Clifford Chance
CFIUS Broadens Jurisdiction and Institutes Mandatory Filing Under Interim Rule
18 October 2018
On October 10, 2018, the U.S. Department of the Treasury, as chair of the Committee on Foreign Investment in the United States ("CFIUS"), issued interim regulations establishing the Critical Technology Pilot Program, which implements parts of the Foreign Investment Risk Review Modernization Act including expanding the scope of "Covered Transactions" and making transactions that involve sensitive technologies in certain industries subject to mandatory declarations. Failure to notify CFIUS when required could expose the parties to civil penalties equal to the value of the transaction as a whole. As a practical matter, these changes may push potential non-U.S. investors into detailed due diligence on the U.S. target's exposure to critical technologies and covered industries well in advance of signing the Share Purchase Agreement, as failure to identify and address the mandatory filing requirement when it applies could put the entire transaction at risk.
