51316 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Rules and Regulations 

FOR FURTHER INFORMATION CONTACT: 

Colby Abbott, Airspace Policy Group, 

Office of Airspace Services, Federal 

Aviation Administration, 800 

Independence Avenue SW, Washington, 

DC 20591; telephone: (202) 267–8783. 

SUPPLEMENTARY INFORMATION: 

Authority for This Rulemaking 

The FAA’s authority to issue rules 

regarding aviation safety is found in 

Title 49 of the United States Code. 

Subtitle I, Section 106 describes the 

authority of the FAA Administrator. 

Subtitle VII, Aviation Programs, 

describes in more detail the scope of the 

agency’s authority. This rulemaking is 

promulgated under the authority 

described in Subtitle VII, Part A, 

Subpart I, Section 40103. Under that 

section, the FAA is charged with 

prescribing regulations to assign the use 

of the airspace necessary to ensure the 

safety of aircraft and the efficient use of 

airspace. This regulation is within the 

scope of that authority as it makes the 

necessary updates for airspace areas 

within the National Airspace System. 

History 

The FAA published a final rule in the 

Federal Register for Docket No. FAA– 

2018–0632 (83 FR 40662, August 16, 

2018), amending the Chicago Class B 

and Chicago Class C airspace in 

Chicago, IL. The amendment was 

published under Order 7400.11B (dated 

August 3, 2017, and effective September 

15, 2017), but became effective under 

Order 7400.11C (dated August 13, 2018, 

and effective September 15, 2018). This 

action incorporates this rule into the 

current FAA Order 7400.11C. 

Class B airspace designations are 

published in paragraph 3000 and Class 

C airspace designations are published in 

paragraph 4000 of FAA Order 7400.11C, 

dated August 13, 2018, and effective 

September 15, 2018, which is 

incorporated by reference in 14 CFR 

71.1. The Class B and Class C airspace 

designations listed in this document 

will be subsequently published in the 

Order. 

Availability and Summary of 

Documents for Incorporation by 

Reference 

This document amends FAA Order 

7400.11C, Airspace Designations and 

Reporting Points, dated August 13, 

2018, and effective September 15, 2018. 

FAA Order 7400.11C is publicly 

available as listed in the ADDRESSES

section of this document. FAA Order 

7400.11C lists Class A, B, C, D, and E 

airspace areas, air traffic service routes, 

and reporting points. 

The Rule 

This action amends Title 14 Code of 

Federal Regulations (14 CFR) part 71 by 

incorporating this amendment into FAA 

Order 7400.11C for a final rule 

published in the Federal Register of 

August 16, 2018, for the above titled, 

Amendment of Chicago Class B and 

Chicago Class C Airspace; Chicago, IL. 

Accordingly, as this is an 

administrative correction to update the 

final rule amendment into FAA Order 

7400.11C, notice and public procedure 

under 5 U.S.C. 553(b) are unnecessary. 

Also, to bring this rule and legal 

description current, I find that good 

cause exists, under 5 U.S.C. 553(d), for 

making this amendment effective in less 

than 30 days. 

Regulatory Notices and Analyses 

The FAA has determined that this 

regulation only involves an established 

body of technical regulations for which 

frequent and routine amendments are 

necessary to keep them operationally 

current. Therefore, this regulation: (1) Is 

not a ‘‘significant regulatory action’’ 

under Executive Order 12866; (2) is not 

a ‘‘significant rule’’ under Department of 

Transportation (DOT) Regulatory 

Policies and Procedures (44 FR 11034; 

February 26, 1979); and (3) does not 

warrant preparation of a regulatory 

evaluation as the anticipated impact is 

so minimal. Since this is a routine 

matter that only affects air traffic 

procedures and air navigation, it is 

certified that this rule, when 

promulgated, does not have a significant 

economic impact on a substantial 

number of small entities under the 

criteria of the Regulatory Flexibility Act. 

List of Subjects in 14 CFR Part 71 

Airspace, Incorporation by reference, 

Navigation (air). 

Adoption of the Amendment 

In consideration of the foregoing, the 

Federal Aviation Administration 

amends 14 CFR part 71 as follows: 

PART 71—DESIGNATION OF CLASS A, 

B, C, D, AND E AIRSPACE AREAS; AIR 

TRAFFIC SERVICE ROUTES; AND 

REPORTING POINTS 

■ 1. The authority citation for 14 CFR 

part 71 continues to read as follows: 

Authority: 49 U.S.C. 106(f),106(g), 40103, 

40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 

1959–1963 Comp., p. 389. 

§ 71.1 [Amended] 

■ 2. Section 71.1 is revised to read as 

follows: 

For Docket No. FAA–2018–0632; 

Airspace Docket No. 17–AWA–4 (83 FR 

40662, August 16, 2018). On page 

40662, column 3, line 59, and page 

40663, column 1, line 10, under 

ADDRESSES; and on page 40663, column 

2, line 15, and line 17, under 

Availability and Summary of 

Documents for Incorporation by 

Reference remove ‘‘. . . FAA Order 

7400.11B . . .’’ and add in its place 

‘‘. . . FAA Order 7400.11C . . .’’. 

On page 40663, column 1, line 66, 

under History remove ‘‘. . . FAA Order 

7400.11B dated August 3, 2017, and 

effective September 15, 2017, . . .’’ and 

add in its place ‘‘. . . FAA Order 

7400.11C dated August 13, 2018, and 

effective September 15, 2018 . . .’’. 

On page 40663, column 2, line 12, 

under Availability and Summary of 

Documents for Incorporation by 

Reference; and on page 40664, column 

1, line 22, under Amendatory 

Instruction 2 remove ‘‘. . . FAA Order 

7400.11B, Airspace Designations and 

Reporting Points, dated August 3, 2017, 

and effective September 15, 2017, . . .’’ 

and add in its place ‘‘. . . FAA Order 

7400.11C, Airspace Designations and 

Reporting Points, dated August 13, 

2018, and effective September 15, 2018, 

. . .’’. 

Issued in Washington, DC, on October 5, 

2018. 

Rodger A. Dean Jr., 

Manager, Airspace Policy Group. 

[FR Doc. 2018–22193 Filed 10–10–18; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF THE TREASURY 

Office of Investment Security 

31 CFR Part 800 

RIN 1505–AC60 

Provisions Pertaining to Certain 

Investments in the United States by 

Foreign Persons 

AGENCY: Office of Investment Security, 

Department of the Treasury. 

ACTION: Interim rule. 

SUMMARY: This interim rule sets forth 

amendments to the regulations in part 

800 of 31 CFR that implement, and 

make updates consistent with, certain 

provisions of the Foreign Investment 

Risk Review Modernization Act of 2018 

(FIRRMA). Among other things, this 

interim rule implements certain 

provisions of FIRRMA that became 

immediately effective upon its 

enactment and provides clarity as to the 

current process and procedures with 

respect to the reviews and investigations 

undertaken by the Committee on 


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Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Rules and Regulations 51317 

1Temporary regulations with no specific 

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

Federal Register classification. 

Foreign Investment in the United States 

pursuant to part 800, in light of 

FIRRMA. 

DATES: Effective date: These provisions 

are effective October 11, 2018. 

Applicability date: See § 800.103. 

Comment date: Written comments 

must be received by November 10, 2018. 

ADDRESSES: Written comments on the 

interim rule may be submitted through 

one of two methods: 

• Electronic Submission of 

Comments: Interested persons may 

submit comments electronically through 

the Federal government eRulemaking 

Portal at https://www.regulations.gov. 

Electronic submission of comments 

allows the commenter maximum time to 

prepare and submit a comment, ensures 

timely receipt, and enables the 

Department to make them available to 

the public. Comments submitted 

electronically through the https://

www.regulations.gov website can be 

viewed by other commenters and 

interested members of the public. 

• Mail: Send to U.S. Department of 

the Treasury, Attention: Thomas Feddo, 

Deputy Assistant Secretary for 

Investment Security, 1500 Pennsylvania 

Avenue, NW, Washington, DC 20220. 

In general, Treasury will post all 

comments to www.regulations.gov 

without change, including any business 

or personal information provided, such 

as names, addresses, email addresses, or 

telephone numbers. All comments 

received, including attachments and 

other supporting material, will be part 

of the public record and subject to 

public disclosure. You should only 

submit information that you wish to 

make publicly available. 

FOR FURTHER INFORMATION CONTACT: For 

questions about this interim rule, 

contact: Thomas Feddo, Deputy 

Assistant Secretary for Investment 

Security; Laura Black, Director of 

Investment Security Policy and 

International Relations; Meena Sharma, 

Senior Policy Advisor; or Juliana 

Gabrovsky, Policy Advisor, at U.S. 

Department of the Treasury, 1500 

Pennsylvania Avenue, NW, Washington, 

DC 20220, telephone: (202) 622–3425, 

email: CFIUS.FIRRMA@treasury.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On August 13, 2018, President Trump 

signed into law the Foreign Investment 

Risk Review Modernization Act of 2018 

(FIRRMA), Subtitle A of Title XVII of 

Pub. L. 115–232 (Aug. 13, 2018), which 

amends section 721 of the Defense 

Production Act of 1950 (DPA). Pursuant 

to section 1727 of FIRRMA, a number of 

provisions of FIRRMA took effect 

immediately upon enactment of the 

statute, while the effectiveness of other 

provisions is delayed. A number of the 

immediately effective provisions of 

FIRRMA required revisions to certain 

provisions of part 800. This interim rule 

amends part 800 to make such revisions 

and makes several other updates 

consistent with FIRRMA. 

This interim rule is intended to 

provide clarity regarding the processes 

and procedures of the Committee on 

Foreign Investment in the United States 

(CFIUS, or the Committee) pending the 

full implementation of FIRRMA. 

II. Waiver of Public Comment 

Requirement for Temporary Provisions 

The interim rule set forth in this 

document implements certain 

immediately effective provisions of, and 

makes updates consistent with, 

FIRRMA. Section 709(a) of the DPA (50 

U.S.C. 4559(a)) provides that regulations 

issued under the DPA are not subject to 

the rulemaking requirements of the 

Administrative Procedure Act (APA). 

Moreover, to the extent that the 

rulemaking requirements of the APA 

were determined to apply to this interim 

rule, the provisions of the APA 

requiring notice of proposed 

rulemaking, opportunity for public 

participation, and delay in effective date 

(5 U.S.C. 553), as well as the provisions 

of Executive Order 13771, are 

inapplicable because this interim rule 

involves a foreign affairs function of the 

United States. By its terms, this interim 

rule regulates the conduct of foreign 

persons seeking to acquire certain 

interests in particular U.S. businesses, 

precisely because the acquisition of 

such interests could harm the strategic 

national security interests of the United 

States vis-a`-vis other nations. 

Notwithstanding that the rulemaking 

requirements of the APA do not apply 

to this interim rule, section 709(b)(1) of 

the DPA provides that, except as 

otherwise provided in section 709, any 

regulation issued under the DPA must 

be published in the Federal Register 

and opportunity for public comment 

must be provided for not less than 30 

days, consistent with the requirements 

of 5 U.S.C. 553(b). 

Section 709(b)(2) of the DPA (50 

U.S.C. 4559(b)(2)), however, provides 

that the requirements of section 

709(b)(1) may be waived if: (1) The 

officer authorized to issue the regulation 

finds that urgent and compelling 

circumstances make compliance with 

such requirements impracticable; (2) the 

regulation is issued on a temporary 

basis 1; and (3) the publication of such 

temporary rule is accompanied by the 

finding made under (1) (and a brief 

statement of the reasons for such 

finding) and an opportunity for public 

comment is provided for not less than 

30 days before any regulation becomes 

final. 

The regulatory amendments set forth 

in this document meet the three 

requirements of section 709(b)(2) of the 

DPA for the reasons below, and 

therefore qualify for waiver of the public 

comment requirement of section 

709(b)(1) of the DPA. 

First, as required by section 

709(b)(2)(A) of the DPA, and for the 

reasons described in part III, below, 

upon the approval of the Secretary of 

the Treasury, the Assistant Secretary of 

the Treasury for International Markets 

finds, and the Committee agrees, that 

urgent and compelling circumstances 

make completion of the process for 

public participation in rulemaking set 

forth in section 709 of the DPA 

impracticable prior to the effectiveness 

of this interim rule. 

Second, this interim rule is limited in 

duration as the amendments addressed 

in this rule will be further addressed in 

the final rule implementing FIRRMA, 

which is forthcoming and will 

supersede this interim rule. Thus, these 

amendments are being issued on a 

temporary basis pending the full 

implementation of FIRRMA. 

Third, consistent with the 

requirement of section 709(b)(2)(C) of 

the DPA, if the Committee intends to 

make the provisions of this interim rule 

final, CFIUS will complete the process 

for public participation in rulemaking 

set forth in section 709 of the DPA in 

conjunction with the issuance of a final 

rule. 

III. Urgent and Compelling 

Circumstances for Interim Rule 

Upon enactment of FIRRMA, certain 

of the Committee’s regulations in part 

800 were rendered inconsistent with 

section 721. These inconsistencies 

could lead to ambiguity regarding the 

procedural aspects of the national 

security reviews and investigations 

undertaken by the Committee. Given 

that parties involved in cross-border 

transactions regularly include CFIUS 

among the regulatory regimes that are 

assessed in transaction negotiations and 

planning, urgent and compelling 

circumstances exist that require 

immediate and clear guidance. One of 

the factors that makes the United States 


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51318 Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Rules and Regulations 

an attractive destination for foreign 

investment is the transparency and 

clarity of the rules and procedures that 

govern the national security reviews and 

investigations carried out by CFIUS. 

This interim rule seeks to ensure, in a 

timely manner, that the rules and 

procedures that the Committee applies 

to its national security reviews and 

investigations remain clear to parties 

actively involved in transaction 

negotiations and planning. 

As a result, the Committee is 

providing an immediate opportunity for 

public comment on this interim rule 

and will consider and address such 

comments in the process of 

promulgating any final rule, consistent 

with section 709(b)(3) of the DPA. This 

approach appropriately balances the 

urgency of the interim rule with the 

need for public participation in the 

formulation of any final rule. 

IV. Discussion of Interim Rule 

Overview of Key Amendments to the 

Regulations at Part 800 

This interim rule makes amendments 

to the regulations at part 800 that are 

largely technical in nature. It 

implements certain immediately 

effective provisions of, and makes 

updates consistent with, FIRRMA. The 

discussion below summarizes the key 

changes made by this interim rule. 

Section 800.103. This section is 

amended to provide clarity with respect 

to the applicability of the amendments 

to part 800 included in this interim rule. 

These amendments apply with respect 

to any covered transaction the review of 

which is initiated under section 721 on 

or after October 11, 2018. Certain of the 

provisions in FIRRMA that are 

addressed in this interim rule, however, 

took effect upon enactment of the 

statute. Most notably for transaction 

parties, FIRRMA’s extension of the 

CFIUS review period from 30 days to 45 

days went into effect immediately, and 

this interim rule updates part 800 to 

reflect the current practice of CFIUS. As 

indicated on the CFIUS website of the 

Department of the Treasury on August 

13, 2018, upon the enactment of 

FIRRMA, CFIUS began applying the 45- 

day review period with respect to any 

covered transaction the review of which 

is initiated under section 721 on or after 

the date of FIRRMA’s enactment. 

Section 800.104. FIRRMA expands 

the definition of ‘‘covered transaction’’ 

to include transactions, transfers, 

agreements, or arrangements, the 

structure of which is designed or 

intended to evade or circumvent the 

application of section 721. Therefore, 

section 800.104, which addressed 

transactions or devices for avoidance, 

has been removed. 

Section 800.202. The amendment to 

this section implements section 1720 of 

FIRRMA and expressly provides for the 

application of section 1001 of title 18, 

United States Code, to all information 

provided to the Committee under 

section 721 by any party to a covered 

transaction. 

Section 800.207. The revision to the 

definition of ‘‘covered transaction’’ is 

consistent with the language in 

FIRRMA. 

Section 800.209. The revision to the 

definition of ‘‘critical technologies’’ is 

consistent with the language in 

FIRRMA, including, and in particular, 

adding a sixth category as subpart (f) to 

capture emerging and foundational 

technologies controlled pursuant to 

section 1758 of the Export Control 

Reform Act of 2018. 

Section 800.224. The revision to the 

definition of ‘‘transaction’’ is consistent 

with the language in FIRRMA defining 

a ‘‘covered transaction’’ to include 

certain changes in rights that a foreign 

person has with respect to a U.S. 

business in which the foreign person 

has an investment, as well as 

transactions the structure of which is 

designed or intended to evade or 

circumvent the application of section 

721. Corresponding changes are made to 

the definition of ‘‘party or parties to a 

transaction’’ in section 800.220. 

Sections 800.301 and 800.302. The 

revisions to these sections add examples 

that are intended to illustrate the 

application of the expanded scope of 

‘‘covered transactions’’ to the particular 

hypothetical situations. The examples 

are presented for the purpose of aiding 

the understanding of readers. They 

neither limit the definition set forth in 

subpart B of part 800 nor exhaust the 

scenarios to which such definition 

could apply. 

Section 800.401. The revisions to this 

section implement a shift to electronic 

submissions of voluntary notices, rather 

than requiring a hardcopy submission, 

which is consistent with the focus of 

FIRRMA on ensuring that the 

procedures of the Committee enable the 

Committee’s efficient operation. 

Section 800.402. The revisions to 

section 800.402 modify certain of the 

requirements regarding the content of 

voluntary notices based on FIRRMA 

including, and in particular, adding a 

provision allowing parties to stipulate 

that the transaction that is the subject of 

the voluntary notice is a covered 

transaction and, as relevant, a foreign 

government-controlled transaction. The 

Committee notes that stipulating that a 

transaction is covered or foreign 

government-controlled allows the 

Committee to expend fewer resources in 

determining whether the transaction 

meets these criteria, potentially 

speeding the resolution of a review. 

Although the parties, by stipulating, are 

averring that they view the transaction 

to be covered and/or foreign 

government-controlled, neither the 

Committee nor the President is bound 

by the parties’ stipulations. 

Section 800.502. The revision to the 

timing of the review period, extending 

the period from 30 days to 45 days, is 

consistent with FIRRMA. This change is 

reflected in certain other sections of part 

800 that are updated by this interim 

rule. 

Section 800.506. The revisions to this 

section are consistent with FIRRMA and 

define the ‘‘extraordinary 

circumstances’’ pursuant to which an 

investigation period can be extended by 

one 15-day period. 

Section 800.702. The revisions to this 

section are consistent with FIRRMA, 

including, and in particular, 

incorporating additional exceptions 

with respect to information sharing. 

Section 800.801. The revisions to this 

section are consistent with FIRRMA 

including, and in particular, removing 

the language ‘‘intentionally or through 

gross negligence’’ in the provisions 

allowing for the imposition of civil 

penalties. By their terms, the revisions 

do not apply the new standard to 

material misstatements, omissions, or 

certifications made preceding the 

implementation of this rule, or to 

violations occurring after the 

implementation of this rule, in 

connection with mitigation agreements, 

material conditions, or orders entered 

into or imposed prior to the 

implementation of this rule. 

Section 800.802. The addition of this 

section is consistent with FIRRMA 

including authorizing the Committee to, 

in addition to other remedies, negotiate 

a remediation plan for lack of 

compliance with a mitigation agreement 

or condition entered into or imposed 

under section 721(l), require filings for 

future covered transactions for five 

years, or seek injunctive relief. 

Executive Order 12866 

These regulations are not subject to 

the requirements of Executive Order 

12866 because they relate to a foreign 

affairs function of the United States. 

Paperwork Reduction Act 

The collection of information 

contained in this rule has been 

submitted to the Office of Management 

and Budget in accordance with the 

Paperwork Reduction Act of 1995 (44 


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Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Rules and Regulations 51319 

U.S.C. 3507(d)) and assigned control 

number 1505–0121. Under the 

Paperwork Reduction Act, an agency 

may not conduct or sponsor, and a 

person is not required to respond to, a 

collection of information unless it 

displays a valid control number 

assigned by the Office of Management 

and Budget. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

(5 U.S.C. 601 et seq.) generally requires 

an agency to prepare a regulatory 

flexibility analysis unless the agency 

certifies that the rule will not have a 

significant economic impact on a 

substantial number of small entities. 

The RFA applies when an agency is 

required to publish a general notice of 

proposed rulemaking under section 

553(b) of the APA, or any other law. As 

set forth below, because regulations 

issued pursuant to the Defense 

Production Act of 1950 (50 U.S.C. 4559) 

are not subject to the APA, or other law 

requiring the publication of a general 

notice of proposed rulemaking, the RFA 

does not apply. 

This interim rule implements section 

721 of the DPA. Section 709(a) of the 

DPA provides that the regulations 

issued under it are not subject to the 

rulemaking requirements of the APA. 

Section 709(b)(1) instead provides that 

any regulation issued under the DPA be 

published in the Federal Register and 

opportunity for public comment be 

provided for not less than 30 days. 

(Notwithstanding the notice 

requirements of section 709(b)(1), 

section 709(b)(2) of the DPA waives the 

DPA’s public comment provision for 

temporary provisions. As discussed in 

part II above, this interim rule 

implements, and makes updates 

consistent with, certain immediately 

effective provisions of FIRRMA and is 

issued pursuant to the section 709(b)(2) 

waiver provision.) Section 709(b)(3) of 

the DPA also provides that all 

comments received during the public 

comment period be considered and the 

publication of the final regulation 

contain written responses to such 

comments. Consistent with the plain 

text of the DPA, legislative history 

confirms that Congress intended that 

regulations under the DPA be exempt 

from the notice and comment provisions 

of the APA and instead provided that 

the agency include a statement that 

interested parties were consulted in the 

formulation of the final regulation. See 

H.R. Conf. Rep. No. 102–1028, at 42 

(1992) and H.R. Rep. No. 102–208 pt. 1, 

at 28 (1991). The limited public 

participation procedures described in 

the DPA do not require a general notice 

of proposed rulemaking as set forth in 

the RFA. Further, the mechanisms for 

publication and public participation are 

sufficiently different to distinguish the 

DPA procedures from a rule that 

requires a general notice of proposed 

rulemaking. In providing the President 

with expanded authority to suspend or 

prohibit the acquisition, merger, or 

takeover of, or certain other investments 

in, a domestic firm by a foreign firm if 

such action would threaten to impair 

the national security, Congress could 

not have contemplated that regulations 

implementing such authority would be 

subject to RFA analysis. For these 

reasons, the RFA does not apply to these 

regulations. 

List of Subjects in 31 CFR Part 800 

Foreign investments in the United 

States, Investigations, National defense, 

Reporting and recordkeeping 

requirements. 

Accordingly, for the reasons stated in 

the preamble, Code of Federal 

Regulations, Title 31, Subtitle B, 

Chapter VIII, Part 800 is amended as 

follows: 

PART 800—REGULATIONS 

PERTAINING TO CERTAIN 

INVESTMENTS IN THE UNITED 

STATES BY FOREIGN PERSONS 

■ 1. The authority citation for part 800 

is revised to read as follows: 

Authority: 50 U.S.C. 4565; E.O. 11858, as 

amended, 73 FR 4677. 

■ 2. The heading for part 800 is revised 

to read as set forth above. 

Subpart A—General 

■ 3. In § 800.101, remove ‘‘(50 U.S.C. 

App. 2170)’’ after ‘‘Defense Production 

Act of 1950’’ and add in its place ‘‘(50 

U.S.C. 4565)’’. 

■ 4. Amend § 800.103 by revising 

paragraph (a) and adding paragraph (c) 

to read as follows: 

§ 800.103 Applicability rule; prospective 

application of certain provisions. 

(a) Except as provided in paragraphs 

(b) and (c) of this section and otherwise 

in this part, the regulations in this part 

apply from the effective date. 

* * * * * 

(c) The amendments to this part 

published in the Federal Register on 

October 11, 2018, apply with respect to 

any covered transaction the review of 

which is initiated under section 721 on 

or after October 11, 2018. 

§ 800.104 [Removed] 

■ 5. Remove § 800.104. 

Subpart B—Definitions 

■ 6. Amend § 800.202 as follows: 

■ a. In paragraph (a) add ‘‘under the 

penalties provided in section 1001 of 

title 18, United States Code’’ after the 

word ‘‘certifying’’; and 

■ b. In the Note to § 800.202, remove ‘‘at 

http://www.treasury.gov/offices/ 

international-affairs/cfius/index.shtml’’ 

and add in its place ‘‘, currently 

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

policy-issues/international/thecommittee-on-foreign-investment-in-theunited-states-cfius’’ after ‘‘website’’. 

■ 7. Revise § 800.207 to read as follows: 

§ 800.207 Covered transaction. 

The term covered transaction means 

any transaction that is proposed or 

pending after August 23, 1988, by or 

with any foreign person that could 

result in foreign control of any U.S. 

business, including such a transaction 

carried out through a joint venture. 

■ 8. Revise § 800.209 to read as follows: 

§ 800.209 Critical technologies. 

The term critical technologies means 

the following: 

(a) Defense articles or defense services 

included on the United States 

Munitions List set forth in the 

International Traffic in Arms 

Regulations (ITAR) (22 CFR parts 120– 

130). 

(b) Items included on the Commerce 

Control List set forth in Supplement No. 

1 to part 774 of the Export 

Administration Regulations (EAR) (15 

CFR parts 730–774), and controlled— 

(1) Pursuant to multilateral regimes, 

including for reasons relating to 

national security, chemical and 

biological weapons proliferation, 

nuclear nonproliferation, or missile 

technology; or 

(2) For reasons relating to regional 

stability or surreptitious listening. 

(c) Specially designed and prepared 

nuclear equipment, parts and 

components, materials, software, and 

technology covered by 10 CFR part 810 

(relating to assistance to foreign atomic 

energy activities). 

(d) Nuclear facilities, equipment, and 

material covered by 10 CFR part 110 

(relating to export and import of nuclear 

equipment and material). 

(e) Select agents and toxins covered 

by 7 CFR part 331, 9 CFR part 121, or 

42 CFR part 73. 

(f) Emerging and foundational 

technologies controlled pursuant to 

section 1758 of the Export Control 

Reform Act of 2018. 

■ 9. Amend § 800.220 as follows: 

■ a. In paragraph (e), remove the second 

‘‘and’’; 


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■ b. Redesignate paragraph (f) as 

paragraph (h); 

■ c. Add paragraphs (f) and (g); 

■ d. In redesignated paragraph (h), 

remove ‘‘paragraphs (a) through (e)’’ and 

add in its place ‘‘paragraphs (a) through 

(g)’’ after ‘‘described in’’. 

The additions read as follows: 

§ 800.220 Party or parties to a transaction. 

* * * * * 

(f) In the case of a change in rights 

that a person has with respect to an 

entity in which that person has an 

investment, the person whose rights 

change as a result of the transaction and 

the entity to which those rights apply; 

(g) In the case of a transfer, agreement, 

arrangement, or any other type of 

transaction, the structure of which is 

designed or intended to evade or 

circumvent the application of section 

721, any person that participates in such 

transfer, agreement, arrangement, or 

other type of transaction; and’’; and 

* * * * * 

■ 10. Amend § 800.222 by removing ‘‘50 

U.S.C. App. 2170’’ after ‘‘Defense 

Production Act of 1950,’’ and adding in 

its place ‘‘50 U.S.C. 4565’’. 

■ 11. Revise § 800.224 to read as 

follows: 

§ 800.224 Transaction. 

The term transaction means: 

(a) A proposed or completed merger, 

acquisition, or takeover, including 

without limitation: 

(1) The acquisition of an ownership 

interest in an entity; 

(2) The acquisition or conversion of 

convertible voting instruments of an 

entity; 

(3) The acquisition of proxies from 

holders of a voting interest in an entity; 

(4) A merger or consolidation; 

(5) The formation of a joint venture; 

and 

(6) A long-term lease under which a 

lessee makes substantially all business 

decisions concerning the operation of a 

leased entity, as if it were the owner; 

(b) Any change in rights that a person 

has with respect to an entity in which 

that person has an investment; and 

(c) Any other transaction, transfer, 

agreement, or arrangement, the structure 

of which is designed or intended to 

evade or circumvent the application of 

section 721. 

Example. Corporation A, a foreign person, 

signs a concession agreement to operate the 

toll road business of Corporation B, a U.S. 

business, for 99 years. Corporation B, 

however, is required under the agreement to 

perform safety and security functions with 

respect to the business and to monitor 

compliance by Corporation A with the 

operating requirements of the agreement on 

an ongoing basis. Corporation B may 

terminate the agreement or impose other 

penalties for breach of these operating 

requirements. Assuming no other relevant 

facts, this is not a transaction. 

Note to § 800.224: See § 800.304 regarding 

factors the Committee will consider in 

determining whether to include the rights to 

be acquired by a foreign person upon the 

conversion of convertible voting instruments 

as part of the Committee’s assessment of 

whether a transaction that involves such 

instruments is a covered transaction. 

Subpart C—Coverage 

■ 12. Amend § 800.301 by adding 

paragraphs (e) and (f) to read as follows: 

§ 800.301 Transactions that are covered 

transactions. 

* * * * * 

(e) A change in the rights that a 

foreign person has with respect to a U.S. 

business in which the foreign person 

has an investment, if that change could 

result in foreign control of the U.S. 

business. 

Example. Corporation A, a foreign person, 

holds a 10 percent ownership interest in 

Corporation X, a U.S. business. Corporation 

A and Corporation X enter into a contractual 

arrangement pursuant to which Corporation 

A will provide consulting and other advisory 

services to Corporation X in exchange for the 

right to appoint the Chief Executive Officer 

and the Chief Technical Officer of 

Corporation X. Corporation A does not 

acquire any additional ownership interest in 

Corporation X pursuant to the contractual 

arrangement. The transaction is a covered 

transaction. 

(f) A transaction the structure of 

which is designed to evade or 

circumvent the application of section 

721. 

Example. Corporation A is organized 

under the laws of a foreign state and is 

wholly owned and controlled by a foreign 

national. With a view towards circumventing 

section 721, Corporation A transfers money 

to a U.S. citizen, who, pursuant to informal 

arrangements with Corporation A and on its 

behalf, purchases all the shares in 

Corporation X, a U.S. business. The 

transaction is a covered transaction. 

■ 13. Amend § 800.302 by adding 

paragraph (f) to read as follows: 

§ 800.302 Transactions that are not 

covered transactions. 

* * * * * 

(f) A change in the rights that a 

foreign person has with respect to a U.S. 

business in which that foreign person 

has an investment, if that change could 

not result in foreign control of the U.S. 

business. 

Example. Corporation A, a foreign person, 

holds a 10 percent ownership interest in 

Corporation X, a U.S. business. Corporation 

A and Corporation X enter into a contractual 

arrangement pursuant to which Corporation 

A gains the right to purchase an additional 

interest in Corporation X to prevent the 

dilution of Corporation A’s pro rata interest 

in Corporation X in the event that 

Corporation X issues additional instruments 

conveying interests in Corporation X. 

Corporation A does not acquire any 

additional rights or ownership interest in 

Corporation X pursuant to the contractual 

arrangement. Assuming no other relevant 

facts, the transaction is not a covered 

transaction. 

Subpart D—Notice 

■ 14. Revise § 800.401(a) and (e) to read 

as follows: 

§ 800.401 Procedures for notice. 

(a) A party or parties to a proposed or 

completed transaction may file a 

voluntary notice of the transaction with 

the Committee. Voluntary notice to the 

Committee is filed by sending one 

electronic copy of the notice that 

includes, in English, the information set 

out in § 800.402, including the 

certification required under paragraph 

(l) of that section. See the Committee’s 

section of the Department of the 

Treasury website, currently available at 

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

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

for electronic submission instructions. 

* * * * * 

(e) Upon receipt of the electronic copy 

of a notice filed under paragraph (a) of 

this section, including the certification 

required by § 800.402(l), the Staff 

Chairperson shall promptly inspect 

such notice for completeness. 

* * * * * 

■ 15. Amend § 800.402 as follows: 

■ a. In paragraph (c)(1)(viii), remove 

‘‘and’’; 

■ b. In paragraph (c)(1)(ix), add ‘‘and’’ 

after ‘‘transaction;’’ 

■ c. Add paragraph (c)(1)(x); 

■ d. In paragraph (l), remove ‘‘available 

at http://www.treas.gov/offices/ 

international-affairs/cfius/index.shtml’’ 

and add in its place ‘‘currently available 

at https://home.treasury.gov/policyissues/international/the-committee-onforeign-investment-in-the-united-statescfius’’ after ‘‘website’’; and 

■ e. Add paragraph (n). 

The additions read as follows: 

§ 800.402 Contents of voluntary notice. 

* * * * * 

(c) * * * 

(1) * * * 

(x) A copy of any partnership 

agreements, integration agreements, or 

other side agreements relating to the 

transaction.’’; 

* * * * * 


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(n) A party filing a voluntary notice 

may stipulate that the transaction is a 

covered transaction and, if the party 

stipulates that the transaction is a 

covered transaction, that the transaction 

is a foreign government-controlled 

transaction. A stipulation offered by any 

party pursuant to this section must be 

accompanied by a description of the 

basis for the stipulation. The required 

description of the basis shall include, 

but is not limited to, discussion of all 

relevant information responsive to 

paragraphs (c)(6)(iv) through (c)(6)(vi) of 

this section. A party that offers such a 

stipulation acknowledges that the 

Committee and the President are 

entitled to rely on such stipulation in 

determining whether the transaction is 

a covered transaction and/or a foreign 

government-controlled transaction for 

the purposes of section 721 and all 

authorities thereunder, and waives the 

right to challenge any such 

determination. Neither the Committee 

nor the President is bound by any such 

stipulation, nor does any such 

stipulation limit the ability of the 

Committee or the President to act on 

any authority provided under section 

721 with respect to any covered 

transaction. 

■ 16. Amend § 800.403 as follows: 

■ a. In paragraph (b), remove ‘‘thirtyday’’ and add ‘‘specified by § 800.502’’ 

after ‘‘review period’’; 

■ b. In Example 1, remove ‘‘thirty-day’’; 

and 

■ c. In Example 2, remove ‘‘25th’’ and 

add in its place ‘‘40th’’ and remove ‘‘30’’ 

and add in its place ‘‘45’’. 

Subpart E—Committee Procedures: 

Review And Investigation 

■ 17. Amend § 800.501 as follows: 

■ a. In paragraph (a) introductory text, 

add a new sentence before the existing 

sentence; and 

■ b. In paragraph (b) remove ‘‘thirtyday’’. 

The addition reads as follows: 

§ 800.501 General. 

(a) In any review or investigation of a 

covered transaction, the Committee 

should consider the factors specified in 

section 721(f) and, as appropriate, 

require parties to provide to the 

Committee the information necessary to 

consider such factors. * * * 

* * * * * 

■ 18. Amend § 800.502 by revising the 

section heading and paragraph (b) to 

read as follows: 

§ 800.502 Beginning of forty-five day 

review period. 

* * * * * 

(b) A 45-day period for review of a 

transaction shall commence on the date 

on which the voluntary notice has been 

accepted, agency notice has been 

received by the Staff Chairperson of the 

Committee, or the Chairperson of the 

Committee has requested a review 

pursuant to § 800.401(b). Such review 

shall end no later than the forty-fifth 

day after it has commenced, or if the 

forty-fifth day is not a business day, no 

later than the next business day after the 

forty-fifth day. 

* * * * * 

■ 19. Amend § 800.505(a) by removing 

‘‘thirty-day’’. 

■ 20. Amend § 800.506 as follows: 

■ a. In paragraph (a), remove ‘‘The 

Committee’’ and add in its place 

‘‘Subject to paragraph (e) of this section, 

the Committee’’ before ‘‘shall’’; and 

■ b. Add paragraphs (e) and (f) to read 

as follows: 

§ 800.506 Completion or termination of 

investigation and report to the President. 

* * * * * 

(e) In extraordinary circumstances, 

the Chairperson may, upon a written 

request signed by the head of a lead 

agency, extend an investigation for one 

15-day period. A request to extend an 

investigation must describe, with 

particularity, the extraordinary 

circumstances that warrant the 

Chairperson extending the investigation. 

The authority of the head of a lead 

agency to request the extension of an 

investigation may not be delegated to 

any person other than the deputy head 

(or equivalent thereof) of the lead 

agency. If the Chairperson extends an 

investigation pursuant to this paragraph 

(e) with respect to a covered transaction, 

the Committee shall promptly notify the 

parties to the transaction of the 

extension. 

(f) For purposes of paragraph (e) of 

this section, ‘‘extraordinary 

circumstances’’ means circumstances 

for which extending an investigation is 

necessary and the appropriate course of 

action due to a force majeure event or 

to protect the national security of the 

United States.’’ 

■ 21. Add § 800.510 to subpart E to read 

as follows: 

§ 800.510 Tolling of deadlines during lapse 

in appropriations. 

Any deadline or time limitation under 

this subpart E shall be tolled during a 

lapse in appropriations. 

Subpart G—Provision and Handling of 

Information 

■ 22. Amend § 800.701 as follows: 

■ a. In paragraph (a) remove ‘‘50 U.S.C. 

App. 2155(a)’’ after ‘‘pursuant to’’ and 

add in its place ‘‘50 U.S.C. 4555(a)’’; 

■ b. In paragraph (c) remove ‘‘at http:// 

www.treas.gov/offices/internationalaffairs/cfius/index.shtml’’ and add in its 

place ‘‘, currently available at https://

home.treasury.gov/policy-issues/ 

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

after ‘‘website’’; and 

■ c. In paragraph (d), remove ‘‘at http:// 

www.treas.gov/offices/internationalaffairs/cfius/index.shtml’’ and add in its 

place ‘‘, currently available at https://

home.treasury.gov/policy-issues/ 

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

after ‘‘website’’. 

■ 23. Amend § 800.702 as follows: 

■ a. Revise paragraph (a). 

■ b. Redesignate paragraphs (b), (c), and 

(d) as paragraphs (c), (d), and (e). 

■ c. Add new paragraph (b). 

■ d. In redesignated paragraph (e), 

remove ‘‘50 U.S.C. App. 2155(d)’’ after 

‘‘The provisions of’’ and add in its place 

‘‘50 U.S.C. 4555(d)’’. 

The revision and addition read as 

follows: 

§ 800.702 Confidentiality. 

(a) Except as provided in paragraph 

(b) of this section, any information or 

documentary material filed with the 

Committee pursuant to this part, 

including information or documentary 

material filed pursuant to § 800.401(f), 

shall be exempt from disclosure under 

5 U.S.C. 552, and no such information 

or documentary material may be made 

public. 

(b) Paragraph (a) of this section shall 

not prohibit disclosure of the following: 

(1) Information relevant to any 

administrative or judicial action or 

proceeding; 

(2) Information to Congress or to any 

duly authorized committee or 

subcommittee of Congress; 

(3) Information important to the 

national security analysis or actions of 

the Committee to any domestic 

governmental entity, or to any foreign 

governmental entity of a United States 

ally or partner, under the exclusive 

direction and authorization of the 

Chairperson, only to the extent 

necessary for national security 

purposes, and subject to appropriate 

confidentiality and classification 

requirements; or 

(4) Information that the parties have 

consented to be disclosed to third 

parties.’’; and 

* * * * * 

Subpart H—Penalties 

■ 24. Amend § 800.801 as follows: 


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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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