Interested persons may submit comments electronically through the Federal government 

eRulemaking Portal at https://www.regulations.gov or by mailing to U.S. Department of the 

Treasury, Attention: Thomas Feddo, Deputy Assistant Secretary for Investment Security, 1500 

Pennsylvania Avenue, NW, Washington, DC 20220. 

Next Steps

24. How long is it going to take to fully implement FIRRMA?

Several provisions of FIRRMA took effect immediately upon enactment on August 13, 2018, 

while others may take up to 18 months to take effect. In the meantime, CFIUS has the authority 

to implement pilot programs, such as the pilot program announced today, and may also issue 

interim regulations and guidance.

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