Provisions Pertaining to Certain Investments in the United States by Foreign Persons, 51316-51322 [2018-22187]

Agencies

• DEPARTMENT OF THE TREASURY
• Office of Investment Security

[Federal Register Volume 83, Number 197 (Thursday, October 11, 2018)]
[Rules and Regulations]
[Pages 51316-51322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22187]


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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.

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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

[[Page 51317]]

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 Sec.  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: [email protected].

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-[agrave]-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.
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    \1\ Temporary regulations with no specific expiration date are 
``interim rules'' for purposes of Federal Register classification.
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    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

[[Page 51318]]

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

[[Page 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

0
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.

0
2. The heading for part 800 is revised to read as set forth above.

Subpart A--General

0
3. In Sec.  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)''.

0
4. Amend Sec.  800.103 by revising paragraph (a) and adding paragraph 
(c) to read as follows:


Sec.  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.


Sec.  800.104  [Removed]

0
5. Remove Sec.  800.104.

Subpart B--Definitions

0
6. Amend Sec.  800.202 as follows:
0
a. In paragraph (a) add ``under the penalties provided in section 1001 
of title 18, United States Code'' after the word ``certifying''; and
0
b. In the Note to Sec.  800.202, remove ``at https://www.treasury.gov/
offices/international-affairs/cfius/index.shtml'' and add in its place 
``, currently available at https://home.treasury.gov/policy-issues/international/the-committee-on-foreign-investment-in-the-united-states-cfius'' after ``website''.

0
7. Revise Sec.  800.207 to read as follows:


Sec.  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.

0
8. Revise Sec.  800.209 to read as follows:


Sec.  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.

0
9. Amend Sec.  800.220 as follows:
0
a. In paragraph (e), remove the second ``and'';

[[Page 51320]]

0
b. Redesignate paragraph (f) as paragraph (h);
0
c. Add paragraphs (f) and (g);
0
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:


Sec.  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
* * * * *

0
10. Amend Sec.  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''.

0
11. Revise Sec.  800.224 to read as follows:


Sec.  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 Sec.  800.224:  See Sec.  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

0
12. Amend Sec.  800.301 by adding paragraphs (e) and (f) to read as 
follows:


Sec.  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.

0
13. Amend Sec.  800.302 by adding paragraph (f) to read as follows:


Sec.  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

0
14. Revise Sec.  800.401(a) and (e) to read as follows:


Sec.  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 Sec.  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-foreign-investment-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 
Sec.  800.402(l), the Staff Chairperson shall promptly inspect such 
notice for completeness.
* * * * *

0
15. Amend Sec.  800.402 as follows:
0
a. In paragraph (c)(1)(viii), remove ``and'';
0
b. In paragraph (c)(1)(ix), add ``and'' after ``transaction;''
0
c. Add paragraph (c)(1)(x);
0
d. In paragraph (l), remove ``available at https://www.treas.gov/
offices/international-affairs/cfius/index.shtml'' and add in its place 
``currently available at https://home.treasury.gov/policy-issues/international/the-committee-on-foreign-investment-in-the-united-states-cfius'' after ``website''; and
0
e. Add paragraph (n).
    The additions read as follows:


Sec.  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.'';
* * * * *

[[Page 51321]]

    (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.

0
16. Amend Sec.  800.403 as follows:
0
a. In paragraph (b), remove ``thirty-day'' and add ``specified by Sec.  
800.502'' after ``review period'';
0
b. In Example 1, remove ``thirty-day''; and
0
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

0
17. Amend Sec.  800.501 as follows:
0
a. In paragraph (a) introductory text, add a new sentence before the 
existing sentence; and
0
b. In paragraph (b) remove ``thirty-day''.
    The addition reads as follows:


Sec.  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. * * *
* * * * *

0
18. Amend Sec.  800.502 by revising the section heading and paragraph 
(b) to read as follows:


Sec.  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 Sec.  
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.
* * * * *

0
19. Amend Sec.  800.505(a) by removing ``thirty-day''.

0
20. Amend Sec.  800.506 as follows:
0
a. In paragraph (a), remove ``The Committee'' and add in its place 
``Subject to paragraph (e) of this section, the Committee'' before 
``shall''; and
0
b. Add paragraphs (e) and (f) to read as follows:


Sec.  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.''

0
21. Add Sec.  800.510 to subpart E to read as follows:


Sec.  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

0
22. Amend Sec.  800.701 as follows:
0
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)'';
0
b. In paragraph (c) remove ``at https://www.treas.gov/offices/
international-affairs/cfius/index.shtml'' and add in its place ``, 
currently available at https://home.treasury.gov/policy-issues/international/the-committee-on-foreign-investment-in-the-united-states-cfius'' after ``website''; and
0
c. In paragraph (d), remove ``at https://www.treas.gov/offices/
international-affairs/cfius/index.shtml'' and add in its place ``, 
currently available at https://home.treasury.gov/policy-issues/international/the-committee-on-foreign-investment-in-the-united-states-cfius'' after ``website''.

0
23. Amend Sec.  800.702 as follows:
0
a. Revise paragraph (a).
0
b. Redesignate paragraphs (b), (c), and (d) as paragraphs (c), (d), and 
(e).
0
c. Add new paragraph (b).
0
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:


Sec.  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 Sec.  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

0
24. Amend Sec.  800.801 as follows:

[[Page 51322]]

0
a. In paragraph (a) remove ``, after the effective date, intentionally 
or through gross negligence,'';
0
b. Revise paragraph (b);
0
c. Redesignate paragraph (g) as paragraph (h); and
0
d. Add a new paragraph (g).
    The revision and addition read as follows:


Sec.  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.
* * * * *

0
25. Add Sec.  800.802 to subpart H to read as follows:


Sec.  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