Monday, March 2, 2009
The U.S. Department of the Treasury published regulations implementing the Foreign Investment and National Security Act of 2007 (FINSA), which amended Section 721 of the Defense Production Act of 1950. The new regulations were effective as of December 22, 2008.
FINSA codifies aspects of the structure, role, process, and responsibilities of the Committee on Foreign Investment in the United States (CFIUS). CFIUS is the committee that reviews 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. (You might remember the Dubai Ports Controversy).
The new regulations provide important guidance regarding key terms such as “control” and internal U.S. government procedures for the review and investigation of covered mergers, acquisitions and takeovers. The Department of the Treasury has said that it will publish guidance on the types of transactions that CFIUS has reviewed and that have presented national security considerations.
Hat tip to John Masterson.