Provisions Pertaining to Certain Transactions by Foreign Persons Involving Real Estate in the United States, 3158-3188 [2020-00187]

Download as PDF 3158 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations DEPARTMENT OF THE TREASURY Office of Investment Security 31 CFR Part 802 RIN 1505–AC63 Provisions Pertaining to Certain Transactions by Foreign Persons Involving Real Estate in the United States Office of Investment Security, Department of the Treasury. ACTION: Final rule; interim rule with request for comments. AGENCY: The final rule establishes regulations to implement the provisions relating to real estate transactions in section 721 of the Defense Production Act of 1950, as amended by the Foreign Investment Risk Review Modernization Act of 2018. This rule sets forth the scope of, and process and procedures relating to, the national security review by the Committee on Foreign Investment in the United States of certain transactions involving the purchase or lease by, or concession to, a foreign person of certain real estate in the United States. The interim rule also adds a new definition for the term ‘‘principal place of business,’’ and the Department of the Treasury is seeking comments on this definition. DATES: Effective date: The final rule is effective on February 13, 2020. The interim rule adding § 802.232 is effective on February 13, 2020. Comment date: The Department of the Treasury (Treasury Department) is seeking written comments from the public on the definition of ‘‘principal place of business’’ found at § 802.232, which must be received by February 18, 2020. ADDRESSES: Written comments on § 802.232 may be submitted through one of two methods: • Electronic Submission: Comments may be submitted 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 Treasury Department to make the comments available to the public. • Mail: Send to U.S. Department of the Treasury, Attention: Laura Black, Director of Investment Security Policy and International Relations, 1500 Pennsylvania Avenue NW, Washington, DC 20220. We encourage comments to be submitted via https:// lotter on DSKBCFDHB2PROD with RULES3 SUMMARY: VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 www.regulations.gov. Please submit comments only and include your name and company name (if any), and cite ‘‘Provisions Pertaining to Certain Transactions by Foreign Persons Involving Real Estate in the United States’’ in all correspondence. In general, the Treasury Department will post all comments to https:// 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: Laura Black, Director of Investment Security Policy and International Relations; Meena R. Sharma, Deputy Director of Investment Security Policy and International Relations; or James Harris, Senior 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 A. The Statute and Proposed Rule On August 13, 2018, the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), Subtitle A of Title XVII of Public Law 115–232, 132 Stat. 2173, became law. FIRRMA amended and updated section 721 (section 721) of the Defense Production Act of 1950 (DPA), which delineates the authorities and jurisdiction of the Committee on Foreign Investment in the United States (CFIUS or the Committee). FIRRMA maintains the Committee’s jurisdiction over any transaction which could result in foreign control of any U.S. business, and it broadens the authorities of the President and CFIUS under section 721 to review and to take action to address any national security concerns arising from certain noncontrolling investments and real estate transactions. Additionally, FIRRMA modernizes CFIUS’s processes to better enable timely and effective reviews of transactions falling under its jurisdiction. In FIRRMA, Congress acknowledged the important role of foreign investment in the U.S. economy and reaffirmed the United States’ open investment policy, consistent with the protection of national security. See section 1702(b) of FIRRMA. FIRRMA requires the issuance of regulations implementing its provisions. PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 In Executive Order 13456, 73 FR 4677 (January 23, 2008), the President directs the Secretary of the Treasury to issue regulations implementing section 721. On September 24, 2019, the Treasury Department published two proposed rules to implement provisions of FIRRMA. See 84 FR 50174 (September 24, 2019); 84 FR 50214 (September 24, 2019). (The Office of the Federal Register made versions available for public inspection on September 17, 2019.) Public comments on the proposed rules were due by October 17, 2019. The proposed rule at 84 FR 50214 proposed establishing new regulations at part 802 of title 31 of the Code of Federal Regulations (CFR). These regulations specifically relate to CFIUS’s authorities and the process and procedures to review transactions involving the purchase or lease by, or concession to, a foreign person of certain real estate in the United States. Further explanation of FIRRMA and the proposed provisions can be found in the proposed rule at 84 FR 50214; changes to the proposed rule are explained in further detail below. The proposed rule at 84 FR 50174, which proposed amendments to the CFIUS regulations codified at part 800 of title 31 of the CFR, is being finalized in a separate rulemaking (the part 800 rule). The part 800 rule specifically relates to CFIUS’s authorities and the process and procedures to review: (1) A merger, acquisition, or takeover by or with a foreign person that could result in foreign control of a U.S. business; (2) a non-controlling ‘‘other investment’’ in a U.S. business that affords a foreign person specified access to information in the possession of, rights in, or involvement in the substantive decisionmaking of certain U.S. businesses related to critical technologies, critical infrastructure, or sensitive personal data (which the part 800 rule and this preamble describe as ‘‘covered investments’’); (3) any change in a foreign person’s rights if such change could result in foreign control of a U.S. business or a covered investment; and (4) any other transaction, transfer, agreement, or arrangement, the structure of which is designed or intended to evade or circumvent the application of section 721. FIRRMA also authorizes the Committee to assess and collect fees with respect to covered real estate transactions for which a written notice is filed. The Treasury Department will publish a separate proposed rule implementing the Committee’s fee authority at a later date. E:\FR\FM\17JAR3.SGM 17JAR3 lotter on DSKBCFDHB2PROD with RULES3 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations B. Structure of FIRRMA Rulemaking and This Rule Consistent with CFIUS processes generally, this rule reflects extensive consultation with CFIUS member agencies, as well as other relevant U.S. Government agencies. This action finalizes the provisions for the new part 802 of title 31 of the CFR. This rule focuses on the Committee’s expanded jurisdiction over certain types of real estate transactions. Accordingly, this rule implements one part of the overall scope of CFIUS’s jurisdiction under section 721, as amended by FIRRMA. There are additional provisions in FIRRMA that are the subject of the part 800 rule. As explained in the preamble to the proposed rule, the Treasury Department is creating a new part (part 802) because it has determined that the technical and procedural aspects of CFIUS’s review of transactions involving real estate are sufficiently distinct from those related to control transactions and certain noncontrolling investments to warrant separate rulemaking. Nevertheless, this rule incorporates certain features and relevant provisions from part 800, which should be familiar to parties that have filed with CFIUS in the past. There are additional provisions in FIRRMA that are the subject of the part 800 rule. In particular, a transaction that could result in control of a U.S. business by a foreign person is subject to part 800, and is not a covered real estate transaction under this rule. Additionally, CFIUS’s new authority over covered investments in certain U.S. businesses, as provided by FIRRMA, is subject to part 800 (under the concurrent rulemaking). The Treasury Department recognizes that FIRRMA’s expansion of the Committee’s jurisdiction over certain real estate transactions may impact parties who have not traditionally had reason to file with CFIUS. This rule therefore seeks to provide clarity to the business and investment communities with respect to the types of real estate transactions that are covered by the new authority under FIRRMA. In particular, this rule implements CFIUS’s new real estate jurisdiction following the approach described in the proposed rule and is generally structured around specific sites—certain airports, maritime ports, and military installations—and specific geographic areas in or around those sites. (While the rule allows that ‘‘other facilities or properties of the U.S. Government’’ may in the future be included in the list of sites identified in the rule, none has been included at this time.) Given the specificity of certain VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 provisions of this rule, the Treasury Department anticipates that it will periodically review, and when necessary, amend the regulations to address changes in the national security landscape. In response to public comments, this action also implements an interim rule with respect to the definition of ‘‘principal place of business’’ found at § 802.232, and the Treasury Department is seeking public comment on this definition. II. Overview of Comments on the Proposed Rule During the public comment period, the Treasury Department received a number of written submissions on the proposed rule reflecting a wide range of views. All comments received by the end of the comment period are available on the public rulemaking docket at https://www.regulations.gov. Additionally, the Treasury Department hosted a public teleconference call to discuss the proposed rule on September 27, 2019, and a summary is available on the Committee’s section of the Treasury Department website. The Treasury Department considered each comment submitted on the proposed rule. Some of the comments were general in nature, for example, supporting the Treasury Department’s efforts and approach with respect to aspects of the proposed rule. Other commenters noted the potential impact of the proposed rule on certain types of real estate and related transactions. The Treasury Department recognizes the vital importance of foreign investment to the U.S. economy, including investments in real estate. The Treasury Department drafted the proposed rule, and made revisions in finalizing the rule, to protect U.S. national security from the risk posed by certain foreign investment while at the same time maintaining the open foreign investment policy of the United States. The Treasury Department has determined that the specificity provided in the rule—with respect to, for example, identification of specific sites and relevant distances—provides clarity to the business and investment communities with respect to the types of real estate transactions that are covered by the Committee’s new authority under FIRRMA. The Treasury Department will evaluate implementation of the rule and will provide, as appropriate, additional information to assist the public. Some commenters requested clarification of specific provisions. Where appropriate, the Treasury Department provided additional PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 3159 clarification in the text of the rule and included more illustrative examples. Some commenters, however, requested greater specificity than is appropriate in regulations of general applicability or revisions that conflict with the Committee’s statutory authority under FIRRMA. The section-by-section analysis below includes responses to comments. Further edits were made to the rule for consistency and clarity. In addition to comments on the substance of the rule, several commenters requested an extension of the public comment period. The Treasury Department did not extend the public comment period in light of the fixed effective date established by FIRRMA. The Treasury Department anticipates that it will periodically review, and as necessary, make changes to the regulations (and any appendices), consistent with applicable law, and when appropriate, will provide the public an opportunity to comment. III. Discussion of the Rule A. Relationship With Part 800 Before addressing individual sections of the rule raised in the comments or otherwise revised from the proposed rule, it is important to address the relationship between this rule and the part 800 rule, which as noted is being issued concurrently with this rule. The structure of the part 802 regulations is similar to the regulations at part 800, which are being updated and replaced through the concurrent rulemaking. Parties familiar with the part 800 regulations should find that this rule takes a comparable approach with respect to defining key terms, describing transactions that are covered and not covered under the rule, listing the information requirements for a filing to be complete, and setting forth the Committee’s process and procedures, among other things. While differences exist between this rule and the part 800 rule, the scope and overall approach taken by the Committee to evaluating, concluding action on, or taking action on a transaction is consistent with part 800 and section 721. Some commenters raised questions regarding specific sections of the rule that suggested additional clarity with respect to the relation between these two parts may be helpful. This rule is focused on certain types of real estate transactions involving a foreign person. Parties should be aware that certain transactions involving real estate could be covered transactions under the part 800 rule. For example, transactions that could result in foreign control or certain non-controlling investments by a foreign E:\FR\FM\17JAR3.SGM 17JAR3 3160 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations lotter on DSKBCFDHB2PROD with RULES3 person in an entity engaged in interstate commerce in the United States and that owns real estate could be subject to part 800 instead of part 802. In some cases, a collection of assets that includes real estate may constitute a U.S. business under part 800. Additionally, a longterm lease or concession arrangement under which a lessee makes substantially all business decisions concerning the operation of a leased entity, as if it were the owner, could be subject to part 800 instead of part 802. In order to comprehensively understand the transactions that could fall within the scope of this rule, in contrast to the transactions that could fall within the scope of the part 800 rule, the public is encouraged to be aware of the separate and concurrent rulemaking on part 800. Finally, although FIRRMA introduces the term ‘‘close proximity’’ in the context of real estate transactions, and this rule defines the geographic coverage for real estate transactions, CFIUS has and will continue to retain the authority to assess and, if necessary, take action with respect to any covered transaction under the part 800 rule that gives rise to national security concerns on the basis of proximity to any government site and activity. The Committee’s authority under the part 800 rule to review and take action on a transaction is not limited in any way by the sites or distances specified in this rule. B. Interim Rule: Section 802.232— Principal Place of Business This rule includes a definition of ‘‘principal place of business’’ as an interim rule. The interim rule is effective as of February 13, 2020, and the Treasury Department is seeking public comment on the new definition through February 18, 2020. The proposed rule used the term ‘‘principal place of business’’ but did not define it. A commenter urged the Committee to provide additional clarity by defining the term. In response to this comment and comments received on the part 800 rule, § 802.232 now provides a definition of a party’s ‘‘principal place of business’’ as ‘‘the primary location where an entity’s management directs, controls, or coordinates the entity’s activities, or, in the case of an investment fund, where the fund’s activities and investments are primarily directed, controlled, or coordinated by or on behalf of the general partner, managing member, or equivalent,’’ subject to the qualification in § 802.232(b). For those entities whose nerve center is in the United States, the purpose of the qualification in § 802.232(b) is to nevertheless ensure VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 consistent treatment of an entity’s principal place of business in accordance with its own assertions to government entities, provided the facts have not changed since those assertions. Because the definition of ‘‘principal place of business’’ in § 802.232 is new, it is being made effective by this rule on an interim basis and may be amended based on comments received. As an interim rule, § 802.232 will become effective on the same date as the other provisions in this rule (i.e., February 13, 2020) to provide clarity and certainty for transaction parties. The Treasury Department invites comments on this interim rule. C. Summary of Comments and Changes From the Proposed Rule 1. Subpart A—General Section 802.102—Risk-Based Analysis The proposed rule, at § 802.102, defined the terms ‘‘threat,’’ ‘‘vulnerabilities,’’ and ‘‘consequences to national security’’ in describing the riskbased analyses undertaken by the Committee to determine whether a specific transaction represents a risk to national security. One commenter sought clarification about how, specifically, these terms would be applied to use and lease agreements with foreign airlines. The rule makes no change to the proposed text of § 802.102 in response to this comment because the rule applies to many types of real estate transactions, and it would be inappropriate in regulations of general applicability to specify the application of this provision to a particular type of transaction. In conducting a risk-based analysis for any transaction, CFIUS analyzes the particular facts and circumstances of the transaction to identify the national security considerations, if any, presented by the transaction. Section 721(f) of the DPA, as amended, provides an illustrative list of factors for consideration by CFIUS and the President in determining whether a covered transaction poses a national security risk. Some of these factors may be relevant to covered real estate transactions. While further discussing the specific factors relevant to particular types of real estate transactions in one sector is not appropriate for a broader rule, the Committee will consider whether additional information can be made publicly available to assist parties in understanding the Committee’s analysis in general. In the meantime, parties may find helpful the Treasury Department’s previously published Guidance Concerning the National Security PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 Review Conducted by CFIUS, 73 FR 74567 (December 8, 2008), which is still in effect. Section 802.105—Rules of Construction and Interpretation The rule adds a new section to clarify that the examples included in the regulations are provided for informational purposes and should not be construed to alter the meaning of the text of the regulations in this part, as well as to clarify that, as used throughout the regulations, the term ‘‘including’’ means ‘‘including without limitation.’’ 2. Subpart B—Definitions Subpart B sets forth the defined terms for part 802. More than half of the defined terms in this rule are incorporated from the part 800 rule, with conforming changes to apply in the context of real estate transactions, as applicable. The remainder of the terms are specifically defined for part 802. Section 802.203—Close Proximity The proposed rule defined ‘‘close proximity’’ as the area that extends outward one mile from the boundary of a relevant site. Some commenters encouraged the Committee to ensure that applicable set-back distances are appropriately tailored to each individual site. A number of commenters supported an online resource—such as a map or other interactive tool—to assist the public in understanding the geographic areas that are subject to CFIUS jurisdiction under the rule. The rule makes no change to this definition in response to these comments. The identification of particular military installations and the distances around those sites were determined by the Department of Defense based upon an evaluation of national security considerations. The Department of Defense will continue on an ongoing basis to assess its military installations and the geographic scope set under the rule to ensure appropriate application in light of national security considerations. With respect to the comments seeking an online resource, the Treasury Department anticipates making available a web-based tool to help the public understand the geographic coverage of the rule. In the meantime, information relevant to certain aspects of the rule is available online. For example, the Census Bureau within the Department of Commerce maintains a web-based system, TIGERweb, which allows users to select features (e.g., military installations, urbanized areas, E:\FR\FM\17JAR3.SGM 17JAR3 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations and urban clusters) and view such attributes on a map. Additionally, each of the National Oceanic and Atmospheric Administration and the Bureau of Ocean Energy Management maintains a web-based map delineating U.S. maritime boundaries, including the territorial sea and other attributes relevant to the geographic coverage under the rule. Section 802.206—Concession The proposed rule defined ‘‘concession’’ as a grant of rights by a U.S. public entity for the purpose of developing or operating infrastructure for an airport or maritime port. A commenter noted that this term is defined differently in the Department of Transportation regulations regarding airport concessions and suggested that the specific definition in the proposed rule might cause confusion given the term’s usage in the Department of Transportation regulations. The rule makes no change to this definition in response to the comment. The Department of Transportation definition does not match the intended scope of real estate transactions subject to CFIUS’s jurisdiction as implemented by the rule. Nevertheless, parties in all industries, including the airport concession industry, should not be confused about the meaning of the term ‘‘concession’’ in the rule as it is explicitly defined as a type of real estate transaction. For greater clarity, the rule does contain a revision specifying that the defined term includes the assignment of part of a concession. lotter on DSKBCFDHB2PROD with RULES3 Section 802.208—Control The proposed rule adopted the definition of ‘‘control’’ from the proposed rule for part 800. The part 800 rule makes a technical correction to the definition of ‘‘control,’’ and in order to remain consistent with part 800, this rule makes the same technical correction. In particular, § 802.208(c)(4) has been revised to clarify that antidilution protections are more accurately characterized as a right instead of a power. Section 802.210—Covered Port The proposed rule provided definitions for the terms ‘‘airport’’ and ‘‘maritime port.’’ A commenter suggested that the Committee publish an appendix listing the airports and maritime ports that meet the definitions in the proposed rule, noting that the list of relevant sites may change and some practitioners are not familiar with information published by the Department of Transportation. Another commenter suggested that the VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 Committee make available on its website hyperlinks to the relevant lists of airports and maritime ports maintained by the Department of Transportation. Several revisions have been made to the rule in response to the comments. First, the rule combines the definitions of ‘‘airport’’ and ‘‘maritime port’’ from the proposed rule into a new term, ‘‘covered port.’’ This definition of ‘‘covered port’’ identifies in § 802.210(a) the relevant lists maintained by the Department of Transportation and clarifies the specific references to the various lists. Second, the definition includes provisions to clarify the effective date of any changes to the Department of Transportation lists. Specifically, § 802.210(b)(1) sets forth a 30-day delayed effectiveness for any additions to any of the airport and maritime port lists under the definition of ‘‘covered port’’ in paragraph (a). This was done because changes to the lists are not published in the Federal Register, and the Treasury Department wanted to provide the public with a notice period for any additions. By contrast, when an airport or maritime port no longer meets the rule’s definition of covered port in paragraph (a), the removal of the port from the relevant list will be recognized immediately upon publication of the updated list by the Department of Transportation. The rule adds § 802.210(b)(2) to make clear that the airport or maritime port list that applies for any particular transaction is the list that is in effect (taking into account the 30-day delayed effectiveness in paragraph (b)(1)) on the day prior to the earlier of the date on which the parties have signed a written document establishing the material terms of the transaction or the completion date. With respect to compiling all covered ports into a single list, the Treasury Department has determined it most practicable to direct the public to available online resources maintained and updated by the Department of Transportation. The Treasury Department anticipates making information available on the CFIUS web page that will assist the public in navigating to the relevant lists maintained by the Department of Transportation. Section 802.211—Covered Real Estate The proposed rule defined ‘‘covered real estate’’ in a manner that connected specific sites with the relevant geographic coverage in and around those sites. Commenters did not suggest specific changes to the text of this definition. Instead, commenters PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 3161 generally supported the approach in the proposed rule of identifying specific sites and distances, and supported having online resources available to assist the public in understanding the geographic coverage of the rule. In particular, commenters expressed an interest in understanding the delineation of certain boundaries, including the U.S. coastline. The rule revises paragraph (b)(4) of this section by replacing the 12 nautical mile reference with a reference to the territorial sea. The Treasury Department has determined that a reference to the territorial sea provides greater clarity to the public. Additionally, as noted above, the Treasury Department anticipates making a web-based tool available in the near-term to assist the public. In the meantime, existing U.S. Government resources provide relevant information for purposes of understanding various aspects of this rule. Section 802.212—Covered Real Estate Transaction The proposed rule defined ‘‘covered real estate transaction’’ to capture the types of transactions subject to CFIUS’s jurisdiction under the rule. A commenter suggested that the definition explicitly exclude transactions between a foreign person and its parent as well as between a foreign person and one or more of its controlled affiliates. The commenter also requested clarification with respect to submitting a single declaration or filing a single notice for multiple covered real estate transactions that are in close proximity to one another and associated with a single project such as in the renewable energy industry. Another commenter suggested that the rule cover other categories of real estate transactions—such as those involving cropland and rare earth minerals. The rule makes no change to the definition of ‘‘covered real estate transaction’’ in response to the comments. First, an intra-company transfer of assets, including real estate, carried out to achieve some legal, financial, or other business objective, might not constitute a covered real estate transaction, and in any case might not result in a change in the ultimate parent of the entity with the covered real estate and, therefore, might not present new national security considerations. However, the particular facts and circumstances of the specific arrangement would need to be considered. Second, with respect to multiple covered real estate transactions that are part of a larger project, a revision to the rule is not necessary E:\FR\FM\17JAR3.SGM 17JAR3 3162 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations lotter on DSKBCFDHB2PROD with RULES3 because parties can and should consider the particular circumstances of any transaction, including related transactions, in determining whether to submit a single declaration or notice or multiple to the Committee for review. National security factors, timing considerations, and other transaction characteristics may weigh in favor of taking a particular approach. Related to this comment, however, the rule has been revised in the sections describing the contents of declarations and notices to include a description of whether the transaction is part of a larger project undertaken by the foreign person. Finally, the Committee has not expanded this definition to cover other categories of real estate transactions because the categories suggested by the commenter are not authorized under FIRRMA. This section incorporates other revisions including to § 802.212(b) to clarify that a purchase, lease, or concession, where there is a subsequent change in rights that could result in the foreign person having at least three property rights, is a covered real estate transaction. Section 802.214—Excepted Real Estate Foreign State The Treasury Department received a number of comments on the definition of ‘‘excepted real estate foreign state.’’ Commenters supported the concept of the excepted real estate foreign state and requested that the initial list be published as soon as possible. Commenters suggested particular countries or defined groups of countries be included as excepted real estate foreign states and that advance notice be given prior to any rescission. Commenters also requested that the factors for a determination under § 802.1001 be precise and transparent and that the Committee consult with foreign states seeking to qualify as excepted real estate foreign states. The rule makes no change to the proposed text in response to these comments. With respect to the eligible foreign states, the Committee has initially selected Australia, Canada, and the United Kingdom of Great Britain and Northern Ireland. The Committee identified these countries due to aspects of their robust intelligence-sharing and defense industrial base integration mechanisms with the United States. Additionally, as noted in the preamble to the proposed rule, the concept and definition of ‘‘excepted real estate foreign states’’ are new and an expansive application carries potentially significant implications for the national security of the United VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 States. Consequently, the Committee is initially identifying a limited number of eligible foreign states and may expand the list in the future. The rule revises this section to clarify that the definition of ‘‘excepted real estate foreign state’’ operates as a twocriteria conjunctive test, with delayed effectiveness for the second criterion. Thus, as of February 13, 2020, each of the three foreign states that the Committee identifies as eligible foreign states will be an excepted real estate foreign state, without regard to the second criterion (i.e., favorable determination under § 802.1001). In order for each of these countries to remain an excepted real estate foreign state after the end of the two-year delayed effectiveness period (i.e., February 13, 2022), the Committee must make a determination under § 802.1001. This two-year period is intended to provide these initial eligible foreign states time to ensure that their national security-based foreign investment review processes and bilateral cooperation with the United States on national security-based investment reviews meet the requirement under § 802.1001. This two-year period also provides the Committee time to develop processes and procedures for making determinations under § 802.1001, which could be applied to a broader group of countries in the future. In selecting the initial eligible foreign states, the Committee takes no position on whether the foreign states currently meet the determination factors discussed below at § 802.1001. Finally, the rule removes language regarding internal Committee processes (for which a conforming change was also made in § 802.1001), and revises note 1 to § 802.214 to clarify the publication mechanics for identifying the foreign states that have met each of the two separate criteria of the definition of ‘‘excepted real estate foreign state.’’ Section 802.215—Excepted Real Estate Investor The proposed rule set forth a definition of ‘‘excepted real estate investor,’’ taking into account increasingly complex ownership structures and accounting for such structures in the application of the Committee’s jurisdiction. With respect to the criteria to qualify as an excepted real estate investor, commenters discussed the board composition requirement, noting that it was limiting and suggested changes. Commenters also sought additional clarity regarding the process to be considered an excepted real estate investor, including PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 how an excepted real estate investor can prove that status, or whether an excepted real estate investor would receive a form or certificate from the Committee establishing that status. Other commenters suggested that the Committee adopt a parallel category to excepted real estate investor, which some termed ‘‘excepted trusted real estate investor,’’ that would allow certain investors who are not connected to an excepted real estate foreign state to receive the benefits of being an excepted real estate investor. A commenter suggested various criteria for this concept, including the individual investor’s previous interactions with the Committee. In response to these comments and similar comments received on the part 800 proposed rule, the rule modifies the definition of ‘‘excepted real estate investor.’’ First, the board member nationality criterion is revised to allow up to 25 percent representation by foreign nationals of foreign states that are not excepted real estate foreign states. Second, the percentage ownership limit for an individual investor in an excepted real estate investor is revised from five to 10 percent. Third, the definition of ‘‘minimum excepted ownership’’ under § 802.228 is revised as discussed below. The rule does not make other changes in response to the comments. All of the conditions under § 802.215(a)(3), including the minimum excepted ownership conditions, apply to each parent (as defined at § 802.229) of the foreign person. There is no separate process for the Committee to provide a determination for a prospective investor on whether it qualifies as an excepted real estate investor. As with other jurisdictional determinations, parties themselves should assess whether they qualify as excepted real estate investors. It is important to note that not qualifying as an excepted real estate investor should not be interpreted as an individualized assessment that the particular foreign person poses a threat to national security. Consistent with FIRRMA, the ‘‘excepted real estate investor’’ definition focuses on the investor’s connection to an excepted real estate foreign state, which provides the greatest clarity to the business and investment communities while protecting national security interests. Such a definition also furthers the Committee’s efforts to encourage partner countries to implement robust processes to review foreign investment in their countries and increase cooperation with the United States. Notably, the excepted real estate investor definition eliminates E:\FR\FM\17JAR3.SGM 17JAR3 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations lotter on DSKBCFDHB2PROD with RULES3 Committee jurisdiction for specified real estate transactions by certain investors. Therefore, some criteria suggested by commenters as part of the ‘‘excepted trusted real estate investor’’ concept are less suitable for determining jurisdiction and more suitable for other issues, such as certain aspects of the part 800 rule relating to mandatory declarations. Finally, the rule revises § 802.215(b) to specify when the ownership interests of separate foreign persons will be aggregated for the purposes of § 802.215(a)(3)(iv). The rule also modifies § 802.215(d) to include the criteria in § 802.215(c)(1)(i) through (iii) in order to retain jurisdiction over certain transactions where the foreign investor is deemed not to be an excepted real estate investor subsequent to the transaction due to action by the President under section 721, or enforcement by the Committee of violations under this part, parts 800 or 801, or section 721. Section 802.216—Excepted Real Estate Transaction The proposed rule defined ‘‘excepted real estate transaction’’ by listing specific types of transactions that are not covered real estate transactions, as well as examples. Some commenters sought clarification with respect to when the acquisition of commercial real estate constitutes the acquisition of a U.S. business. Some commenters suggested broadening certain exceptions. A couple of these comments noted the application of the rule in the airport context and suggested broadening the exception for retail trade, accommodation, and food service sector establishments, as well as excepting foreign air carrier leasing arrangements. One commenter sought clarification on the exception related to commercial space and whether 10 percent of tenants should be determined by the number of leaseholders or by the number of employee-occupants in the commercial space. Another commenter suggested excluding certain shore-based and offshore areas and structures. The rule is revised in response to certain of the comments. First, the rule adds an exception for ‘‘foreign air carriers,’’ as defined in 49 U.S.C. 40102, to the extent that the lease or concession is related to the foreign person’s activities as a foreign air carrier, and for whom the Department of Homeland Security’s Transportation Security Administration has accepted a security program under 49 CFR 1546.105. This exception was added in light of the Department of Homeland Security’s existing oversight with respect to foreign air carriers. Second, the rule VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 revises the exception for retail trade, accommodation, and food service sector establishments by eliminating the reference to the North American Industry Classification System codes and instead applying the exception to leases and concessions of real estate that may be used only for the purposes of engaging in the retail sale of consumer goods or services to the public. This revision provides a broader exception for retail services as compared to the proposed rule, with respect to, for example, car rental and parking. Finally, the rule clarifies through the text of § 802.216(f) and illustrates through a new example that the exception related to commercial space in a building is based on the number of parties that own, lease or have a concession to the commercial space in the building. The rule makes other clarifying edits to this section, including in the illustrative examples. Changes were not made in this section in response to the comment regarding certain shore-based and offshore areas and structures based on a balancing of various considerations. Section 802.217—Extended Range The proposed rule defined the ‘‘extended range’’ to mean the area that extends 99 miles outward from the outer boundary of close proximity of certain military installations, but, where applicable, no more than 12 nautical miles seaward of the coastline of the United States. Commenters sought to understand the rationale behind the specific distance set in the regulations and the interaction with the exception under § 802.216(c) for urbanized areas and urban clusters. The rule makes no change to the proposed definition of ‘‘extended range’’ in response to the comments. The particular military installations listed in the appendix and the covered distances defined in the regulations were determined by the Department of Defense based upon an evaluation of national security considerations. The Department of Defense will continue on an ongoing basis to assess its military installations and the geographic scope set under the rule to ensure appropriate application in light of national security considerations. The rule does replace the reference to 12 nautical miles with a reference to the territorial sea. As noted above in the definition of ‘‘covered real estate,’’ the Treasury Department has determined that a reference to the territorial sea will be more useful to the public as a geographic reference. PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 3163 Section 802.224—Investment Fund The rule adds a definition for investment fund that conforms to the term used in the part 800 rule. This term was added in part 802 to provide clarity with respect to the new interim definition of ‘‘principal place of business.’’ Section 802.226—Lease The definition of ‘‘lease’’ is modified in the rule to clarify that the term includes assignments in whole or part. Section 802.228—Minimum Excepted Ownership To conform with changes to part 800, in response to comments received on specific provisions of that separate rulemaking, the rule amends the text of § 802.228 by revising the minimum excepted ownership percentage in § 802.228(b) from 90 to 80 percent. Section 802.229—Parent To conform with changes to part 800, in response to comments received on that separate rulemaking, the rule adds a provision at § 802.229(a)(2) that explicitly includes a general partner, managing member, or equivalent of an entity within the definition of ‘‘parent.’’ The rule also makes some minor technical edits and adds an example illustrating an entity with more than one parent. Section 802.233—Property Right The proposed rule included as an element of a covered real estate transaction that certain ‘‘property rights’’ be afforded to the foreign person through the purchase, lease, or concession of covered real estate. The rule adds examples under this definition. The first example illustrates that the right to exclude others from physically accessing the property need not be absolute with respect to all other persons or activities. The second example illustrates that a right is afforded, even if it is not exercisable until a separate regulatory approval is received. Section 802.238—United States The rule revises the definition of ‘‘United States’’ for consistency with the definition in FIRRMA. Section 802.241—U.S. Business The proposed rule defined ‘‘U.S. business’’ to conform to the definition in FIRRMA. Commenters to the proposed rule for part 800 requested clarity with respect to the Committee’s intended interpretation of the term U.S. business. Consistent with the concurrent rulemaking finalizing part E:\FR\FM\17JAR3.SGM 17JAR3 3164 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations 800, the rule makes no change to the proposed definition of ‘‘U.S. business.’’ The proposed definition tracks the language of FIRRMA and is not intended to suggest that the extent of a business’s activities in interstate commerce in the United States is irrelevant to the Committee’s analysis of national security risk. Section 802.244—Voting Interest The proposed rule provided a definition for the term ‘‘voting interest.’’ One commenter sought clarification of the term and whether it includes consent, veto, right to appoint a board member (without a shareholder vote), or other special rights. The commenter also suggested the term be limited to voting interests in major decisions. Similar comments were made on this provision in the part 800 rule. The rule makes no change in response to the comments. The definition of ‘‘voting interest’’ is long-established, and, any revisions will have wideranging effects throughout the part 802 and part 800 regulations because voting interest is incorporated into other defined terms, such as parent. Where appropriate, the Treasury Department provided clarification through revisions to the part 800 rule. 3. Subpart C—Coverage lotter on DSKBCFDHB2PROD with RULES3 Section 802.302—Transactions That Are Not Covered Real Estate Transactions One commenter requested a sample list of transactions that are not covered real estate transactions. The commenter provided examples and noted its understanding that such scenarios would not be covered real estate transactions because they would not meet the criteria under the rule if a foreign person were an investor. No change was made to this section in response to this comment because whether a particular type of transaction is covered by the rule is determined by the particular facts and circumstances. This section was revised for clarity by streamlining the provisions and removing an example. Section 802.303—Lending Transactions The proposed rule discussed lending transactions at § 802.303, which include commercial mortgages. While a lending transaction generally shall not, by itself, constitute a covered real estate transaction, the proposed rule discussed factors that CFIUS will consider in determining whether the lending transaction is a covered real estate transaction. One commenter requested language be added that would except from CFIUS jurisdiction lenders who take possession of property in VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 foreclosure and put the property back on the market a short period of time later. No change was made to this section in response to this comment because an assessment of the particular facts and circumstances would be needed to determine whether national security concerns arise from the transaction. The proposed rule noted the factors the Committee will consider with respect to whether a default under a lending transaction would afford the foreign person the property rights defined in the proposed rule. In determining whether to accept a declaration or notice, the Committee also will consider the immediacy or occurrence of the default or other condition. The rule makes clarifying revisions in this section including incorporating the change in rights construct to paragraph (a)(1) and consideration of whether the foreign person had made arrangements to transfer the ownership or property rights to an excepted real estate investor under paragraph (a)(2). 4. Subpart D—Declarations The proposed rule, in subpart D, set out an abbreviated filing process through the submission of a declaration. Section 802.401—Procedures for Declarations A commenter expressed concern about having public entities, such as airports, submit declarations or file notices. No change was made to this section in response to this comment. The Treasury Department has attempted to minimize the burden of this rule on U.S. public entities, particularly where the counterparty has the relevant information to submit a notice or file a declaration. Section 802.402—Contents of Declarations The rule modifies this section to require additional information including to allow the Committee to more efficiently assess whether a transaction falls under its jurisdiction for real estate transactions. The rule requires a brief description of whether the transaction is part of a larger project undertaken by the foreign person, and whether the foreign person is acquiring a collection of assets or interest in an entity. This information will help the Committee better determine whether there is a U.S. business that is the subject of the transaction. Additionally, this section is revised to require parties to provide a brief description of any U.S. Government leases involved in the transaction. With respect to the foreign person and its affiliates, the final rule PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 further clarifies what relevant address information should be included in a declaration. Finally, the rule requires that parties provide additional information about the transaction such as any applicable term, current physical security of premises, and distance to covered port(s) or military installation(s) relevant to CFIUS’s geographic coverage under the rule. Section 802.405—Committee Actions The rule clarifies that the Committee may request that parties file a written notice under subpart E if it has reason to believe that the transaction may raise national security considerations. 5. Subpart E—Notices The rule makes revisions to § 802.502(b) similar to the revisions discussed above under § 802.402, and makes other clarifying edits. 6. Subpart I—Penalties and Damages The proposed rule set out the penalty provisions, at subpart I. A number of clarifying and technical edits were made to this subpart. Additionally, the rule revises § 802.901(e) to allow tolling of the Committee’s deadline to respond to a petition, upon written agreement with the party, to facilitate further negotiations, including for settlement of the potential civil monetary penalty. 7. Appendix A The appendix to the proposed rule identified bases, ranges, and other installations that meet the definition of ‘‘military installation’’ at § 802.227, and, as applicable, related counties or other geographic areas throughout the United States that are covered real estate for the purposes of this part. A commenter sought additional information about whether, and how, appendix A will be revised in the future. The Treasury Department anticipates updating appendix A, as appropriate, through notices published in the Federal Register. The rule includes revisions to appendix A to remove one site and to further refine the geographic areas covered in connection with the sites listed at part 3 of the appendix. 8. Other Comments The Treasury Department received several comments that did not address any specific provision of the rule. For example, one commenter sought guidance from the Committee on when parties should submit a declaration rather than file a notice. Such advice is beyond the purview of this rule; whether a party files a notice or submits a declaration will depend on many E:\FR\FM\17JAR3.SGM 17JAR3 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations factors specific to the party and to the transaction. IV. Rulemaking Requirements Executive Order 12866 These regulations are not subject to the general requirements of Executive Order 12866, which governs review of regulations by the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB), because they relate to a foreign affairs function of the United States, pursuant to section 3(d)(2) of that order. In addition, these regulations are not subject to review under section 6(b) of Executive Order 12866 pursuant to section 7(c) of the April 11, 2018 Memorandum of Agreement between the Treasury Department and OMB, which states that CFIUS regulations are not subject to OMB’s standard centralized review process under Executive Order 12866. lotter on DSKBCFDHB2PROD with RULES3 Justification for Interim Rule The proposed rule, and the proposed rule for part 800 at 84 FR 50174, included provisions that use the term ‘‘principal place of business.’’ The Treasury Department received comments on these provisions, including recommendations to add a definition for the term. In response to these comments, a definition for ‘‘principal place of business’’ has been included. The Treasury Department believes it would benefit the public and the Committee to receive comments from the public on this definition before it is made final. This rule therefore contains an interim rule that implements a definition for the term ‘‘principal place of business’’ that will become effective with the rest of the rule, and the Treasury Department is providing the public 30 days to comment on the new definition of ‘‘principal place of business.’’ It is in the public interest to make the ‘‘principal place of business’’ definition effective on the same date as the rule. Commenters requested greater clarity concerning which parties are subject to CFIUS jurisdiction. The new definition directly addresses those requests and provides greater transactional certainty. By clarifying that certain transactions are not subject to CFIUS jurisdiction, the addition of the definition of ‘‘principal place of business’’ reduces the regulatory burden on the public, allowing some parties to forego the expense, time, and uncertainty involved in submitting a declaration or filing a notice with the Committee. Because of the added clarity and potential reduction in regulatory burden the VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 definition provides to the public, having it become effective immediately is in the public’s interest. Nonetheless, the Treasury Department is requesting comments to that definition and will consider them before finalizing the interim rule. Paperwork Reduction Act The collections of information contained in this rule were submitted to OMB for review along with the proposed rule, in accordance with the Paperwork Reduction Act of 1995 (PRA, 44 U.S.C. 3507(d)). No comments were received to the PRA estimates. However, and as noted above, the Treasury Department has modified some of the information requests associated with notices and on the declarations form. These changes represent clarifications that the Treasury Department identified in its review of the information requirements, as well as changes necessary to implement certain provisions that were modified from the proposed rule. The additional information requested is not substantially different from the information that was proposed to be collected, and the Treasury Department’s estimates of burden hours for completing declarations and notices do not differ from those estimated at the proposed rule stage. These collections have been submitted to OMB under control number 1505–0121. Under the PRA, 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 OMB. Regulatory Flexibility Act Regardless of whether the provisions of the Regulatory Flexibility Act (RFA, 5 U.S.C. 601 et seq.), apply to this rulemaking, for reasons noted in the preamble to the proposed rule, the Treasury Department prepared for public comment an Initial Regulatory Flexibility Analysis and determined through that analysis that the proposed rule would most likely not affect a substantial number of small entities. The Treasury Department specifically requested comments on the proposed rule’s effect on small entities; no such public comments were received. The Secretary of the Treasury hereby certifies that the rule will not have a significant economic impact on a substantial number of small entities, based on the following reasons. The rule expands the jurisdiction of the Committee to review the purchase or lease by, or concession to, a foreign person of certain real estate in the United States. Accordingly, the rule PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 3165 may impact any U.S. business, including a small U.S. business, that engages in a covered real estate transaction. There is no single source for information on the number of small U.S. businesses that would be involved in some way in the purchase or lease by, or concession to a foreign person of real estate that could be covered under this rule. However, the Treasury Department anticipates only 350 real estate transactions, out of the thousands or more of the annual number of real estate transactions in the United States, will be the subject of a declaration or notice of a covered real estate transaction. Even if each of these 350 transactions involved a small U.S. business, based on past experience it is likely that only a small, and not significant, percentage of those anticipated 350 real estate transactions will incur impacts, such as incurring additional costs through mitigation or action by the President. Additionally, the Treasury Department also has taken steps to reduce the burden of this rule on small entities. For example, in addition to filing notices of transactions with the Committee, the rule allows parties to submit shorter declarations to the Committee using an online fillable form. Also, the Committee anticipates making available a free, web-based tool to help the public understand the geographic coverage of the rule. As noted above, in the meantime, information relevant to certain aspects of the rule is available online. These tools should help reduce compliance costs for small entities. Congressional Review Act This rule has been submitted to OIRA, which has determined that the rule is a ‘‘major’’ rule under the Congressional Review Act (CRA). However, the Treasury Department has determined there is good cause under 5 U.S.C. 808(2) to publish the rule notwithstanding the timing requirements for major rules under 5 U.S.C. 801(a)(3) because delaying the effectiveness of this rule beyond 30 days is impracticable, unnecessary, and contrary to the public interest. Under FIRRMA, the provisions expanding jurisdiction over real estate transactions and establishing declarations, among others, will become effective on February 13, 2020, regardless of whether this rule is published and effective. See Section 1727(b)(1)(A) of FIRRMA. Without the processes, procedures and definitions provided by the rule as directed by FIRRMA, market participants will face substantial hardship, delay, and expense in complying with the requirements of E:\FR\FM\17JAR3.SGM 17JAR3 3166 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations FIRRMA. Accordingly, the Treasury Department finds good cause that notice and public procedure under 5 U.S.C. 801(a)(3) are impracticable, unnecessary, and contrary to the public interest. This rule will become effective on February 13, 2020, notwithstanding 5 U.S.C. 801(a)(3). List of Subjects in 31 CFR Part 802 Foreign investments in the United States, Federal buildings and facilities, Government property, Investigations, Investments, Investment companies, Land sales, National defense, Public lands, Real property acquisition, Reporting and recordkeeping requirements. ■ For the reasons set forth in the preamble, the Treasury Department adds part 802 to title 31 of the Code of Federal Regulations to read as follows: PART 802—REGULATIONS PERTAINING TO CERTAIN TRANSACTIONS BY FOREIGN PERSONS INVOLVING REAL ESTATE IN THE UNITED STATES lotter on DSKBCFDHB2PROD with RULES3 Subpart A—General Sec. 802.101 Scope. 802.102 Risk-based analysis. 802.103 Effect on other law. 802.104 Applicability rule. 802.105 Rules of construction and interpretation. Subpart B—Definitions 802.201 Business day. 802.202 Certification. 802.203 Close proximity. 802.204 Committee; Chairperson of the Committee; Staff Chairperson. 802.205 Completion date. 802.206 Concession. 802.207 Contingent equity interest. 802.208 Control. 802.209 Conversion. 802.210 Covered port. 802.211 Covered real estate. 802.212 Covered real estate transaction. 802.213 Entity. 802.214 Excepted real estate foreign state. 802.215 Excepted real estate investor. 802.216 Excepted real estate transaction. 802.217 Extended range. 802.218 Foreign entity. 802.219 Foreign government. 802.220 Foreign national. 802.221 Foreign person. 802.222 Hold. 802.223 Housing unit. 802.224 Investment fund. 802.225 Lead agency. 802.226 Lease. 802.227 Military installation. 802.228 Minimum excepted ownership. 802.229 Parent. 802.230 Party to a transaction. 802.231 Person. 802.232 Principal place of business. 802.233 Property right. VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 802.234 802.235 802.236 802.237 802.238 802.239 802.240 802.241 802.242 802.243 802.244 Purchase. Real estate. Section 721. Transaction. United States. Urban cluster. Urbanized area. U.S. business. U.S. national. U.S. public entity. Voting interest. Subpart A—General § 802.101 Subpart C—Coverage 802.301 Transactions that are covered real estate transactions. 802.302 Transactions that are not covered real estate transactions. 802.303 Lending transactions. 802.304 Timing rule for a contingent equity interest. Subpart D—Declarations 802.401 Procedures for declarations. 802.402 Contents of declarations. 802.403 Beginning of 30-day assessment period. 802.404 Rejection, disposition, or withdrawal of declarations. 802.405 Committee actions. Subpart E—Notices 802.501 Procedures for notices. 802.502 Contents of voluntary notices. 802.503 Beginning of 45-day review period. 802.504 Deferral, rejection, or disposition of certain voluntary notices. 802.505 Determination of whether to undertake an investigation. 802.506 Determination not to undertake an investigation. 802.507 Commencement of investigation. 802.508 Completion or termination of investigation and report to the President. 802.509 Withdrawal of notices. Subpart F—Committee Procedures 802.601 General. 802.602 Role of the Secretary of Labor. 802.603 Materiality. 802.604 Tolling of deadlines during lapse in appropriations. Subpart G—Finality of Action 802.701 Finality of actions under section 721. Subpart H—Provision and Handling of Information 802.801 Obligation of parties to provide information. 802.802 Confidentiality. Subpart I—Penalties and Damages 802.901 802.902 Penalties and damages. Effect of lack of compliance. Subpart J—Foreign National Security Investment Review Regimes 802.1001 Determinations. 802.1002 Effect of determinations. Appendix A to Part 802—List of Military Installations and Other U.S. Government Sites Authority: 50 U.S.C. 4565; E.O. 11858, as amended, 73 FR 4677. PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 Scope. (a) Section 721 of title VII of the Defense Production Act of 1950, as amended (50 U.S.C. 4565) authorizes the Committee on Foreign Investment in the United States to review transactions involving real estate that meet specified criteria, which are referred to in this part as ‘‘covered real estate transactions’’ and defined at § 802.212, and to mitigate any risk to the national security of the United States that arises as a result of such transactions. Section 721 also authorizes the President to suspend or prohibit any covered real estate transaction when, in the President’s judgment, there is credible evidence that leads the President to believe that the foreign person engaging in a covered real estate transaction might take action that threatens to impair the national security of the United States, and when provisions of law other than section 721 and the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) do not, in the judgment of the President, provide adequate and appropriate authority for the President to protect the national security of the United States in the matter before the President. (b) This part implements regulations pertaining to covered real estate transactions. Regulations pertaining to ‘‘covered transactions’’ are addressed in part 800 of this chapter. § 802.102 Risk-based analysis. Any determination of the Committee with respect to a covered real estate transaction, to suspend, refer to the President, or to negotiate, enter into or impose, or enforce any agreement or condition under section 721 shall be based on a risk-based analysis, conducted by the Committee, of the effects on the national security of the United States of the covered real estate transaction. Any such risk-based analysis shall include credible evidence demonstrating the risk and an assessment of the threat, vulnerabilities, and consequences to national security related to the transaction. For purposes of this part, any such analysis of risk shall include and be informed by consideration of the following elements: (a) The threat, which is a function of the intent and capability of a foreign person to take action to impair the national security of the United States; (b) The vulnerabilities, which are the extent to which the nature of the covered real estate presents susceptibility to impairment of national security; and E:\FR\FM\17JAR3.SGM 17JAR3 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations (c) The consequences to national security, which are the potential effects on national security that could reasonably result from the exploitation of the vulnerabilities by the threat actor. § 802.103 Effect on other law. Nothing in this part shall be construed as altering or affecting any other authority, process, regulation, investigation, enforcement measure, or review provided by or established under any other provision of federal law, including the International Emergency Economic Powers Act, or any other authority of the President or the Congress under the Constitution of the United States. § 802.104 Applicability rule. (a) Except as provided in paragraph (b) of this section and otherwise in this part, the regulations in this part apply from February 13, 2020. (b) The regulations in this part do not apply to any transaction for which: (1) The completion date is prior to February 13, 2020; or (2) The parties to the transaction have executed, prior to February 13, 2020, a binding written agreement, or other binding document, establishing the material terms of the transaction. § 802.105 Rules of construction and interpretation. (a) The examples included in this part are provided for informational purposes and should not be construed to alter the meaning of the text of the regulations in this part. (b) As used in this part, the term ‘‘including’’ means ‘‘including but not limited to.’’ Subpart B—Definitions § 802.201 Business day. lotter on DSKBCFDHB2PROD with RULES3 The term business day means Monday through Friday, except the legal public holidays specified in 5 U.S.C. 6103, any day declared to be a holiday by federal statute or executive order, or any day with respect to which the U.S. Office of Personnel Management has announced that Federal agencies in the Washington, DC, area are closed. For purposes of calculating any deadline imposed by this part triggered by the submission of a party to a transaction under § 802.501(i), any submissions received after 5 p.m. Eastern Time are deemed to be submitted on the next business day. Note 1 to § 802.201: See § 802.604 regarding the tolling of deadlines during a lapse in appropriations. § 802.202 Certification. (a) The term certification means a written statement signed by the chief VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 executive officer or other duly authorized designee of a party filing a notice, declaration, or information, certifying under the penalties provided in the False Statements Accountability Act of 1996, as amended (18 U.S.C. 1001) that the notice, declaration, or information filed: (1) Fully complies with the requirements of section 721, the regulations in this part, and any agreement or condition entered into with the Committee or any member of the Committee, and (2) Is accurate and complete in all material respects, as it relates to: (i) The transaction; and (ii) The party providing the certification, including its parents, subsidiaries, and any other related entities described in the notice, declaration, or information. (b) For purposes of this section, a duly authorized designee is: (1) In the case of a partnership, any general partner thereof; (2) In the case of a corporation, any officer or director thereof; (3) In the case of any entity lacking partners, officers, and directors, any individual within the organization exercising executive functions similar to those of a general partner of a partnership or an officer or director of a corporation; and (4) In the case of an individual, such individual or his or her legal representative. (c) In each case described in paragraphs (b)(1) through (4) of this section, such designee must possess actual authority to make the certification on behalf of the party filing a notice, declaration, or information. Note 1 to § 802.202: A sample certification may be found at the Committee’s section of the Department of the Treasury website. See §§ 802.402(f) and 802.502(k) regarding filing procedures for transactions in which a U.S. public entity is a party to the transaction. § 802.203 Close proximity. The term close proximity means, with respect to a military installation or another facility or property of the U.S. Government identified in this part, the area that extends outward one mile from the boundary of such military installation, facility, or property. § 802.204 Committee; Chairperson of the Committee; Staff Chairperson. The term Committee means the Committee on Foreign Investment in the United States. The Chairperson of the Committee is the Secretary of the Treasury. The Staff Chairperson of the Committee is the Department of the Treasury official so designated by the PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 3167 Secretary of the Treasury or by the Secretary’s designee. § 802.205 Completion date. The term completion date means, with respect to a transaction, the earliest date upon which the purchase, lease, or concession is made legally effective, or a change in rights that could result in a covered real estate transaction occurs. Note 1 to § 802.205: See § 802.304 regarding the timing rule for a contingent equity interest. § 802.206 Concession. The term concession means an arrangement, other than a purchase or lease, whereby a U.S. public entity grants a right to use real estate for the purpose of developing or operating infrastructure for a covered port. This term includes the assignment of a concession, in whole or in part, by the party who is not the U.S. public entity. § 802.207 Contingent equity interest. The term contingent equity interest means a financial instrument that currently does not constitute an equity interest but is convertible into, or provides the right to acquire, an equity interest upon the occurrence of a contingency or defined event. § 802.208 Control. (a) The term control means the power, direct or indirect, whether or not exercised, through the ownership of a majority or a dominant minority of the total outstanding voting interest in an entity, board representation, proxy voting, a special share, contractual arrangements, formal or informal arrangements to act in concert, or other means, to determine, direct, or decide important matters affecting an entity; in particular, but without limitation, to determine, direct, take, reach, or cause decisions regarding the following matters, or any other similarly important matters affecting an entity: (1) The sale, lease, mortgage, pledge, or other transfer of any of the tangible or intangible principal assets of the entity, whether or not in the ordinary course of business; (2) The reorganization, merger, or dissolution of the entity; (3) The closing, relocation, or substantial alteration of the production, operational, or research and development facilities of the entity; (4) Major expenditures or investments, issuances of equity or debt, or dividend payments by the entity, or approval of the operating budget of the entity; E:\FR\FM\17JAR3.SGM 17JAR3 lotter on DSKBCFDHB2PROD with RULES3 3168 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations (5) The selection of new business lines or ventures that the entity will pursue; (6) The entry into, termination, or non-fulfillment by the entity of significant contracts; (7) The policies or procedures of the entity governing the treatment of nonpublic technical, financial, or other proprietary information of the entity; (8) The appointment or dismissal of officers or senior managers or, in the case of a partnership, the general partner; (9) The appointment or dismissal of employees with access to critical technology or other sensitive technology or classified U.S. Government information; or (10) The amendment of the Articles of Incorporation, constituent agreement, or other organizational documents of the entity with respect to the matters described in paragraphs (a)(1) through (9) of this section. (b) In examining questions of control in situations where more than one foreign person has an ownership interest in an entity, consideration will be given to factors such as whether the foreign persons are related or have formal or informal arrangements to act in concert, whether they are agencies or instrumentalities of the national or subnational governments of a single foreign state, and whether a given foreign person and another person that has an ownership interest in the entity are both controlled by any of the national or subnational governments of a single foreign state. (c) The following minority shareholder protections shall not in themselves be deemed to confer control over an entity: (1) The power to prevent the sale or pledge of all or substantially all of the assets of an entity or a voluntary filing for bankruptcy or liquidation; (2) The power to prevent an entity from entering into contracts with majority investors or their affiliates; (3) The power to prevent an entity from guaranteeing the obligations of majority investors or their affiliates; (4) The right to purchase an additional interest in an entity to prevent the dilution of an investor’s pro rata interest in that entity in the event that the entity issues additional instruments conveying interests in the entity; (5) The power to prevent the change of existing legal rights or preferences of the particular class of stock held by minority investors, as provided in the relevant corporate documents governing such shares; and VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 (6) The power to prevent the amendment of the Articles of Incorporation, constituent agreement, or other organizational documents of an entity with respect to the matters described in paragraphs (c)(1) through (5) of this section. (d) The Committee will consider, on a case-by-case basis, whether minority shareholder protections other than those listed in paragraph (c) of this section do not confer control over an entity. Note 1 to § 802.208: This definition is included herein for the purpose of determining whether a foreign person may be involved in a covered real estate transaction. For additional information, see the examples provided at § 800.208, as relevant. § 802.209 Conversion. The term conversion means the exercise of a right inherent in the ownership or holding of a particular financial instrument to exchange any such instrument for an equity interest. § 802.210 Covered port. (a) The term covered port means, subject to paragraph (b) of this section, any port that is listed: (1) In the Department of Transportation, Federal Aviation Administration’s annual final enplanement data as a ‘‘large hub airport,’’ as that term is defined in 49 U.S.C. 40102; (2) In the Department of Transportation, Federal Aviation Administration’s annual final all-cargo landed weight data as an airport with annual aggregate all-cargo landed weight greater than 1.24 billion pounds; (3) By the Department of Transportation, Federal Aviation Administration as a ‘‘joint use airport,’’ as that term is defined in 49 U.S.C. 47175; (4) By the Department of Transportation, Maritime Administration as a commercial strategic seaport within the National Port Readiness Network; or (5) By the Department of Transportation, Bureau of Transportation Statistics as a top 25 tonnage, container, or dry bulk port. (b) For purposes of determining whether a port constitutes a covered port under paragraph (a) of this section, (1) Any port that is added after February 13, 2020 to any of the lists described in paragraph (a) of this section shall be deemed not to be in effect as a covered port until 30 days after the port’s addition to the relevant list maintained by the Department of Transportation; and (2) In the context of a particular transaction, the covered ports in effect PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 on the day immediately prior to, the earlier of, the date on which the parties sign a written document establishing the material terms of the transaction, or the completion date of the transaction, shall apply. Note 1 to § 802.210: The lists described in paragraph (a) of this section are published on the Department of Transportation website. § 802.211 Covered real estate. The term covered real estate means real estate that: (a) Is, is located within, or will function as part of, a covered port; or (b) Is located within: (1) Close proximity of any military installation described in § 802.227(b) to (o), or another facility or property of the U.S. Government, in each case as identified in the list at part 1 or part 2 of appendix A to this part; (2) The extended range of any military installation described in § 802.227(h), (k), or (m), as identified in the list at part 2 of appendix A to this part; (3) Any county or other geographic area identified in connection with any military installation described in § 802.227(a), as identified in the list at part 3 of appendix A to this part; or (4) Any part of a military installation described in § 802.227(p), as identified at part 4 of appendix A to this part, to the extent located within the limits of the territorial sea of the United States. § 802.212 Covered real estate transaction. The term covered real estate transaction means: (a) Other than an excepted real estate transaction, any purchase or lease by, or concession to, a foreign person of covered real estate, that affords the foreign person at least three of the property rights under § 802.233; (b) Other than an excepted real estate transaction, any purchase or lease by, or concession to, a foreign person of covered real estate, that, through a subsequent change in the rights that a foreign person has with respect to that covered real estate, results in the foreign person having at least three of the property rights under § 802.233; or (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 as it relates to real estate transactions. Note 1 to § 802.212: Any transaction, transfer, agreement, or arrangement described in this section that arises pursuant to a bankruptcy proceeding or other form of default on debt is a covered real estate transaction. See also § 802.303 for the treatment of certain lending transactions. E:\FR\FM\17JAR3.SGM 17JAR3 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations § 802.213 Entity. The term entity means any branch, partnership, group or sub-group, association, estate, trust, corporation or division of a corporation, or organization (whether or not organized under the laws of any State or foreign state); assets (whether or not organized as a separate legal entity) operated by any one of the foregoing as a business undertaking in a particular location or for particular products or services; and any government (including a foreign national or subnational government, the U.S. Government, a subnational government within the United States, and any of their respective departments, agencies, or instrumentalities). § 802.214 state. Excepted real estate foreign The term excepted real estate foreign state means, until February 13, 2022, a foreign state that meets the criteria in paragraph (a) of this section, and beginning on February 13, 2022, a foreign state that meets both the criteria in paragraphs (a) and (b) of this section: (a) Is identified by the Committee as an eligible foreign state and (b) Is a foreign state for which the Committee has made a determination under § 802.1001(a). Note 1 to § 802.214: The name of each foreign state identified by the Committee as an eligible foreign state will be available at the Committee’s section of the Department of the Treasury website. See § 802.1001(c) regarding the publication of a notice in the Federal Register of a determination under § 802.1001(a). The list of excepted real estate foreign states will also be available at the Committee’s section of the Department of the Treasury website. lotter on DSKBCFDHB2PROD with RULES3 § 802.215 Excepted real estate investor. (a) The term excepted real estate investor means a foreign person who is, as of the completion date of the transaction and subject to paragraphs (c) and (d) of this section: (1) A foreign national who is a national of one or more excepted real estate foreign states and is not also a national of any foreign state that is not an excepted real estate foreign state; (2) A foreign government of an excepted real estate foreign state; or (3) A foreign entity that meets each of the following conditions with respect to itself and each of its parents (if any): (i) Such entity is organized under the laws of an excepted real estate foreign state or in the United States; (ii) Such entity has its principal place of business in an excepted real estate foreign state or in the United States; (iii) Seventy-five percent or more of the members and 75 percent or more of VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 the observers of the board of directors or equivalent governing body of such entity are: (A) U.S. nationals; or (B) Nationals of one or more excepted real estate foreign states who are not also nationals of any foreign state that is not an excepted real estate foreign state; (iv) Any foreign person that individually, and each foreign person that is part of a group of foreign persons that in the aggregate, holds 10 percent or more of the outstanding voting interest of such entity; holds the right to 10 percent or more of the profits of such entity; holds the right in the event of dissolution to 10 percent or more of the assets of such entity; or otherwise could exercise control over such entity, is: (A) A foreign national who is a national of one or more excepted real estate foreign states and is not also a national of any foreign state that is not an excepted real estate foreign state; (B) A foreign government of an excepted real estate foreign state; or (C) A foreign entity that is organized under the laws of an excepted real estate foreign state and has its principal place of business in an excepted real estate foreign state or in the United States; and (v) The minimum excepted ownership of such entity is held, individually or in the aggregate, by one or more persons each of whom is: (A) Not a foreign person; (B) A foreign national who is a national of one or more excepted real estate foreign states and is not also a national of any foreign state that is not an excepted real estate foreign state; (C) A foreign government of an excepted real estate foreign state; or (D) A foreign entity that is organized under the laws of an excepted real estate foreign state and has its principal place of business in an excepted real estate foreign state or in the United States. (b) For purposes of paragraph (a)(3)(iv) of this section, foreign persons who are related, have formal or informal arrangements to act in concert, or are agencies or instrumentalities of, or controlled by, the national or subnational governments of a single foreign state are considered part of a group of foreign persons and their individual ownerships are aggregated. (c) Notwithstanding paragraph (a) of this section, a foreign person is not an excepted real estate investor with respect to a transaction if: (1) In the five years prior to the completion date of the transaction the foreign person, any of its parents, or any entity of which it is a parent: (i) Has received written notice from the Committee that it has submitted a PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 3169 material misstatement or omission in a notice or declaration or made a false certification under this part or part 800 or 801 of this chapter; (ii) Has received written notice from the Committee that it has violated a material provision of a mitigation agreement entered into with, material condition imposed by, or an order issued by, the Committee or a lead agency under section 721(l); (iii) Has been subject to action by the President under section 721(d); (iv) Has: (A) Received a written Finding of Violation or Penalty Notice imposing a civil monetary penalty from the Department of the Treasury, Office of Foreign Assets Control (OFAC); or (B) Entered into a settlement agreement with OFAC with respect to apparent violations of U.S. sanctions laws administered by OFAC, including the International Emergency Economic Powers Act, the Trading With the Enemy Act, the Foreign Narcotics Kingpin Designation Act, each as amended, or of any executive order, regulation, order, directive, or license issued pursuant thereto; (v) Has received a written notice of debarment from the Department of State, Directorate of Defense Trade Controls, as described in 22 CFR parts 127 and 128; (vi) Has been a respondent or party in a final order, including a settlement order, issued by the Department of Commerce, Bureau of Industry and Security (BIS) regarding violations of U.S. export control laws administered by BIS, including the Export Control Reform Act of 2018 (50 U.S.C. 4801 et seq.), the Export Administration Regulations (15 CFR parts 730–774), or of any executive order, regulation, order, directive, or license issued pursuant thereto; (vii) Has received a final decision from the Department of Energy, National Nuclear Security Administration imposing a civil penalty with respect to a violation of section 57 b. of the Atomic Energy Act of 1954, as implemented under 10 CFR part 810; or (viii) Has been convicted of, or has entered into a deferred prosecution agreement or non-prosecution agreement with the Department of Justice with respect to, any felony in any jurisdiction within the United States; or (2) The foreign person, any of its parents, or any entity of which it is a parent is, on the date on which the parties to the transaction first execute a binding written agreement, or other binding document, establishing the material terms of the transaction, listed E:\FR\FM\17JAR3.SGM 17JAR3 3170 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations on either the BIS Unverified List or Entity List in 15 CFR part 744. (d) Irrespective of whether the foreign person satisfies the criteria in paragraph (a)(1) or (2), (a)(3)(i) through (iii), or (c)(1)(i) through (iii) of this section as of the completion date, if at any time during the three-year period following the completion date the foreign person no longer meets all the criteria set forth in paragraph (a)(1) or (2), (a)(3)(i) through (iii), or (c)(1)(i) through (iii) of this section, the foreign person is not an excepted real estate investor with respect to the transaction from the completion date onward. This paragraph does not apply when an excepted real estate investor no longer meets any of the criteria solely due to a rescission of a determination under § 802.1001(b) or if the relevant foreign state otherwise ceases to be an excepted real estate foreign state. (e) A foreign person may waive its status as an excepted real estate investor with respect to a transaction at any time by submitting a declaration under § 802.401 or filing a notice under § 802.501 regarding the transaction in which it explicitly waives such status. In such case, the foreign person will be deemed not to be an excepted real estate investor with respect to the transaction, and the relevant provisions of subpart D or E will apply. Note 1 to § 802.215: See § 802.501(c)(2) regarding an agency notice where a foreign person is not an excepted real estate investor solely due to paragraph (d) of this section. lotter on DSKBCFDHB2PROD with RULES3 § 802.216 Excepted real estate transaction. The term excepted real estate transaction means the following: (a) A purchase or lease by, or concession to, an excepted real estate investor of covered real estate, or a change in rights of an excepted real estate investor with respect to covered real estate. (b) A covered transaction as defined in part 800 of this chapter that includes the purchase, lease, or concession of covered real estate. (c) The purchase, lease, or concession of covered real estate that is within an urbanized area or urban cluster, except for real estate that is subject to paragraph (a) or (b)(1) of § 802.211. (d) The purchase, lease, or concession of covered real estate that is a single housing unit, including fixtures and adjacent land to the extent that such fixtures and land are incidental to the use of the real estate as a single housing unit. (e) The lease by or a concession to a foreign person of covered real estate under paragraph (a) of § 802.211 if: VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 (1) The foreign person is a foreign air carrier, as that term is defined in 49 U.S.C. 40102(a)(21), for whom the Department of Homeland Security, Transportation Security Administration has accepted a security program under 49 CFR 1546.105, but only to the extent that the lease or concession is in furtherance of its activities as a foreign air carrier; or (2) According to the terms of the lease or concession, the covered real estate may be used only for the purpose of engaging in the retail sale of consumer goods or services to the public. (f) The purchase or lease by, or concession to, a foreign person of commercial space in a multi-unit building that is covered real estate, if, upon the completion of the transaction: (1) The foreign person and its affiliates do not, in the aggregate, hold, lease, or have a concession with respect to commercial space in such building that exceeds 10 percent of the total square footage of the commercial space of such building; and (2) The foreign person and its affiliates (each counted separately) do not represent more than 10 percent of the total number of tenants based on the number of ownership, lease and concession arrangements for commercial space in the building. (g) The purchase or lease by, or a concession to, a foreign person of covered real estate either: (1) Owned by an Alaska ‘‘Native village,’’ ‘‘Native group,’’ or ‘‘Native Corporation’’ as those terms are defined in the Alaska Native Claims Settlement Act at 43 U.S.C. 1602; or (2) Held in trust by the United States for American Indians, Indian tribes, Alaska Natives, or any of the entities set forth in paragraph (g)(1) of this section. (h) Examples: (1) Example 1. Corporation A, a foreign person, proposes to purchase all of the shares of Corporation X, a U.S. business. Corporation X is in the business of owning and leasing real estate, including real estate properties that are in close proximity to military installations identified in part 1 and part 2 of appendix A to this part. As the sole owner of Corporation X, Corporation A will have control over Corporation X. The proposed transaction is not a covered real estate transaction but is a covered transaction under part 800 of this chapter. (2) Example 2. Same facts as the example in paragraph (h)(1) of this section. After the transaction contemplated in Example 1 of this section is completed, Corporation X leases from another person a tract of land that is in close proximity to a military installation identified in part 1 of appendix A to this part. Assuming no other relevant facts, the proposed transaction is a covered real estate transaction but only with respect to the new lease. PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 (3) Example 3. Corporation A, a foreign person, seeks to purchase from Corporation X an empty warehouse located in close proximity to a military installation identified in part 2 of appendix A to this part. Assuming no other relevant facts, the purchase of the covered real estate is not a covered transaction subject to part 800 of this chapter because Corporation A has not acquired a U.S. business, and the purchase is a covered real estate transaction. (4) Example 4. Same facts as the example in paragraph (h)(3) of this section, except that, in addition to the proposed purchase of Corporation X’s empty warehouse, Corporation A would also acquire from Corporation X the personnel, customer list, equipment, and inventory management software used to operate the warehouse. Under these facts, Corporation A is acquiring a U.S. business, and the proposed transaction is a covered transaction subject to part 800 of this chapter and therefore not a covered real estate transaction. (5) Example 5. Corporation A, a foreign person, purchases covered real estate that is undeveloped and in close proximity to a military installation identified in part 1 of appendix A to this part. Corporation A, through a newly incorporated U.S. subsidiary, intends to use the covered real estate to set up a manufacturing facility. Assuming no other relevant facts, Corporation A has not acquired a U.S. business, the purchase of the covered real estate is not a covered transaction subject to part 800 of this chapter, and Corporation A’s purchase of the covered real estate is a covered real estate transaction. (6) Example 6. A foreign person purchases real estate. The nearest military installation is one that is identified in part 2 of appendix A to this part and is 40 miles away (i.e., in the extended range) from the real estate. The real estate is located in a statistical geographic area with a population of 125,000 individuals. Assuming no other relevant facts, the transaction is not a covered real estate transaction because the covered real estate is located in an urbanized area. (7) Example 7. Same facts as the example in paragraph (h)(6) of this section, except that the covered real estate is not located in an urbanized area or an urban cluster. Assuming no other relevant facts, the real estate transaction is a covered real estate transaction. (8) Example 8. A foreign person purchases real estate that is 0.25 miles from a military installation identified in part 1 of appendix A to this part. The real estate is located in an urbanized area. Assuming no other relevant facts, the real estate transaction is a covered real estate transaction because it is in close proximity to a military installation listed in part 1 of appendix A to this part. (9) Example 9. A foreign person purchases a single housing unit, including the one acre of land surrounding it, within 0.5 miles from a military installation identified in part 1 of appendix A to this part. Each home in the neighborhood sits on a separate lot, each of which is approximately one acre in size. The acre of land surrounding the housing unit is incidental to use of the land as a single housing unit, and the real estate transaction E:\FR\FM\17JAR3.SGM 17JAR3 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations therefore is not a covered real estate transaction. (10) Example 10. Same facts as the example in paragraph (h)(9) of this section, except that the foreign person also purchases an adjacent five acres of undeveloped land a year later. Assuming no other relevant facts, the purchase of the adjacent land is a covered real estate transaction. (11) Example 11. A foreign person leases five percent of the total commercial space in a building located 0.5 miles from a military installation identified in part 1 of appendix A to this part. There are nine other tenants that have leases for commercial space with the building owner. Assuming no other relevant facts, the transaction is a not a covered real estate transaction. Note 1 to § 802.216: With respect to paragraph (d) of this section, for purposes herein, fixtures and land may be considered incidental if the size and nature of such is common for similar single housing units in the locality in which the unit is located. § 802.217 Extended range. The term extended range means, with respect to any military installation identified in § 802.227(h), (k), or (m), as listed in part 2 of appendix A to this part, the area that extends 99 miles outward from the outer boundary of close proximity to such military installation, but, where applicable, not exceeding the outer limit of the territorial sea of the United States. § 802.218 Foreign entity. (a) The term foreign entity means any branch, partnership, group or sub-group, association, estate, trust, corporation or division of a corporation, or organization organized under the laws of a foreign state if either its principal place of business is outside the United States or its equity securities are primarily traded on one or more foreign exchanges. (b) Notwithstanding paragraph (a) of this section, any branch, partnership, group or sub-group, association, estate, trust, corporation or division of a corporation, or organization that can demonstrate that a majority of the equity interest in such entity is ultimately owned by U.S. nationals is not a foreign entity. lotter on DSKBCFDHB2PROD with RULES3 § 802.219 Foreign government. The term foreign government means any government or body exercising governmental functions, other than the U.S. Government or a subnational government of the United States. The term includes, but is not limited to, national and subnational governments, including their respective departments, agencies, and instrumentalities. VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 § 802.220 Foreign national. The term foreign national means any individual other than a U.S. national. § 802.221 Foreign person. (a) The term foreign person means: (1) Any foreign national, foreign government, or foreign entity; or (2) Any entity over which control is exercised or exercisable by a foreign national, foreign government, or foreign entity. (b) Any entity over which control is exercised or exercisable by a foreign person is a foreign person. (c) Examples: (1) Example 1. Corporation A is organized under the laws of a foreign state and is engaged in business only outside the United States. All of its shares are held by Corporation X, which solely controls Corporation A. Corporation X is organized in the United States and is wholly owned and controlled by U.S. nationals. Assuming no other relevant facts, Corporation A, although organized and operating only outside the United States, is not a foreign entity due to § 802.218(b) and is not a foreign person. (2) Example 2. Same facts as the first sentence of the example in paragraph (c)(1) of this section. The government of the foreign state under whose laws Corporation A is organized exercises control over Corporation A because a law establishing Corporation A gives the foreign state the right to appoint Corporation A’s board members. Corporation A is a foreign person. (3) Example 3. Corporation A is organized in the United States, is engaged in interstate commerce in the United States, and is controlled by Corporation X. Corporation X is organized under the laws of a foreign state, its principal place of business is located outside the United States, and 50 percent of its shares are held by foreign nationals and 50 percent of its shares are held by U.S. nationals. Both Corporation A and Corporation X are foreign persons. Corporation A is also a U.S. business. (4) Example 4. Corporation A is organized under the laws of a foreign state and is owned and controlled by a foreign national. A branch of Corporation A engages in interstate commerce in the United States. Corporation A (including its branch) is a foreign person. The branch is also a U.S. business. (5) Example 5. Corporation A is organized under the laws of a foreign state and its principal place of business is located outside the United States. Forty-five percent of the equity interest in Corporation A is owned in equal shares by numerous unrelated foreign investors, none of whom has control. The foreign investors have no formal or informal arrangement with any other holder of equity interest in Corporation A to act in concert regarding Corporation A. Corporation A can demonstrate that the remainder of the equity interest in Corporation A is ultimately held by U.S. nationals. Assuming no other relevant facts, Corporation A is not a foreign entity or foreign person. (6) Example 6. Same facts as the example in paragraph (c)(5) of this section, except that PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 3171 one of the foreign investors, a foreign national, controls Corporation A. Assuming no other relevant facts, Corporation A is not a foreign entity due to § 802.218(b), but it is a foreign person under paragraph (a)(2) of this section because it is controlled by a foreign national. § 802.222 Hold. The terms hold(s) and holding mean legal or beneficial ownership, whether direct or indirect, whether through fiduciaries, agents, or other means. § 802.223 Housing unit. The term housing unit means a single family house, townhome, mobile home or trailer, apartment, group of rooms, or single room that is occupied as a separate living quarters, or, if vacant, is intended for occupancy as a separate living quarters. § 802.224 Investment fund. The term investment fund means any entity that is an ‘‘investment company,’’ as defined in section 3(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.), or would be an ‘‘investment company’’ but for one or more of the exemptions provided in section 3(b) or 3(c) thereunder. § 802.225 Lead agency. The term lead agency means the Department of the Treasury and any other agency designated by the Chairperson of the Committee to have primary responsibility, on behalf of the Committee, for the specific activity for which the Chairperson designates it as a lead agency, including all or a portion of an assessment, a review, an investigation, or the negotiation or monitoring of a mitigation agreement or condition. § 802.226 Lease. (a) The term lease means an arrangement conveying a possessory interest in real estate, short of ownership, to a person for a specified time and in exchange for consideration. This term includes subleases and assignments in whole or part. (b) Examples: (1) Example 1. Foreign person A enters into an arrangement with a neighbor that allows the foreign person to use a private road running across the neighbor’s land. The road will remain owned by the neighbor following the arrangement. The neighbor will also retain physical possession of his land despite the foreign person having permission to traverse the land while using the road. The arrangement does not convey a possessory interest in real estate. Assuming no other relevant facts, the foreign person has not entered into a lease. (2) Example 2. Same facts as the example in paragraph (b)(1) of this section, except that E:\FR\FM\17JAR3.SGM 17JAR3 3172 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations the foreign person’s arrangement with the neighbor gives the foreign person the exclusive right to occupy a portion of the neighbor’s land and attach fixtures to the surface, in exchange for a fee for a specified period of time. The foreign person can unilaterally adjust, remove, and make other changes to the fixtures. The foreign person has entered into a lease. Note 1 to § 802.226: See § 800.249(a)(5) for certain long-term leases and concessions that could be subject to part 800 of this chapter. lotter on DSKBCFDHB2PROD with RULES3 § 802.227 Military installation. The term military installation means any site that meets the following category descriptions, as identified in the list at appendix A to this part: (a) Active Air Force ballistic missile fields; (b) Air Force bases administering active Air Force ballistic missile fields; (c) Air Force bases and major annexes thereof containing a unit from the Air Force Air Combat Command; (d) Air Force bases and major annexes thereof containing an Air Force research laboratory or test unit and associated sites; (e) Air Force bases and major annexes thereof containing a unit of the North American Aerospace Defense Command and its regions; (f) Air Force bases and Air Force stations and major annexes thereof containing satellite, telemetry, tracking, or commanding systems; (g) Army bases, ammunition plants, centers of excellence and research laboratories and major annexes thereof, excluding depots, arsenals, and airfields that are not collocated with an Army installation included in this section; (h) Army combat training centers located in the continental United States; (i) Headquarters of the Office of the Secretary of Defense and Defense Advanced Research Projects Agency and major offices and annexes thereof; (j) Long range radar sites and major annexes thereof in any of the following states: Alaska, North Dakota, California, or Massachusetts; (k) Major range and test facility base activities as defined in 10 U.S.C. 196; (l) Marine Corps bases and air stations and major annexes thereof, excluding detachments, installations, logistics battalions, recruit depots, and support facilities; (m) Military ranges as defined in 10 U.S.C. 101(e)(1) owned by the Navy or Air Force, or joint forces training centers that are located in any of the following states: Oregon, Nevada, Idaho, Wisconsin, Mississippi, North Carolina, or Florida; (n) Naval bases and air stations containing squadrons and supporting VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 commands of the Submarine Force Atlantic or Submarine Force Pacific and major offices thereof; (o) Naval surface, air, and undersea warfare centers and research laboratories and major annexes thereof; and (p) Navy off-shore range complexes and off-shore operating areas. § 802.228 Minimum excepted ownership. The term minimum excepted ownership means: (a) With respect to an entity whose equity securities are primarily traded on an exchange in an excepted real estate foreign state or the United States, a majority of its voting interest, the right to a majority of its profits, and the right in the event of dissolution to a majority of its assets; and (b) With respect to an entity whose equity securities are not primarily traded on an exchange in an excepted real estate foreign state or the United States, 80 percent or more of its voting interest, the right to 80 percent or more of its profits, and the right in the event of dissolution to 80 percent or more of its assets. § 802.229 Parent. (a) The term parent means, with respect to an entity: (1) A person who or which directly or indirectly: (i) Holds or will hold at least 50 percent of the outstanding voting interest in the entity; or (ii) Holds or will hold the right to at least 50 percent of the profits of the entity, or has or will have the right in the event of dissolution to at least 50 percent of the assets of the entity; or (2) The general partner, managing member, or equivalent of the entity. (b) Any entity that meets the conditions of paragraph (a)(1) or (2) of this section with respect to another entity (i.e., the intermediate parent) is also a parent of any other entity of which the intermediate parent is a parent. (c) Examples: (1) Example 1. Corporation P holds 50 percent of the voting interest in Corporations R and S; Corporation R holds 40 percent of the voting interest in Corporation X; and Corporation S holds 50 percent of the voting interest in Corporation Y, which in turn holds 50 percent of the voting interest in Corporation Z. Corporation P is a parent of Corporations R, S, Y, and Z, but not of Corporation X. Corporation S is a parent of Corporation Y and Z, and Corporation Y is a parent of Corporation Z. (2) Example 2. Corporation A holds warrants which when exercised will entitle it to vote 50 percent of the outstanding shares of Corporation B. Corporation A is a parent of Corporation B. PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 (3) Example 3. Investor A holds 60 percent of the outstanding voting interest in Corporation B. Investor C holds the right to 80 percent of the profits of Corporation B. Each of Investor A and Investor C is a parent of Corporation B. § 802.230 Party to a transaction. (a) The term party to a transaction means: (1) In the case of a purchase, the person acquiring the ownership interest, the person from whom such ownership interest is acquired, and the entity whose ownership interest is being acquired, without regard to any person providing brokerage or underwriting services for the transaction; (2) In the case of a lease, the person acquiring the possessory interest, and the person from whom such possessory interest is acquired; (3) In the case of a concession, the person receiving the right to use the covered real estate, and the U.S. public entity; (4) In the case of a change in rights that a person has with respect to covered real estate as a result of a purchase, lease, or concession, the person whose rights change as a result of the transaction, and the person conveying those rights; and (5) In the case of any other transaction, transfer, agreement, or arrangement, the structure of which is designed or intended to evade or circumvent the application of section 721, any person that participates in such transaction, transfer, agreement, or arrangement. (6) In all cases, each party that submitted a declaration or notice to the Committee regarding a transaction. (b) For purposes of section 721(l), the term party to a transaction includes any affiliate of any party described in paragraph (a) of this section that the Committee, or a lead agency acting on behalf of the Committee, determines is relevant to mitigating a risk to the national security of the United States. § 802.231 Person. The term person means any individual or entity. § 802.232 Principal place of business. (a) The term principal place of business means, subject to paragraph (b) of this section, the primary location where an entity’s management directs, controls, or coordinates the entity’s activities, or, in the case of an investment fund, where the fund’s activities and investments are primarily directed, controlled, or coordinated by or on behalf of the general partner, managing member, or equivalent. E:\FR\FM\17JAR3.SGM 17JAR3 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations (b) If the location determined under paragraph (a) of this section is in the United States and the entity has represented to the U.S. Government or a subnational government of the United States or any foreign government, in the most recent submission or filing to such government (other than a submission or filing to the Committee) in which the entity has identified its principal place of business, principal office and place of business, address of principal executive offices, address of headquarters, or equivalent, that any of the foregoing is outside the United States, then the location identified in such submission or filing is deemed for purposes of this definition to be the entity’s principal place of business unless the entity can demonstrate that such location has changed to the United States since such submission or filing. § 802.233 Property right. (a) The term property right means, with respect to real estate, any of the following rights or abilities, whether or not exercised, whether or not shared concurrently with any other person, and whether or not the underlying real estate is subject to an easement or other encumbrance: (1) To physically access the real estate; (2) To exclude others from physically accessing the real estate; (3) To improve or develop the real estate; or (4) To attach fixed or immovable structures or objects to the real estate. (b) Examples: lotter on DSKBCFDHB2PROD with RULES3 (1) Example 1. Corporation A, a foreign person, enters into a lease of real estate. Although at least one other person shares concurrently with Corporation A the right to access the property, Corporation A retains the right to physically exclude others from access that would interfere with its rights under the lease. Under the lease, Corporation A has the right to exclude others from physically accessing the real estate, and therefore affords the foreign person a property right. (2) Example 2. Corporation A, a foreign person, enters into a lease of real estate that allows Corporation A to develop the real estate. The exercise of the right to develop the real estate is subject to Corporation A obtaining the appropriate regulatory permits. Notwithstanding the fact that Corporation A has not fully exercised its lease right pending the issuance of the permits, Corporation A is a party to lease that affords it a property right for purposes of this part. § 802.234 Purchase. (a) The term purchase means an arrangement conveying an ownership interest in real estate to a person in exchange for consideration. (b) Example: Person A, a foreign person, acquires covered real estate VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 from Person B, a U.S. national, in exchange for land and services. Person A has purchased the covered real estate because the arrangement was predicated on consideration in the form of land and services. § 802.235 Real estate. The term real estate means any land, including subsurface and submerged, or structure attached to land, including any building or any part thereof, that is located in the United States. § 802.236 Section 721. The term section 721 means section 721 of title VII of the Defense Production Act of 1950, as amended (50 U.S.C. 4565). § 802.237 Transaction. The term transaction means any purchase or lease by, or concession to, a person of real estate, whether proposed or completed. § 802.238 United States. The term United States or U.S. means the United States of America, the States of the United States, the District of Columbia, and any commonwealth, territory, dependency, or possession of the United States, or any subdivision of the foregoing, and includes the territorial sea of the United States. For purposes of these regulations and their examples in this part, an entity organized under the laws of the United States of America, one of the States, the District of Columbia, or a commonwealth, territory, dependency, or possession of the United States is an entity organized ‘‘in the United States.’’ § 802.239 Urban cluster. The term urban cluster means a statistical geographic area as identified in the most recent U.S. Census consisting of a densely settled core created from census tracts or blocks and contiguous qualifying territory that together have at least 2,500 individuals but fewer than 50,000 individuals. § 802.240 Urbanized area. The term urbanized area means a statistical geographic area as identified in the most recent U.S. Census consisting of a densely settled core created from census tracts or blocks and contiguous qualifying territory that together have a minimum population of at least 50,000 individuals. § 802.241 U.S. business. The term U.S. business means any entity, irrespective of the nationality of the persons that control it, engaged in interstate commerce in the United States. PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 3173 Note 1 to § 802.241: See examples to definition in § 800.252. § 802.242 U.S. national. The term U.S. national means an individual who is a U.S. citizen or an individual who, although not a U.S. citizen, owes permanent allegiance to the United States. § 802.243 U.S. public entity. The term U.S. public entity means the U.S. Government, a subnational government of the United States, or any other body exercising governmental functions of the United States, including air and maritime port authorities. The term includes, but is not limited to, the respective departments, agencies, and instrumentalities of the U.S. Government and the subnational governments of the United States. § 802.244 Voting interest. The term voting interest means any interest in an entity that entitles the owner or holder of that interest to vote for the election of directors of the entity (or, with respect to unincorporated entities, individuals exercising similar functions) or to vote on other matters affecting the entity. Subpart C—Coverage § 802.301 Transactions that are covered real estate transactions. Transactions that are covered real estate transactions include: (a) A transaction that meets the criteria of § 802.212, including where a foreign person (other than an excepted real estate investor) enters into a purchase or lease of, or obtains a concession to, covered real estate either directly or indirectly. (See the examples in paragraphs (h)(1) and (2) of this section.) (b) A purchase by a foreign person (other than an excepted real estate investor) of less than full ownership of covered real estate that nevertheless affords the foreign person at least three property rights with respect to the covered real estate. (See the example in paragraph (h)(3) of this section.) (c) A purchase or lease by, or concession to, a foreign person (other than an excepted real estate investor) of real estate, a portion of which is covered real estate with respect to which the foreign person has at least three property rights. (See the example in paragraph (h)(4) of this section.) (d) A purchase or lease by, or concession to, a foreign person (other than an excepted real estate investor) of a portion of covered real estate with respect to which the foreign person has at least three property rights. (See the E:\FR\FM\17JAR3.SGM 17JAR3 3174 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations lotter on DSKBCFDHB2PROD with RULES3 example in paragraph (h)(5) of this section.) (e) A purchase, lease, or assignment of a concession, of covered real estate that meets the criteria of § 802.212 by one foreign person (other than an excepted real estate investor) from another foreign person. (See the example in paragraph (h)(6) of this section.) (f) A purchase or lease by, or concession to, a foreign person (other than an excepted real estate investor) of covered real estate, that, through a subsequent change in the rights that a foreign person has with respect to covered real estate, results in the foreign person having at least three property rights. (See the example in paragraph (h)(7) of this section.) (g) A transaction the structure of which is designed or intended to evade or circumvent the application of this part. (h) Examples: (1) Example 1. Corporation A, a foreign person, acquires Corporation X, a U.S. business. As a result, Corporation X is a foreign person. Subsequently, Corporation X purchases real estate that is in close proximity to a military installation identified in part 1 of appendix A to this part and obtains all of the property rights with respect to such real estate. Assuming no other relevant facts, the transaction is a covered real estate transaction. (2) Example 2. Corporation A purchases covered real estate that is undeveloped land. Corporation A’s only asset in the United States is the covered real estate, and Corporation A is not itself nor does it own a U.S. business. In a subsequent transaction, Corporation B, a foreign person, purchases 100 percent of the shares of Corporation A. Assuming no other relevant facts, the subsequent transaction as an indirect purchase of real estate is a covered real estate transaction. (3) Example 3. Corporation A, a foreign person, together with Corporation B, a U.S. business, purchases real estate that is in close proximity to a military installation identified in part 2 of appendix A to this part. Neither party has full ownership; rather, the title to the real estate is held by the two parties jointly. Corporation A is afforded at least three property rights as a result of the transaction. Assuming no other relevant facts, the transaction is a covered real estate transaction. (4) Example 4. Corporation A, a foreign person, purchases real estate. Half of such real estate is located in close proximity to a military installation identified in part 1 of appendix A to this part of and is therefore covered real estate. The other half of the real estate purchased by Corporation A is not located in close proximity to any such military installation. Assuming no other relevant facts, Corporation A’s purchase is a covered real estate transaction. (5) Example 5. Corporation A, a U.S. business, purchases covered real estate that is entirely located in close proximity to a VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 military installation identified in part 2 of appendix A to this part. Corporation B, a foreign person, leases from Corporation A a part of that real estate. Corporation B is entitled to at least three property rights with respect to the real estate as a result of the transaction. Assuming no other relevant facts, Corporation B’s lease is a covered real estate transaction. (6) Example 6. Corporation A, a foreign person, purchases covered real estate and is afforded three property rights with respect to the covered real estate. In a subsequent transaction, Corporation B, another foreign person, leases the covered real estate from Corporation A, and is also afforded three property rights. Assuming no other relevant facts, each transaction is a covered real estate transaction. (7) Example 7. Corporation A, a foreign person, leases from Person B covered real estate, and is afforded two property rights. Person B subsequently provides Corporation A an additional property right in connection with the lease. Assuming no other relevant facts, the lease is a covered real estate transaction because the subsequent change in rights results in the foreign person having at least three property rights. § 802.302 Transactions that are not covered real estate transactions. Transactions that are not covered real estate transactions include: (a) A transaction that meets the definition of excepted real estate transaction in § 802.216. (b) A purchase or lease by, or concession to, a foreign person of covered real estate, or a subsequent change in rights, that does not afford or result in the foreign person having at least three of the property rights with respect to the covered real estate. (c) An acquisition of securities by a person acting as a securities underwriter, in the ordinary course of business and in the process of underwriting. (d) An acquisition pursuant to a condition in a contract of insurance relating to fidelity, surety, or casualty obligations if the contract was made by an insurer in the ordinary course of business. § 802.303 Lending transactions. (a) The extension of a mortgage, loan, or similar financing arrangement by a foreign person to another person for the purpose of the purchase, lease, or concession of covered real estate, regardless of whether accompanied by the creation in favor of the foreign person of a secured interest in the covered real estate, shall not, by itself, constitute a covered real estate transaction. (1) The Committee will accept notices or declarations concerning a mortgage, loan, or similar financing arrangement that does not, by itself, constitute a PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 covered real estate transaction only at the time that, because of imminent or actual default or other condition, there is a significant possibility that a purchase or lease by, concession to, or a change in rights involving a foreign person may result from the default or other condition and that would constitute a covered real estate transaction. (2) Where the Committee accepts a notice or declaration concerning a mortgage, loan, or similar financing arrangement under paragraph (a)(1) of this section, and a party to the transaction is a foreign person that makes mortgages or loans in the ordinary course of business, the Committee will take into account whether the foreign person has made any arrangements to transfer the ownership and property rights over the covered real estate to U.S. nationals or excepted real estate investors for purposes of determining whether such mortgage, loan, or financing arrangement constitutes a covered real estate transaction. (b) Notwithstanding paragraph (a) of this section, a mortgage, loan, or similar financing arrangement through which a foreign person acquires property rights over covered real estate may constitute a covered real estate transaction to the extent that the arrangement would constitute a purchase, lease, or concession under this part. (c) Example: Corporation A, a foreign bank, makes a secured loan to Corporation B in order for Corporation B to purchase a building that constitutes covered real estate. The collateral for the loan is the building that Corporation B is purchasing, and upon default, Corporation A would obtain an ownership interest and be afforded at least three property rights with respect to the building. Corporation B defaults on the loan. Assuming no other relevant facts, the Committee would accept a notice or declaration of the imminent default or default transferring ownership of the building to Corporation A, which would constitute a covered real estate transaction. § 802.304 Timing rule for a contingent equity interest. (a) For purposes of determining whether to include the rights that a holder of a contingent equity interest will acquire upon conversion of, or exercise of a right provided by, that interest in the Committee’s analysis of whether a notified transaction is a covered real estate transaction, the Committee will consider factors that include: E:\FR\FM\17JAR3.SGM 17JAR3 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations (1) The imminence of conversion or satisfaction of contingent conditions; (2) Whether conversion or satisfaction of contingent conditions depends on factors within the control of the acquiring party; and (3) Whether the amount of interest and the rights that would be acquired upon conversion or satisfaction of contingent conditions can be reasonably determined at the time of acquisition. (b) When the Committee, applying paragraph (a) of this section, determines that the rights that the holder will acquire upon conversion or satisfaction of contingent condition will not be included in the Committee’s analysis of whether a notified or submitted transaction is a covered real estate transaction, the Committee will disregard the contingent equity interest for purposes of that transaction except to the extent that they convey immediate rights to the holder with respect to the entity that issued the interest. Subpart D—Declarations lotter on DSKBCFDHB2PROD with RULES3 § 802.401 Procedures for declarations. (a) A party or parties may submit a voluntary declaration of a transaction by submitting electronically the information set out in § 802.402, including the certifications required thereunder, to the Staff Chairperson in accordance with the submission instructions on the Committee’s section of the Department of the Treasury website. (b) No communications other than those described in paragraph (a) of this section shall constitute the submission of a declaration for purposes of section 721. (c) Information and other documentary material submitted to the Committee under this section shall be considered to have been filed with the President or the President’s designee for purposes of section 721(c) and § 802.802. (d) Persons filing a declaration shall, during the time that the matter is pending before the Committee, promptly advise the Staff Chairperson of any material changes in plans, facts, or circumstances regarding the transaction, and any material change in information provided or required to be provided to the Committee under § 802.402. Unless the Committee rejects the declaration on the basis of such material changes in accordance with § 802.404(a)(2)(i), such changes shall become part of the declaration filed by such persons under this section, and the certification required under § 802.403(d) shall apply to such changes. VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 (e) Parties to a transaction that have filed with the Committee a written notice regarding a transaction under § 802.501 or § 800.501 or a declaration under § 800.403 may not submit to the Committee a declaration regarding the same transaction or a substantially similar transaction without the written approval of the Staff Chairperson. § 802.402 Contents of declarations. (a) The party or parties submitting a voluntary declaration of a transaction under § 802.401 shall provide the information set out in this section, which must be accurate and complete with respect to the party or parties filing the voluntary declaration and to the transaction. (See also paragraphs (d), (e), and (f) of this section.) (b) Other than as provided under paragraph (f) of this section, if fewer than all the parties to a transaction submit a declaration, the Committee may, at its discretion, request that the parties to the transaction file a written notice of the transaction under § 802.501, if the Staff Chairperson determines that the information provided by the submitting party or parties in the declaration is insufficient for the Committee to assess the transaction. (c) Subject to paragraph (e) of this section, a declaration submitted under § 802.401 shall describe or provide, as applicable: (1) The name of the foreign person(s) and the current holder(s) of interest in the real estate that are parties to, or, in applicable cases, the subject of the transaction, as well as the name, telephone number, and email address of the primary point of contact for each party. (2) The following information regarding the transaction in question: (i) A brief description of the rationale for and nature of the transaction, including its structure (e.g., purchase, lease, or concession) and term, whether the foreign person is acquiring a collection of assets or interest in an entity, and whether it is part of a larger project undertaken by the foreign person; (ii) The total transaction value in U.S. dollars; (iii) The status of the transaction, including the actual or expected completion date of the transaction; (iv) All sources of financing for the transaction and any real estate agents/ brokers involved; and (v) A copy of the definitive documentation of the transaction, such as a purchase, lease, or concession agreement, or if none exists, the document establishing the material PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 3175 terms of the transaction, which in the context of a transaction involving a covered port, must be signed and dated. (3) The following information regarding the real estate that is the subject of the transaction: (i) The location, by address and geographic coordinates in decimal degrees to the fourth digit, of the real estate that is the subject of the transaction; (ii) The name(s) of and distance(s) to any covered port, military installation, or any other facility or property of the U.S. Government as identified in this part and that is relevant to CFIUS jurisdiction given the location of the real estate. (iii) A description of the real estate that is the subject of the transaction including the approximate size (in acres, feet, or other appropriate measurement); nature of the real estate (e.g., zoning type and the major topographical or other features of the real estate); and current use of the real estate including any physical security measures. (iv) A description of the plans of the foreign person with respect to the real estate and structures that are or will be on the real estate; and (v) A description of any leases, licenses, permits, easements, encumbrances, or other grants or approvals associated with the real estate, including whether any involve the U.S. Government. (4) A statement as to whether the foreign person will have any of the following rights or abilities with respect to the real estate as a result of the transaction: (i) To physically access the real estate; (ii) To exclude others from physically accessing the real estate; (iii) To improve or develop the real estate; or (iv) To attach fixed or immovable structures or objects to the real estate. (5) The name of the ultimate parent of the foreign person. (6) The address and principal place of business of the foreign person and its ultimate parent. (7) A complete pre-transaction organizational chart (and posttransaction, if different) including, information that identifies the name, principal place of business, place of incorporation or other legal organization (for entities); nationality (for individuals); and ownership percentage (expressed in terms of both voting and economic interest, if different) for each of the following: (i) The immediate parent, the ultimate parent, and each intermediate parent, if E:\FR\FM\17JAR3.SGM 17JAR3 lotter on DSKBCFDHB2PROD with RULES3 3176 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations any, of each foreign person that is a party to the transaction; (ii) Where the ultimate parent is a private company, the ultimate owner(s) of such parent; and (iii) Where the ultimate parent is a public company, any shareholder with an interest of greater than five percent in such parent. (8) Information regarding all foreign government ownership in the foreign person’s ownership structure, including nationality and percentage of ownership, as well as any rights that a foreign government holds, directly or indirectly, with respect to the foreign person. (9) With respect to the foreign person that is party to the transaction and any of its parents, as applicable, a brief summary of their respective business activities. (10) A statement as to whether a party to the transaction is stipulating that the transaction is a covered real estate transaction and a description of the basis for the stipulation. (11) A statement as to whether any party to the transaction has been party to another transaction previously notified or submitted to the Committee, and the case number assigned by the Committee regarding such transaction(s). (12) A statement (including relevant jurisdiction and criminal case law number or legal citation) as to whether the holder of the real estate, the foreign person, any parent of the foreign person, or any person of which the foreign person is a parent, has been convicted in the last 10 years of a crime in any jurisdiction. (d) Each party submitting a declaration shall provide a certification of the information contained in the declaration consistent with § 802.202. A sample certification may be found on the Committee’s section of the Department of the Treasury website. (e) A party that offers a stipulation under paragraph (c)(10) of this section acknowledges that the Committee and the President are entitled to rely on such stipulation in determining whether the transaction is a covered real estate 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 real estate transaction. (f) In the case of a transaction where a U.S. public entity is a party to the VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 transaction and is not submitting a declaration, the other party or parties to the transaction shall provide the information set out in this section with respect to itself and, to the extent known or reasonably available to it, with respect to the U.S. public entity. § 802.403 period. Beginning of 30-day assessment (a) Upon receipt of a declaration submitted under § 802.401, the Staff Chairperson shall promptly inspect the declaration and shall promptly notify in writing all parties to a transaction that have submitted a declaration that: (1) The Staff Chairperson has accepted the declaration and circulated the declaration to the Committee, and the date on which the assessment described in paragraph (b) of this section begins; or (2) The Staff Chairperson has determined not to accept the declaration and circulate the declaration to the Committee because the declaration is incomplete, and an explanation of the material respects in which the declaration is incomplete. (b) A 30-day period for assessment of a transaction that is the subject of a declaration shall commence on the date on which the declaration is received by the Committee from the Staff Chairperson. Such period shall end no later than the thirtieth day after it has commenced, or if the thirtieth day is not a business day, no later than the next business day after the thirtieth day. (c) During the 30-day assessment period, the Staff Chairperson may invite the parties to a covered real estate transaction to attend a meeting with the Committee staff to discuss and clarify issues pertaining to the transaction. (d) If the Committee notifies the parties to a transaction that have submitted a declaration under § 802.401 that the Committee intends to conclude all action under section 721 with respect to that transaction, each party that has submitted additional information subsequent to the original declaration shall file a certification as described in § 802.202. A sample certification may be found on the Committee’s section of the Department of the Treasury website. (e) If a party fails to provide the certification required under paragraph (d) of this section, the Committee may, at its discretion, take any of the actions under § 802.405. § 802.404 Rejection, disposition, or withdrawal of declarations. (a) The Committee, acting through the Staff Chairperson, may: PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 (1) Reject any declaration that does not comply with § 802.402 and so inform the parties promptly in writing; (2) Reject any declaration at any time, and so inform the parties promptly in writing, if, after the declaration has been submitted and before the Committee has taken one of the actions specified in § 802.405: (i) There is a material change in the covered real estate transaction as to which a declaration has been submitted; or (ii) Information comes to light that contradicts material information provided in the declaration by the party (or parties); or (3) Reject any declaration at any time after the declaration has been submitted, and so inform the parties promptly in writing, if the party (or parties) that submitted the declaration does not provide follow-up information requested by the Staff Chairperson within two business days of the request, or within a longer time frame if the party (or parties) so request in writing and the Staff Chairperson grants that request in writing. (b) The Staff Chairperson shall notify the party (or parties) that submitted a declaration when the Committee has found that the transaction that is the subject of a declaration is not a covered real estate transaction. (c) Parties to a transaction that have submitted a declaration under § 802.401 may request in writing, at any time prior to the Committee taking action under § 802.405, that such declaration be withdrawn. Such request shall be directed to the Staff Chairperson and shall state the reasons why the request is being made and state whether the transaction that is the subject of the declaration is being fully and permanently abandoned. An official of the Department of the Treasury will promptly advise the parties to the transaction in writing of the Committee’s decision. (d) The Committee may not request or recommend that a declaration be withdrawn and refiled, except to permit parties to a covered real estate transaction to correct material errors or omissions, or describe material changes to the transaction, in the declaration submitted with respect to that covered real estate transaction. (e) A party (or parties) may not submit more than one declaration for the same or a substantially similar transaction without approval from the Staff Chairperson. Note 1 to § 802.404: See § 802.401(e) regarding the prohibition on submitting a declaration regarding the same transaction or a substantially similar transaction for which E:\FR\FM\17JAR3.SGM 17JAR3 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations a written notice has been filed, or a declaration submitted under part 800 of this chapter, without the approval of the Staff Chairperson. § 802.405 Committee actions. (a) Upon receiving a declaration submitted under § 802.401 with respect to a covered real estate transaction, the Committee may, at the discretion of the Committee: (1) If the Committee has reason to believe that the transaction may raise national security considerations, request that the parties to the transaction file a written notice under subpart E; (2) Inform the parties to the transaction that the Committee is not able to conclude action under section 721 with respect to the transaction on the basis of the declaration and that the parties may file a written notice under subpart E to seek written notification from the Committee that the Committee has concluded all action under section 721 with respect to the transaction; (3) Initiate a unilateral review of the transaction under § 802.501(c); or (4) Notify the parties in writing that the Committee has concluded all action under section 721 with respect to the transaction. (b) The Committee shall take action under paragraph (a) of this section within the time period set forth in § 802.403(b). Subpart E—Notices lotter on DSKBCFDHB2PROD with RULES3 § 802.501 Procedures for notices. (a) Except as otherwise prohibited under paragraph (j) of this section, 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 an electronic copy of the notice that includes, in English, the information set out in § 802.502, including the certification required under paragraph (h) of that section. For electronic submission instructions, see the Committee’s section of the Department of the Treasury website. (b) If the Committee determines that a transaction for which no voluntary notice has been filed under this part, and with respect to which the Committee has not informed the parties in writing that the Committee has concluded all action under section 721, may be a covered real estate transaction and may raise national security considerations, the Staff Chairperson, acting on the recommendation of the Committee, may request the parties to the transaction to provide to the Committee the information necessary to VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 determine whether the transaction is a covered real estate transaction, and if the Committee determines that the transaction is a covered real estate transaction, to file a notice of such covered real estate transaction under paragraph (a) of this section. (c) With respect to any covered real estate transaction: (1) Any member of the Committee, or his or her designee at or above the Under Secretary or equivalent level, may, subject to paragraph (c)(2) of this section, file an agency notice to the Committee through the Staff Chairperson regarding a transaction if: (i) That member has reason to believe that the transaction is a covered real estate transaction and may raise national security considerations and: (A) The Committee has not informed the parties to such transaction in writing that the Committee has concluded all action under section 721 with respect to such transaction; and (B) The President has not announced a decision not to exercise the President’s authority under section 721(d) with respect to such transaction; or (ii) The transaction is a covered real estate transaction and: (A) The Committee has informed the parties to such transaction in writing that the Committee has concluded all action under section 721 with respect to such transaction or determined that such transaction is not a covered real estate transaction, or the President has announced a decision not to exercise the President’s authority under section 721(d) with respect to such transaction; and (B) Either: (1) A party to such transaction submitted false or misleading material information to the Committee in connection with the Committee’s consideration of such transaction or omitted material information, including material documents, from information submitted to the Committee; or (2) A party to such transaction breaches a mitigation agreement or condition described in section 721(l)(3)(A), such breach is certified to the Committee by the lead department or agency monitoring and enforcing such agreement or condition as a material breach, and the Committee determines that there are no other adequate and appropriate remedies or enforcement tools available to address such breach. (2)(i) That is a transaction where a foreign person is not an excepted real estate investor due to the application of § 802.215(d), any member of the Committee, or his or her designee at or above the Under Secretary or equivalent PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 3177 level, may file an agency notice to the Committee through the Staff Chairperson regarding such transaction if: (A) That member has reason to believe that the transaction is a covered real estate transaction and may raise national security considerations; (B) The Committee has not informed the parties to such transaction in writing that the Committee has concluded all action under section 721 with respect to such transaction; and (C) The President has not announced a decision not to exercise the President’s authority under section 721(d) with respect to such transaction. (ii) No notice filed under this paragraph (c)(2) shall be made with respect to a transaction more than one year after the completion date of the transaction, unless the Chairperson of the Committee determines, in consultation with other members of the Committee, that because the foreign person no longer meets all the criteria set forth in § 802.215(a)(1) or (2), (a)(3)(i) through (iii), or (c)(1)(i) through (iii), the transaction may threaten to impair the national security of the United States, and in no event shall an agency notice under this paragraph be made with respect to such a transaction more than three years after the completion date of the transaction. (d) Notices filed under paragraph (c) of this section are deemed accepted upon their receipt by the Staff Chairperson. No agency notice under paragraph (c)(1) of this section shall be made with respect to a real estate transaction more than three years after the completion date of the transaction, unless the Chairperson of the Committee, in consultation with other members of the Committee, files such an agency notice. (e) No communications other than those described in paragraphs (a) and (c) of this section shall constitute the filing or submitting of a notice for purposes of section 721. (f) Upon receipt of the electronic copy of a notice filed under paragraph (a) of this section, including the certification required by § 802.502(h), the Staff Chairperson shall promptly inspect such notice for completeness. (g) Parties to a transaction are encouraged to consult with the Committee in advance of filing a notice and, in appropriate cases, to file with the Committee a draft notice or other appropriate documents to aid the Committee’s understanding of the transaction and to provide an opportunity for the Committee to request additional information to be included in the notice. Any such pre- E:\FR\FM\17JAR3.SGM 17JAR3 3178 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations notice consultation should take place, or any draft notice should be provided, at least five business days before the filing of a voluntary notice. All information and documentary material made available to the Committee under this paragraph shall be considered to have been filed with the President or the President’s designee for purposes of section 721(c) and § 802.802. (h) Information and other documentary material provided by any party to the Committee after the filing of a voluntary notice under this section shall be part of the notice, and shall be subject to the final certification required under § 802.502(l). (i) For any voluntarily submitted draft or formal written notice that includes a stipulation under section § 802.502(j) that a transaction is a covered real estate transaction, the Committee shall provide comments on the draft or formal written notice or accept the formal written notice of a covered real estate transaction not later than the date that is 10 business days after the date of submission of the draft or formal written notice. (j) No party to a transaction may file a notice under paragraph (a) of this section if the transaction has been the subject of a declaration submitted under subpart D and the Committee has not yet taken any action with respect to the transaction under § 802.405. lotter on DSKBCFDHB2PROD with RULES3 § 802.502 Contents of voluntary notices. (a) If a party or the parties to a transaction file a voluntary notice, they shall provide in detail the information set out in this section, which must be accurate and complete with respect to the party or parties filing the voluntary notice and to the transaction. (See also paragraph (k) of this section regarding U.S. public entities and paragraph (h) of this section and § 802.202 regarding certification requirements.) (b) A voluntary notice filed under § 802.501 shall describe or provide, as applicable: (1) The following information regarding the transaction in question: (i) A summary setting forth the essentials of the transaction, including a statement of the purpose of the transaction, its scope, both within and outside of the United States, as applicable, whether the foreign person is acquiring a collection of assets or interest in an entity, and the extent to which it is part of a larger project undertaken by the foreign person; (ii) The nature of the transaction, for example, whether the transaction involves a purchase, lease, or concession of real estate and the term, if any; VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 (iii) The name, United States address (if any), website address (if any), nationality (for individuals) or place of incorporation or other legal organization (for entities), and address of the principal place of business of each foreign person that is a party to the transaction; (iv) The name, address, website address (if any), principal place of business, and place of incorporation or other legal organization of the current holder of interest in the real estate that is the subject of the transaction; (v) In the case that a U.S. public entity is a party to the covered real estate transaction, the name, telephone number, and email address of the primary point of contact for the U.S. public entity; (vi) The name, address, and nationality (for individuals) or place of incorporation or other legal organization (for entities) of: (A) The immediate parent, the ultimate parent, and each intermediate parent, if any, of the foreign person that is a party to the transaction; (B) Where the ultimate parent is a private company, the ultimate owner(s) of such parent; and (C) Where the ultimate parent is a public company, any shareholder with an interest of greater than five percent in such parent; (vii) The name, address, website address (if any), and nationality (for individuals) or place of incorporation or other legal organization (for entities) of the foreign person or foreign persons that will be afforded property rights with respect to the real estate that is the subject of the covered real estate transaction; (viii) The actual or expected completion date of the transaction; (ix) A good faith approximation of the fair market value of the interest acquired in the covered real estate in U.S. dollars, as of the date of the notice; (x) The name of any and all financial institutions and real estate agents/ brokers involved in the transaction, including as advisors, underwriters, or sources of financing for the transaction; (xi) A copy of the definitive documentation of the transaction, such as a purchase, lease, or concession agreement, or if none exists, the document establishing the material terms of the transaction, which in the context of a transaction involving a covered port, must be signed and dated; (xii) Whether the foreign person will have any of the following rights or abilities with respect to the real estate as a result of the transaction and any additional information regarding such property rights: PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 (A) To physically access the real estate; (B) To exclude others from physically accessing the real estate; (C) To improve or develop the real estate; or (D) To attach fixed or immovable structures or objects to the real estate. (2) A detailed description of real estate that is the subject of the transaction, including as applicable: (i) The location, by address and geographic coordinates in decimal degrees to the 4th digit, of the real estate that is the subject of the covered real estate transaction; (ii) A description of the real estate that is the subject of the covered real estate transaction including the approximate size (in acres, feet, or other appropriate measurement); nature of the real estate (e.g., zoning type and the major topographical or other features of the real estate); current use of the real estate; and structures that are or will be on the real estate; (iii) A description of any leases, licenses, permits, easements, encumbrances, or other grants or approvals associated with the real estate, including whether any involve the U.S. Government, as well as any feasibility studies conducted with respect to the real estate; and (iv) The name(s) of and distance(s) to any relevant covered port, military installation, or any other facility or property of the U.S. Government as identified in this part, and that is relevant to CFIUS jurisdiction given the location of the real estate that is the subject of the transaction. (3) With respect to the foreign person engaged in the transaction and its parents: (i) A description of the business or businesses of the foreign person and its ultimate parent, and the CAGE codes, NAICS codes, and DUNS numbers, if any, for such businesses; (ii) The plans of the foreign person for the real estate with respect to: (A) Use and development of the real estate; (B) Changing the nature of the real estate including building new structures or removing or altering current structures, including the anticipated dimensions and any physical security measures employed at the real estate; and (C) Assigning, modifying, or terminating any leases, licenses, permits, easements, encumbrances, or other grants or approvals referred to in paragraph (b)(2)(iii) of this section; (iii) Whether the foreign person is controlled by or acting on behalf of a foreign government, including as an E:\FR\FM\17JAR3.SGM 17JAR3 lotter on DSKBCFDHB2PROD with RULES3 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations agent or representative, or in some similar capacity, and if so, the identity of the foreign government; (iv) Whether a foreign government or a person controlled by or acting on behalf of a foreign government: (A) Has or controls property rights or has or controls ownership interests, including contingent equity interest, of the foreign person that is a party to the transaction or any parent of the foreign person, and if so, the nature and amount of any such interests, and with regard to contingent equity interest, the terms and timing of conversion; (B) Has the right or power to appoint any of the principal officers or the members of the board of directors (including other persons who perform the duties usually associated with such titles) of the foreign person that is a party to the transaction or any parent of that foreign person; (C) Holds any other contingent interest (for example, such as might arise from a lending transaction) in the foreign person that is a party to the transaction and, if so, the rights that are covered by this contingent interest, and the manner in which they would be enforced; or (D) Has any other affirmative or negative rights or powers with respect to control over the foreign person engaged in the transaction, and if there are any such rights or powers, their source (for example, a ‘‘golden share,’’ shareholders agreement, contract, statute, or regulation) and the mechanics of their operation; (v) Any formal or informal arrangements among foreign persons that hold an ownership interest in any foreign person that is a party to the transaction or between such foreign person and other foreign persons to act in concert on particular matters affecting the real estate that is the subject of the transaction, and provide a copy of any documents that establish those rights or describe those arrangements; (vi) For each member of the board of directors or equivalent governing body (including external directors and other persons who perform duties usually associated with such titles) and officers (including president, senior vice president, executive vice president, and other persons who perform duties normally associated with such titles) of the foreign person engaged in the transaction and its immediate, intermediate, and ultimate parents, and for any individual having an ownership interest of five percent or more in the foreign person engaged in the transaction and in the foreign person’s VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 ultimate parent, the following information: (A) A curriculum vitae or similar professional synopsis, provided as part of the main notice, and (B) The following ‘‘personal identifier information,’’ which, for privacy reasons, and to ensure limited distribution, shall be set forth in a separate document, not in the main notice: (1) Full name (last, first, middle name); (2) All other names and aliases used; (3) Business address; (4) Country and city of residence; (5) Date of birth, in the format MM/ DD/YYYY; (6) Place of birth; (7) U.S. Social Security number (where applicable); (8) National identity number, including nationality, date and place of issuance, and expiration date (where applicable); (9) U.S. or foreign passport number (if more than one, all must be fully disclosed), nationality, date and place of issuance, and expiration date and, if a U.S. visa holder, the visa type and number, date and place of issuance, and expiration date; and (10) Dates and nature of foreign government and foreign military service (where applicable), other than military service at a rank below the top two noncommissioned ranks of the relevant foreign country; and (vii) The following ‘‘business identifier information’’ for the immediate, intermediate, and ultimate parents of the foreign person engaged in the transaction, including their main offices and branches: (A) Business name, including all names under which the business is known to be or has been doing business; (B) Business address; (C) Business phone number, website address, and email address; and (D) Employer identification number or other domestic tax or corporate identification number. (c) The voluntary notice shall list any filings with, or reports to, agencies of the U.S. Government that have been or will be made with respect to the transaction prior to its completion, indicating the agencies concerned, the nature of the filing or report, the date on which it was filed or the estimated date by which it will be filed, and a relevant contact point and/or telephone number within the agency, if known. (d) In the case of the establishment of a joint venture in which one or more of the parties is contributing covered real estate, information for the voluntary notice shall be prepared on the PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 3179 assumption that the foreign person that is party to the joint venture has made a purchase or lease, or been granted a concession to, the covered real estate that the other party to the joint venture is contributing or transferring to the joint venture. The voluntary notice shall describe the name and address of the joint venture and the entities that established, or are establishing, the joint venture. (e) Parties filing a voluntary notice shall, during the time that the matter is pending before the Committee or the President, promptly advise the Staff Chairperson of any material changes in plans, facts and circumstances addressed in the notice, and information provided or required to be provided to the Committee under this section, and shall file amendments to the notice to reflect such material changes. Such amendments shall become part of the notice filed by such persons under § 802.501, and the certifications required under paragraphs (h) and (l) of this section shall apply to such amendments. (f) Parties filing a voluntary notice shall include: (1) A complete pre-transaction organizational chart (and posttransaction, if different) including, information that identifies the name, principal place of business, and place of incorporation or other legal organization (for entities); nationality (for individuals); and ownership percentage (expressed in terms of both voting and economic interest, if different) for each of the following: (i) The immediate parent, the ultimate parent, and each intermediate parent, if any, of each foreign person that is a party to the transaction; (ii) Where the ultimate parent is a private company, the ultimate owner(s) of such parent; and (iii) Where the ultimate parent is a public company, any shareholder with an interest of greater than five percent in such parent. (2) The opinion of the person regarding whether: (i) It is a foreign person; (ii) It is controlled by a foreign government; and (iii) The transaction has resulted or could result in a foreign person being afforded property rights with respect to covered real estate, and the reasons for its view, focusing in particular on any powers (for example, by virtue of an agreement, statute, or regulation) that the foreign person will have with regard to the covered real estate, and how those powers can or will be exercised. (g) Parties filing a voluntary notice shall include information as to whether: E:\FR\FM\17JAR3.SGM 17JAR3 lotter on DSKBCFDHB2PROD with RULES3 3180 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations (1) Any party to the transaction is, or has been, a party to a mitigation agreement entered into or condition imposed under section 721, and if so, shall specify the date and purpose of such agreement or condition and the U.S. Government signatories; and (2) Any party to the transaction (including such party’s parents, subsidiaries, or entities under common control with the party) has been a party to a transaction previously notified to the Committee. (h) Each party filing a voluntary notice shall provide a certification of the notice consistent with § 802.202. A sample certification may be found on the Committee’s section of the Department of the Treasury website. (i) Parties filing a voluntary notice shall include with the notice a list identifying each document provided as part of the notice, including all documents provided as attachments or exhibits to the narrative response. (j) A party filing a voluntary notice may stipulate that the transaction is a covered real estate transaction. A stipulation offered by any party under this section must be accompanied by a detailed description of the basis for the stipulation. 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 real estate 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 real estate transaction. (k) In the case of a transaction where a U.S. public entity is a party to the transaction, the notifying party or parties may be the non-U.S. public entity. Each notifying party shall provide the information set out in this section with respect to itself and, to the extent known or reasonably available to it, with respect to the U.S. public entity. (l) At the conclusion of a review or investigation, each party that has filed additional information subsequent to the original notice shall file a final certification. (See § 802.202.) A sample certification may be found at the Committee’s section of the Department of the Treasury website. VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 § 802.503 period. Beginning of 45-day review (a) The Staff Chairperson shall accept a voluntary notice the next business day after the Staff Chairperson has: (1) Determined that the notice complies with § 802.502; and (2) Disseminated the notice to all members of the Committee. (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, or the Chairperson of the Committee has requested a notice under § 802.501(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. (c) The Staff Chairperson shall promptly advise in writing all parties to a transaction that have filed a voluntary notice of: (1) The acceptance of the notice; (2) The date on which the review begins; and (3) The designation of any lead agency or agencies. (d) Within two business days after receipt of an agency notice by the Staff Chairperson, the Staff Chairperson shall send written advice of such notice to the parties to the transaction that is subject to the notice. Such written advice shall identify the date on which the review began. (e) The Staff Chairperson shall promptly circulate to all Committee members any draft pre-filing notice, any agency notice, any complete notice, and any subsequent information filed by the parties. § 802.504 Deferral, rejection, or disposition of certain voluntary notices. (a) The Committee, acting through the Staff Chairperson, may: (1) Reject any voluntary notice that does not comply with § 802.501 or § 802.502 and so inform the parties promptly in writing; (2) Reject any voluntary notice at any time, and so inform the parties promptly in writing, if, after the notice has been submitted and before action by the Committee or the President has been concluded: (i) There is a material change in the transaction as to which notification has been made; or (ii) Information comes to light that contradicts material information provided in the notice by the parties; (3) Reject any voluntary notice at any time after the notice has been accepted, and so inform the parties promptly in writing, if the party or parties that have PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 submitted the voluntary notice do not provide follow-up information requested by the Staff Chairperson within three business days of the request, or within a longer time frame if the parties so request in writing and the Staff Chairperson grants that request in writing; or (4) Reject any voluntary notice before the conclusion of a review or investigation, and so inform the parties promptly in writing, if one of the parties submitting the voluntary notice has not submitted the final certification required by § 802.502(l). (b) Notwithstanding the authority of the Staff Chairperson under paragraph (a) of this section to reject an incomplete notice, the Staff Chairperson may defer acceptance of the notice, and the beginning of the review period specified by § 802.503, to obtain any information required under this section that has not been submitted by the notifying party or parties or other parties to the transaction. Where necessary to obtain such information, the Staff Chairperson may inform any non-notifying party or parties that notice has been filed with respect to a transaction involving the party, and request that certain information required under this section, as specified by the Staff Chairperson, be provided to the Committee within seven days after receipt of the Staff Chairperson’s request. (c) The Staff Chairperson shall notify the parties when the Committee has found that the transaction that is the subject of a voluntary notice is not a covered real estate transaction. (d) Example: The Staff Chairperson receives a joint notice from Corporation A, a foreign person, and Corporation X, a company that is selling covered real estate. The joint notice does not contain any information described under § 802.502 concerning the nature of the real estate. The Staff Chairperson may reject the notice or defer the start of the review period until the parties have supplied the omitted information. § 802.505 Determination of whether to undertake an investigation. (a) After a review of a notified transaction under § 802.503, the Committee shall undertake an investigation of any transaction that it has determined to be a covered real estate transaction if: (1) A member of the Committee (other than a member designated as ex officio under section 721(k)) advises the Staff Chairperson that the member believes that the transaction threatens to impair the national security of the United States and that the threat has not been mitigated; or E:\FR\FM\17JAR3.SGM 17JAR3 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations (2) The lead agency recommends, and the Committee concurs, that an investigation be undertaken. (b) The Committee shall also undertake, after a review of a covered real estate transaction under § 802.503, an investigation to determine the effects on national security of any covered real estate transaction that would result in control by a foreign person of critical infrastructure, as defined in § 800.214 of this title, of or within the United States, if the Committee determines that the transaction could impair the national security and such impairment has not been mitigated. (c) The Committee shall undertake an investigation as described in paragraph (b) of this section unless the Chairperson of the Committee (or the Deputy Secretary of the Treasury) and the head of any lead agency (or his or her delegee at the deputy level or equivalent) designated by the Chairperson determine on the basis of the review that the covered real estate transaction will not impair the national security of the United States. § 802.506 Determination not to undertake an investigation. If the Committee determines, during the review period described in § 802.503, not to undertake an investigation of a notified covered real estate transaction, action under section 721 shall be concluded. An official at the Department of the Treasury shall promptly inform the parties to a covered real estate transaction in writing of a determination of the Committee not to undertake an investigation and to conclude action under section 721. § 802.507 Commencement of investigation. (a) If it is determined that an investigation should be undertaken, such investigation shall commence no later than the end of the review period described in § 802.503. (b) An official of the Department of the Treasury shall promptly inform the parties to a covered real estate transaction in writing of the commencement of an investigation. lotter on DSKBCFDHB2PROD with RULES3 § 802.508 Completion or termination of investigation and report to the President. (a) Subject to paragraph (e) of this section, the Committee shall complete an investigation no later than the fortyfifth day after the date the investigation commences, or, if the forty-fifth day is not a business day, no later than the next business day after the forty-fifth day. (b) Upon completion or termination of any investigation, the Committee shall VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 send a report to the President requesting the President’s decision if: (1) The Committee recommends that the President suspend or prohibit the transaction; (2) The Committee is unable to reach a decision on whether to recommend that the President suspend or prohibit the transaction; or (3) The Committee requests that the President make a determination with regard to the transaction. (c) In circumstances when the Committee sends a report to the President requesting the President’s decision with respect to a covered real estate transaction, such report shall include information relevant to sections 721(d)(4)(A) and (B), and shall present the Committee’s recommendation. If the Committee is unable to reach a decision to present a single recommendation to the President, the Chairperson of the Committee shall submit a report of the Committee to the President setting forth the differing views and presenting the issues for decision. (d) Upon completion or termination of an investigation, if the Committee determines to conclude all deliberative action under section 721 with regard to a notified covered real estate transaction without sending a report to the President, action under section 721 shall be concluded. An official at the Department of the Treasury shall promptly advise the parties to such a transaction in writing of a determination to conclude action. (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 under this paragraph with respect to a covered real estate transaction, the Committee shall promptly notify the parties to the transaction of the extension. (f) For purposes of paragraph (e) of this section, the term extraordinary circumstances means circumstances for which extending an investigation is necessary and the appropriate course of action, in the Chairperson’s discretion, due to a force majeure event or to protect the national security of the United States. PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 § 802.509 3181 Withdrawal of notices. (a) A party (or parties) to a transaction that has filed notice under § 802.501(a) may request in writing, at any time prior to conclusion of all action under section 721, that such notice be withdrawn. Such request shall be directed to the Staff Chairperson and shall state the reasons why the request is being made. Such requests will ordinarily be granted, unless otherwise determined by the Committee. An official of the Department of the Treasury will promptly advise the parties to the transaction in writing of the Committee’s decision. (b) Any request to withdraw an agency notice by the agency that filed it shall be in writing and shall be effective only upon approval by the Committee. An official of the Department of the Treasury shall advise the parties to the transaction in writing of the Committee’s decision to approve the withdrawal request within two business days of the Committee’s decision. (c) In any case where a request to withdraw a notice is granted under paragraph (a) of this section: (1) The Staff Chairperson, in consultation with the Committee, shall establish, as appropriate: (i) A process for tracking actions that may be taken by any party to the covered real estate transaction before a notice is refiled under § 802.501; and (ii) Interim protections to address specific national security concerns with the covered real estate transaction identified during the review or investigation of the covered real estate transaction. (2) The Staff Chairperson shall specify a time frame, as appropriate, for the parties to resubmit a notice and shall advise the parties of that time frame in writing. (d) A notice of a transaction that is submitted under paragraph (c)(2) of this section shall be deemed a new notice for purposes of the regulations in this part, including § 802.701. Subpart F—Committee Procedures § 802.601 General. (a) In any assessment, review, or investigation of a covered real estate transaction, the Committee should consider the factors specified in section 721(f), as applicable, and, as appropriate, require the parties to provide to the Committee the information necessary to consider such factors. The Committee’s assessment, review, or investigation (if necessary) shall examine, as appropriate, whether: (1) The transaction is a covered real estate transaction; E:\FR\FM\17JAR3.SGM 17JAR3 3182 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations (2) There is credible evidence to support a belief that any foreign person party to a covered real estate transaction might take action that threatens to impair the national security of the United States; and (3) Provisions of law, other than section 721 and the International Emergency Economic Powers Act, provide adequate and appropriate authority to protect the national security of the United States. (b) During an assessment, review, or investigation, the Staff Chairperson may invite the parties to a notified transaction to attend a meeting with the Committee staff to discuss and clarify issues pertaining to the transaction. During an investigation, a party to the transaction under investigation may request a meeting with the Committee staff; such a request ordinarily will be granted. (c) The Staff Chairperson shall be the point of contact for receiving material filed with the Committee, including notices and declarations. (d) Where more than one lead agency is designated, communications on material matters between a party to the transaction and a lead agency shall include all lead agencies designated with regard to those matters. (e) The parties’ description of a transaction in a declaration or notice does not limit the ability of the Committee to, as appropriate, assess, review, or investigate, or exercise any other authorities available under section 721 with respect to any covered real estate transaction that the Committee identifies as having been notified to the Committee based upon the facts set forth in the declaration or notice, any additional information provided to the Committee subsequent to the original declaration or notice, or any other information available to the Committee. § 802.602 Role of the Secretary of Labor. lotter on DSKBCFDHB2PROD with RULES3 In response to a request from the Chairperson of the Committee, the Secretary of Labor shall identify for the Committee any risk mitigation provisions proposed to or by the Committee that would violate U.S. employment laws or require a party to violate U.S. employment laws. The Secretary of Labor shall serve no policy role on the Committee. § 802.603 Materiality. The Committee generally will not consider as material minor inaccuracies, omissions, or changes relating to financial or commercial factors not having a bearing on national security. VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 § 802.604 Tolling of deadlines during lapse in appropriations. Any deadline or time limitation under subparts D or E imposed on the Committee shall be tolled during a lapse in appropriations. Subpart G—Finality of Action § 802.701 721. Finality of actions under section All authority available to the President or the Committee under section 721(d), including divestment authority, shall remain available at the discretion of the President with respect to any covered real estate transaction. Subject to § 802.501(c)(1)(ii), such authority shall not be exercised if: (a) The Committee, through its Staff Chairperson, has advised a party (or the parties) in writing that a particular transaction with respect to which a voluntary notice or a declaration has been filed is not a covered real estate transaction; (b) The parties to the transaction have been advised in writing under § 802.405(a)(4), § 802.506, or § 802.508(d) that the Committee has concluded all action under section 721 with respect to the covered real estate transaction; or (c) The President has previously announced, under section 721(d), his or her decision not to exercise his or her authority under section 721 with respect to the covered real estate transaction. Subpart H—Provision and Handling of Information § 802.801 Obligation of parties to provide information. (a) Parties to a transaction that is notified or declared under subpart D or E, or a transaction for which no notice or declaration has been submitted and for which the Staff Chairperson has requested information to assess whether the transaction is a covered real estate transaction, shall provide information to the Staff Chairperson that will enable the Committee to conduct a full assessment, review, and/or investigation of the transaction. Parties to a transaction that have filed information with the Committee shall promptly advise the Staff Chairperson of any material changes to such information. If deemed necessary by the Committee, information may be obtained from parties to a transaction or other persons through subpoena or otherwise, under the Defense Production Act Reauthorization of 2003, as amended (50 U.S.C. 4555(a)). (b) Documentary materials or information required or requested to be filed with the Committee under this part PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 shall be submitted in English. Supplementary materials written in a foreign language shall be submitted in certified English translation. (c) Any information filed with the Committee in connection with any action for which a report is required under section 721(l)(6)(B) with respect to the implementation of a mitigation agreement or condition described in section 721(l)(3)(A) shall be accompanied by a certification that complies with the requirements of section 721(n) and § 802.202. A sample certification may be found at the Committee’s section of the Department of the Treasury website. § 802.802 Confidentiality. (a) Except as provided in paragraph (b) of this section, any information or documentary material submitted or filed with the Committee under this part, including information or documentary material filed under § 802.501(g), shall be exempt from disclosure under the Freedom of Information Act, as amended (5 U.S.C. 552 et seq.), 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; (c) This section shall continue to apply with respect to information and documentary material submitted or filed with the Committee in any case where: (1) Action has concluded under section 721 concerning a notified transaction; (2) A request to withdraw a notice or a declaration is granted under § 802.509 or § 802.404(c), respectively, or where a notice or a declaration has been rejected under § 802.504(a) or § 802.404(a), respectively; (3) The Committee determines that a notified or declared transaction is not a covered real estate transaction; or E:\FR\FM\17JAR3.SGM 17JAR3 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations (4) Such information or documentary material was filed under subpart D and the parties do not subsequently file a notice under subpart E. (d) Nothing in paragraph (a) of this section shall be interpreted to prohibit the public disclosure by a party of documentary material or information that it has submitted or filed with the Committee. Any such documentary material or information so disclosed may subsequently be reflected in the public statements of the Chairperson, who is authorized to communicate with the public and the Congress on behalf of the Committee, or of the Chairperson’s designee. (e) The provisions of the Defense Production Act Reauthorization of 2003, as amended (50 U.S.C. 4555(d)) relating to fines and imprisonment shall apply with respect to the disclosure of information or documentary material filed with the Committee under these regulations. Subpart I—Penalties and Damages lotter on DSKBCFDHB2PROD with RULES3 § 802.901 Penalties and damages. (a) Any person who submits a declaration or notice with a material misstatement or omission or makes a false certification under § 802.402, § 802.403, or § 802.502 may be liable to the United States for a civil penalty not to exceed $250,000 per violation. The amount of the penalty imposed for a violation shall be based on the nature of the violation. (b) Any person who violates a material provision of a mitigation agreement with, a material condition imposed by, or an order issued 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. For clarification, under the previous sentence, whichever penalty amount is greater may be imposed per violation, and the amount of the penalty imposed for a violation shall be based on the nature of the violation. (c) A mitigation agreement entered into or amended under section 721(l) may include a provision providing for liquidated or actual damages for breaches of the agreement. The mitigation agreement shall specify the amount of any liquidated damages that are a reasonable assessment of the harm to the national security that could result from a breach of the agreement. Any mitigation agreement containing a liquidated damages provision shall include a provision specifying that the Committee may consider the severity of the breach in deciding whether to seek VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 a lesser amount than that stipulated in the agreement. (d) A determination to impose penalties under paragraph (a) or (b) of this section must be made by the Committee. Notice of the penalty, including a written explanation of the conduct to be penalized and the amount of the penalty, shall be sent to the subject person electronically and by U.S. mail or courier service. Notice shall be deemed to have been effected by the earlier of the date of electronic transmission and the date of receipt of U.S. mail or courier service. For the purposes of this section, the term subject person means the person or persons who may be liable to the United States for a civil penalty. (e) Upon receiving notice of a penalty to be imposed under paragraphs (a) through (c) of this section, the subject person may, within 15 business days of receipt of such notice, submit a petition for reconsideration to the Staff Chairperson, including a defense, justification, or explanation for the conduct to be penalized. The Committee will review the petition and issue any final penalty determination within 15 business days of receipt of the petition. The Staff Chairperson and the subject person may extend either such period through written agreement. The Committee and the subject person may reach an agreement on an appropriate remedy at any time before the Committee issues any final penalty determination. (f) The penalties and damages authorized in paragraphs (a) through (c) of this section may be recovered in a civil action brought by the United States in federal district court. (g) Section 2 of the False Statements Accountability Act of 1996, as amended (18 U.S.C. 1001), shall apply to all information provided to the Committee under section 721, including by any party to a covered real estate transaction. (h) The penalties and damages available under this section are without prejudice to other penalties, civil or criminal, available under law. (i) The imposition of a civil monetary penalty or damages under these regulations creates a debt due to the U.S. Government. The Department of the Treasury may take action to collect the penalty or damages assessed if not paid within the time prescribed by the Committee and notified to the applicable party or parties. In addition or instead, the matter may be referred to the Department of Justice for appropriate action to recover the penalty or damages. PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 § 802.902 3183 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 a lead agency in coordination with the Staff Chairperson, 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 a lead agency in coordination with the Staff Chairperson may, in addition to the authority of the Committee to impose penalties under section 721(h) and to unilaterally initiate a review of any covered real estate transaction under 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 or declaration under clause (i) of section 721(b)(1)(C) with respect to a covered real estate 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. Subpart J—Foreign National Security Investment Review Regimes § 802.1001 Determinations. (a) The Committee may determine at any time that a foreign state has made significant progress toward establishing and effectively utilizing a robust process to analyze foreign investments for national security risks and to facilitate coordination with the United States on matters relating to investment security. (b) The Committee may rescind a determination under paragraph (a) of this section if the Committee determines that such a rescission is appropriate. (c) The Chairperson of the Committee shall publish a notice of any determination or rescission of a determination under paragraph (a) or (b) of this section, respectively, in the Federal Register. § 802.1002 Effect of determinations. (a) A determination under § 802.1001(a) shall take effect immediately upon publication of a notice of such determination under § 802.1001(c) and remain in effect unless rescinded under § 802.1001(b). (b) A rescission of a determination under § 802.1001(b) shall take effect on E:\FR\FM\17JAR3.SGM 17JAR3 3184 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations the date specified in the notice published under § 802.1001(c). (c) A determination under § 802.1001(a) does not apply to any transaction for which a declaration or notice has been accepted by the Staff Chairperson under § 802.403(a)(1) or § 802.503(a), respectively. (d) A rescission of a determination under § 802.1001(b) does not apply to any transaction for which: (1) The completion date is prior to the date upon which the rescission of a determination under paragraph (b) of this section becomes effective; or (2) Before publication of the rescission of determination under § 802.1001(c), the parties to the transaction have executed a binding written agreement, or other binding document, establishing the material terms of the transaction that is ultimately consummated. Appendix A to Part 802—List of Military Installations and Other U.S. Government Sites Site name Location lotter on DSKBCFDHB2PROD with RULES3 Part 1 Adelphi Laboratory Center .......................................................................................................... Air Force Maui Optical and Supercomputing Site ...................................................................... Air Force Office of Scientific Research ...................................................................................... Andersen Air Force Base ........................................................................................................... Army Futures Command ............................................................................................................ Army Research Lab—Orlando Simulations and Training Technology Center .......................... Army Research Lab—Raleigh Durham ...................................................................................... Arnold Air Force Base ................................................................................................................ Beale Air Force Base ................................................................................................................. Biometric Technology Center (Biometrics Identity Management Activity) ................................. Buckley Air Force Base .............................................................................................................. Camp MacKall ............................................................................................................................ Cape Cod Air Force Station ....................................................................................................... Cape Newenham Long Range Radar Site ................................................................................. Cavalier Air Force Station .......................................................................................................... Cheyenne Mountain Air Force Station ....................................................................................... Clear Air Force Station ............................................................................................................... Creech Air Force Base ............................................................................................................... Davis-Monthan Air Force Base .................................................................................................. Defense Advanced Research Projects Agency ......................................................................... Eareckson Air Force Station ....................................................................................................... Eielson Air Force Base ............................................................................................................... Ellington Field Joint Reserve Base ............................................................................................ Fairchild Air Force Base ............................................................................................................. Fort Benning ............................................................................................................................... Fort Belvoir ................................................................................................................................. Fort Bliss ..................................................................................................................................... Fort Campbell ............................................................................................................................. Fort Carson ................................................................................................................................. Fort Detrick ................................................................................................................................. Fort Drum .................................................................................................................................... Fort Gordon ................................................................................................................................ Fort Hood .................................................................................................................................... Fort Knox .................................................................................................................................... Fort Leavenworth ........................................................................................................................ Fort Lee ...................................................................................................................................... Fort Leonard Wood ..................................................................................................................... Fort Meade ................................................................................................................................. Fort Riley .................................................................................................................................... Fort Shafter ................................................................................................................................. Fort Sill ........................................................................................................................................ Fort Stewart ................................................................................................................................ Fort Yukon Long Range Radar Site ........................................................................................... Francis E. Warren Air Force Base ............................................................................................. Guam Tracking Station ............................................................................................................... Hanscom Air Force Base ........................................................................................................... Holloman Air Force Base ........................................................................................................... Holston Army Ammunition Plant ................................................................................................. Joint Base Anacostia-Bolling ...................................................................................................... Joint Base Andrews .................................................................................................................... Joint Base Elmendorf-Richardson .............................................................................................. Joint Base Langley-Eustis .......................................................................................................... Joint Base Lewis-McChord ......................................................................................................... Joint Base McGuire-Dix-Lakehurst ............................................................................................. Joint Base Pearl Harbor-Hickam ................................................................................................ Joint Base San Antonio .............................................................................................................. Joint Expeditionary Base Little Creek-Fort Story ....................................................................... Kaena Point Satellite Tracking Station ....................................................................................... King Salmon Air Force Station ................................................................................................... Kirtland Air Force Base .............................................................................................................. Kodiak Tracking Stations ............................................................................................................ VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 Adelphi, MD. Maui, HI. Arlington, VA. Yigo, Guam. Austin, TX. Orlando, FL. Raleigh Durham, NC. Coffee County and Franklin County, TN. Yuba City, CA. Clarksburg, WV. Aurora, CO. Pinebluff, NC. Sandwich, MA. Cape Newenham, AK. Cavalier, ND. Colorado Springs, CO. Anderson, AK. Indian Springs, NV. Tucson, AZ. Arlington, VA. Shemya, AK. Fairbanks, AK. Houston, TX. Spokane, WA. Columbus, GA. Fairfax County, VA. El Paso, TX. Hopkinsville, KY. Colorado Springs, CO. Frederick, MD. Watertown, NY. Augusta, GA. Killeen, TX. Fort Knox, KY. Leavenworth, KS. Petersburg, VA. Pulaski County, MO. Anne Arundel County, MD. Junction City, KS. Honolulu, HI. Lawton, OK. Hinesville, GA. Fort Yukon, AK. Cheyenne, WY. Inarajan, Guam. Lexington, MA. Alamogordo, NM. Kingsport, TN. Washington, DC. Camp Springs, MD. Anchorage, AK. Hampton, VA and Newport News, VA. Tacoma, WA. Lakehurst, NJ. Honolulu, HI. San Antonio, TX. Virginia Beach, VA. Waianae, HI. King Salmon, AK. Albuquerque, NM. Kodiak Island, AK. E:\FR\FM\17JAR3.SGM 17JAR3 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations lotter on DSKBCFDHB2PROD with RULES3 Site name Location Los Angeles Air Force Base ....................................................................................................... MacDill Air Force Base ............................................................................................................... Malmstrom Air Force Base ......................................................................................................... Marine Corps Air Ground Combat Center Twentynine Palms ................................................... Marine Corps Air Station Beaufort ............................................................................................. Marine Corps Air Station Cherry Point ....................................................................................... Marine Corps Air Station Miramar .............................................................................................. Marine Corps Air Station New River .......................................................................................... Marine Corps Air Station Yuma .................................................................................................. Marine Corps Base Camp Lejeune ............................................................................................ Marine Corps Base Camp Pendleton ......................................................................................... Marine Corps Base Hawaii ......................................................................................................... Marine Corps Base Hawaii, Camp H.M. Smith .......................................................................... Marine Corps Base Quantico ..................................................................................................... Mark Center ................................................................................................................................ Minot Air Force Base .................................................................................................................. Moody Air Force Base ................................................................................................................ Naval Air Station Joint Reserve Base New Orleans .................................................................. Naval Air Station Oceana ........................................................................................................... Naval Air Station Oceana Dam Neck Annex ............................................................................. Naval Air Station Whidbey Island ............................................................................................... Naval Base Guam ...................................................................................................................... Naval Base Kitsap Bangor ......................................................................................................... Naval Base Point Loma .............................................................................................................. Naval Base San Diego ............................................................................................................... Naval Base Ventura County—Port Hueneme Operating Facility ............................................... Naval Research Laboratory ........................................................................................................ Naval Research Laboratory—Blossom Point ............................................................................. Naval Research Laboratory—Stennis Space Center ................................................................. Naval Research Laboratory—Tilghman ..................................................................................... Naval Station Newport ................................................................................................................ Naval Station Norfolk .................................................................................................................. Naval Submarine Base Kings Bay ............................................................................................. Naval Submarine Base New London ......................................................................................... Naval Surface Warfare Center Carderock Division—Acoustic Research Detachment ............. Naval Support Activity Crane ..................................................................................................... Naval Support Activity Orlando .................................................................................................. Naval Support Activity Panama City .......................................................................................... Naval Support Activity Philadelphia ............................................................................................ Naval Support Facility Carderock ............................................................................................... Naval Support Facility Dahlgren ................................................................................................. Naval Support Facility Indian Head ............................................................................................ Naval Weapons Station Seal Beach Detachment Norco ........................................................... New Boston Air Station .............................................................................................................. Offutt Air Force Base .................................................................................................................. Oliktok Long Range Radar Site .................................................................................................. Orchard Combat Training Center ............................................................................................... Peason Ridge Training Area ...................................................................................................... Pentagon ..................................................................................................................................... Peterson Air Force Base ............................................................................................................ Picatinny Arsenal ........................................................................................................................ Pin˜on Canyon Maneuver Site ..................................................................................................... Pohakuloa Training Area ............................................................................................................ Point Barrow Long Range Radar Site ........................................................................................ Portsmouth Naval Shipyard ........................................................................................................ Radford Army Ammunition Plant ................................................................................................ Redstone Arsenal ....................................................................................................................... Rock Island Arsenal .................................................................................................................... Rome Research Laboratory ....................................................................................................... Schriever Air Force Base ........................................................................................................... Seymour Johnson Air Force Base ............................................................................................. Shaw Air Force Base .................................................................................................................. Southeast Alaska Acoustic Measurement Facility ..................................................................... Tin City Long Range Radar Site ................................................................................................ Tinker Air Force Base ................................................................................................................. Travis Air Force Base ................................................................................................................. Tyndall Air Force Base ............................................................................................................... U.S. Army Natick Soldier Systems Center ................................................................................. Watervliet Arsenal ....................................................................................................................... Wright-Patterson Air Force Base ................................................................................................ VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 El Segundo, CA. Tampa, FL. Great Falls, MT. Twentynine Palms, CA. Beaufort, SC. Cherry Point, NC. San Diego, CA. Jacksonville, NC. Yuma, AZ. Jacksonville, NC. Oceanside, CA. Kaneohe Bay, HI. Halawa, HI. Quantico, VA. Alexandria, VA. Minot, ND. Valdosta, GA. Belle Chasse, LA. Virginia Beach, VA. Virginia Beach, VA. Oak Harbor, WA. Apra Harbor, Guam. Silverdale, WA. San Diego, CA. San Diego, CA. Port Hueneme, CA. Washington, DC. Welcome, MD. Hancock County, MS. Tilghman, MD. Newport, RI. Norfolk, VA. Kings Bay, GA. Groton, CT. Bayview, ID. Crane, IN. Orlando, FL. Panama City, FL. Philadelphia, PA. Bethesda, MD. Dahlgren, VA. Indian Head, MD. Norco, CA. New Boston, NH. Bellevue, NE. Oliktok, AK. Boise, ID. Leesville, LA. Arlington, VA. Colorado Springs, CO. Morris County, NJ. Tyrone, CO. Hilo, HI. Point Barrow, AK. Kittery, ME. Radford, VA. Huntsville, AL. Rock Island, IL. Rome, NY. Colorado Springs, CO. Goldsboro, NC. Sumter, SC. Ketchikan, AK. Tin City, AK. Midwest City, OK. Fairfield, CA. Bay County, FL. Natick, MA. Watervliet, NY. Dayton, OH. E:\FR\FM\17JAR3.SGM 17JAR3 3185 3186 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations Part 2 Aberdeen Proving Ground .......................................................................................................... Camp Shelby .............................................................................................................................. Cape Canaveral Air Force Station ............................................................................................. Dare County Range .................................................................................................................... Edwards Air Force Base ............................................................................................................. Eglin Air Force Base ................................................................................................................... Fallon Range Complex ............................................................................................................... Fort Bragg ................................................................................................................................... Fort Greely .................................................................................................................................. Fort Huachuca ............................................................................................................................ Fort Irwin ..................................................................................................................................... Fort Polk ..................................................................................................................................... Fort Wainwright ........................................................................................................................... Hardwood Range ........................................................................................................................ Hill Air Force Base ...................................................................................................................... Mountain Home Air Force Base ................................................................................................. Naval Air Station Meridian .......................................................................................................... Naval Air Station Patuxent River ................................................................................................ Naval Air Weapons Station China Lake ..................................................................................... Naval Base Kitsap—Keyport ...................................................................................................... Naval Base Ventura County—Point Mugu Operating Facility .................................................... Naval Weapons Systems Training Facility Boardman ............................................................... Nellis Air Force Base .................................................................................................................. Nevada Test and Training Range .............................................................................................. Pacific Missile Range Facility ..................................................................................................... Patrick Air Force Base ................................................................................................................ Tropic Regions Test Center ....................................................................................................... Utah Test and Training Range ................................................................................................... Vandenberg Air Force Base ....................................................................................................... West Desert Test Center ............................................................................................................ White Sands Missile Range ....................................................................................................... Yuma Proving Ground ................................................................................................................ Site name Aberdeen, MD. Hattiesburg, MS. Cape Canaveral, FL. Manns Harbor, NC. Edwards, CA. Valparaiso, FL. Fallon, NV. Fayetteville, NC. Delta Junction, AK. Sierra Vista, AZ. San Bernardino County, CA. Leesville, LA. Fairbanks, AK. Necehuenemedah, WI. Ogden, UT. Mountain Home, ID. Meridian, MS. Lexington Park, MD. Ridgecrest, CA. Keyport, WA. Point Mugu, CA. Boardman, OR. Las Vegas, NV. Tonopah, NV. Kekaha, HI. Cocoa Beach, FL. Wahiawa, HI. Barro, UT. Lompoc, CA. Dugway, UT. White Sands Missile Range, NM. Yuma, AZ. County Township/range Part 3 90th Missile Wing, Francis E. Warren Air Force Base Missile Field (Colorado, Nebraska, and Wyoming). Logan, CO .......................... Morgan, CO ........................ Sedgwick, CO .................... Washington, CO ................. Weld, CO ............................ Banner, NE ......................... Cheyenne, NE .................... Deuel, NE ........................... Garden, NE ........................ Kimball, NE ........................ Morrill, NE .......................... lotter on DSKBCFDHB2PROD with RULES3 Scotts Bluff, NE .................. Sioux, NE ........................... Goshen, WY ....................... Laramie, WY ...................... VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 All lands except those located south of Township 8 North and east of Range 51 West using the Bureau of Land Management’s Public Lands Survey System. All lands located north of Township 3 North using the Bureau of Land Management’s Public Lands Survey System. All lands except those located east of Range 46 West using the Bureau of Land Management’s Public Lands Survey System. All lands located north of Township 4 North, and west of Range 52 West using the Bureau of Land Management’s Public Lands Survey System. All lands located north of Township 4 North, and east of Range 64 West using the Bureau of Land Management’s Public Lands Survey System. All. All. All lands located south of Township 15 North, and west of Range 43 West using the Bureau of Land Management’s Public Lands Survey System. All lands located south of Township 19 North, and west Range 43 West using the Bureau of Land Management’s Public Lands Survey System. All. All lands except those located north of Township 21 North using the Bureau of Land Management’s Public Lands Survey System. All. All lands except those located north of Township 26 North, and east of Range 57 West using the Bureau of Land Management’s Public Lands Survey System. All lands except those located north of Township 27 North using the Bureau of Land Management’s Public Lands Survey System. All lands except those located south of Township 14 North, and west of Range 64 West using the Bureau of Land Management’s Public Lands Survey System. E:\FR\FM\17JAR3.SGM 17JAR3 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations Site name 341st Missile Wing, Malmstrom Air Force Base Missile Field (Montana). County Township/range Platte, WY .......................... All lands except those located north of Township 27 North using the Bureau of Land Management’s Public Lands Survey System. All lands except those located north of Township 24 North using the Bureau of Land Management’s Public Lands Survey System. All. All lands except those located north of Township 24 North, and east of Range 8 East using the Bureau of Land Management’s Public Lands Survey System. All lands except those located east of Range 26 East using the Bureau of Land Management’s Public Lands Survey System. All lands located south of Township 35 North, and east of Range 7 West, using the Bureau of Land Management’s Public Lands Survey System. All lands except those located south of Township 11 North, and east of Range 20 East using the Bureau of Land Management’s Public Lands Survey System. All. All lands except those located south of Township 14 North using the Bureau of Land Management’s Public Lands Survey System. All lands except those located north of Township 31 North, and east of Range 5 East using the Bureau of Land Management’s Public Lands Survey System. All lands except those located south of Township 12 North, and west of Range 9 East using the Bureau of Land Management’s Public Lands Survey System. All lands located north of Township 10 North, and west of Range 23 East using the Bureau of Land Management’s Public Lands Survey System. All lands located west of Range 27 East using the Bureau of Land Management’s Public Lands Survey System. All lands located south of Township 23 North, and west of Range 25 East using the Bureau of Land Management’s Public Lands Survey System. All lands except those located west of Range 9 West, using the Bureau of Land Management’s Public Lands Survey System. All lands located north of Township 3 North, and west of Range 20 East using the Bureau of Land Management’s Public Lands Survey System. All lands located north of Township 3 North, and east of Range 12 East using the Bureau of Land Management’s Public Lands Survey System. All lands except those located west of Range 10 West using the Bureau of Land Management’s Public Lands Survey System. All lands except those located north of Township 34 North using the Bureau of Land Management’s Public Lands Survey System. All. All lands except those located east of Range 77 West using the Bureau of Land Management’s Public Lands Survey System. All lands except those located west of Range 93 West using the Bureau of Land Management’s Public Lands Survey System. All lands located north of Township 148 North, using the Bureau of Land Management’s Public Lands Survey System. All lands except those located north of Township 156 North, and east of Range 80 West using the Bureau of Land Management’s Public Lands Survey System. All lands located east of Range 95 West, using the Bureau of Land Management’s Public Lands Survey System. All lands except those located south of Township 145 North using the Bureau of Land Management’s Public Lands Survey System. Blaine, MT .......................... Cascade, MT ...................... Chouteau, MT .................... Fergus, MT ......................... Glacier, MT ......................... Golden Valley, MT ............. Judith Basin, MT ................ Lewis and Clark, MT .......... Liberty, MT ......................... Meagher, MT ...................... Musselshell, MT ................. Petroleum, MT .................... Phillips, MT ......................... Pondera, MT ...................... Stillwater, MT ..................... Sweet Grass, MT ............... Teton, MT ........................... Toole, MT ........................... 91st Missile Wing, Minot Air Force Base Missile Field (North Dakota). Wheatland, MT ................... Bottineau, ND ..................... Burke, ND ........................... Dunn, ND ........................... lotter on DSKBCFDHB2PROD with RULES3 McHenry, ND ...................... McKenzie, ND .................... McLean, ND ....................... VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 PO 00000 3187 Frm 00031 Fmt 4701 Sfmt 4700 E:\FR\FM\17JAR3.SGM 17JAR3 3188 Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules and Regulations Site name County Township/range Mercer, ND ......................... All lands located north of Township 145 North, east of Range 90 West, using the Bureau of Land Management’s Public Lands Survey System. All. All lands located south of Township 155 North, west of Range 72 West using the Bureau of Land Management’s Public Lands Survey System. All. All lands except those located south of Township 148 North, and east of Range 78 West using the Bureau of Land Management’s Public Lands Survey System. All lands except those located north of Township 155 North, and east of Range 83 West using the Bureau of Land Management’s Public Lands Survey System. All lands located south of Township 158 North, and east of Range 96 West using the Bureau of Land Management’s Public Lands Survey System. Mountrail, ND ..................... Pierce, ND .......................... Renville, ND ....................... Sheridan, ND ...................... Ward, ND ........................... Williams, ND ....................... Site name Location I Part 4 Boston Range Complex ............................................ Boston Operating Area .............................................. Charleston Operating Area ....................................... Cherry Point Operating Area ..................................... Corpus Christi Operating Area .................................. Eglin Gulf Test and Training Range ......................... Gulf of Mexico Range Complex ................................ Hawaii Range Complex ............................................. Jacksonville Operating Area ..................................... Jacksonville Range Complex .................................... Key West Operating Area ......................................... Key West Range Complex ........................................ Narragansett Bay Range Complex ........................... Narragansett Bay Operating Area ............................. New Orleans Operating Area .................................... Northern California Range Complex ......................... Northwest Training Range Complex ......................... Panama City Operating Area .................................... Pensacola Operating Area ........................................ Point Mugu Sea Range ............................................. Southern California Range Complex ........................ Virginia Capes Operating Area ................................. Virginia Capes Range Complex ................................ Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Offshore Massachusetts, New Hampshire, Maine. Massachusetts, New Hampshire, Maine. North Carolina, South Carolina. North Carolina, South Carolina. Texas. Florida. Mississippi, Alabama, Florida. Hawaii. Florida, Georgia. Florida. Florida. Florida. Connecticut, Massachusetts, New York, Rhode Island. Connecticut, Massachusetts, New York, Rhode Island. Louisiana. California. Oregon, Washington. Florida. Alabama, Florida. California. California. Delaware, Maryland, North Carolina, Virginia. Delaware, Maryland, North Carolina, Virginia. Dated: January 6, 2020. Thomas Feddo, Assistant Secretary for Investment Security. [FR Doc. 2020–00187 Filed 1–13–20; 4:15 pm] lotter on DSKBCFDHB2PROD with RULES3 BILLING CODE 4810–25–P VerDate Sep<11>2014 19:29 Jan 16, 2020 Jkt 250001 PO 00000 Frm 00032 Fmt 4701 Sfmt 9990 E:\FR\FM\17JAR3.SGM 17JAR3

Agencies

[Federal Register Volume 85, Number 12 (Friday, January 17, 2020)]
[Rules and Regulations]
[Pages 3158-3188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00187]



[[Page 3157]]

Vol. 85

Friday,

No. 12

January 17, 2020

Part III





Department of the Treasury





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Office of Investment Security





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31 CFR Part 802





Provisions Pertaining to Certain Transactions by Foreign Persons 
Involving Real Estate in the United States; Final Rule

Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / Rules 
and Regulations

[[Page 3158]]


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DEPARTMENT OF THE TREASURY

Office of Investment Security

31 CFR Part 802

RIN 1505-AC63


Provisions Pertaining to Certain Transactions by Foreign Persons 
Involving Real Estate in the United States

AGENCY: Office of Investment Security, Department of the Treasury.

ACTION: Final rule; interim rule with request for comments.

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SUMMARY: The final rule establishes regulations to implement the 
provisions relating to real estate transactions in section 721 of the 
Defense Production Act of 1950, as amended by the Foreign Investment 
Risk Review Modernization Act of 2018. This rule sets forth the scope 
of, and process and procedures relating to, the national security 
review by the Committee on Foreign Investment in the United States of 
certain transactions involving the purchase or lease by, or concession 
to, a foreign person of certain real estate in the United States. The 
interim rule also adds a new definition for the term ``principal place 
of business,'' and the Department of the Treasury is seeking comments 
on this definition.

DATES: 
    Effective date: The final rule is effective on February 13, 2020. 
The interim rule adding Sec.  802.232 is effective on February 13, 
2020.
    Comment date: The Department of the Treasury (Treasury Department) 
is seeking written comments from the public on the definition of 
``principal place of business'' found at Sec.  802.232, which must be 
received by February 18, 2020.

ADDRESSES: Written comments on Sec.  802.232 may be submitted through 
one of two methods:
     Electronic Submission: Comments may be submitted 
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 Treasury Department to make the 
comments available to the public.
     Mail: Send to U.S. Department of the Treasury, Attention: 
Laura Black, Director of Investment Security Policy and International 
Relations, 1500 Pennsylvania Avenue NW, Washington, DC 20220.
    We encourage comments to be submitted via https://www.regulations.gov. Please submit comments only and include your name 
and company name (if any), and cite ``Provisions Pertaining to Certain 
Transactions by Foreign Persons Involving Real Estate in the United 
States'' in all correspondence. In general, the Treasury Department 
will post all comments to https://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: Laura Black, Director of Investment 
Security Policy and International Relations; Meena R. Sharma, Deputy 
Director of Investment Security Policy and International Relations; or 
James Harris, Senior 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

A. The Statute and Proposed Rule

    On August 13, 2018, the Foreign Investment Risk Review 
Modernization Act of 2018 (FIRRMA), Subtitle A of Title XVII of Public 
Law 115-232, 132 Stat. 2173, became law. FIRRMA amended and updated 
section 721 (section 721) of the Defense Production Act of 1950 (DPA), 
which delineates the authorities and jurisdiction of the Committee on 
Foreign Investment in the United States (CFIUS or the Committee). 
FIRRMA maintains the Committee's jurisdiction over any transaction 
which could result in foreign control of any U.S. business, and it 
broadens the authorities of the President and CFIUS under section 721 
to review and to take action to address any national security concerns 
arising from certain non-controlling investments and real estate 
transactions. Additionally, FIRRMA modernizes CFIUS's processes to 
better enable timely and effective reviews of transactions falling 
under its jurisdiction. In FIRRMA, Congress acknowledged the important 
role of foreign investment in the U.S. economy and reaffirmed the 
United States' open investment policy, consistent with the protection 
of national security. See section 1702(b) of FIRRMA.
    FIRRMA requires the issuance of regulations implementing its 
provisions. In Executive Order 13456, 73 FR 4677 (January 23, 2008), 
the President directs the Secretary of the Treasury to issue 
regulations implementing section 721. On September 24, 2019, the 
Treasury Department published two proposed rules to implement 
provisions of FIRRMA. See 84 FR 50174 (September 24, 2019); 84 FR 50214 
(September 24, 2019). (The Office of the Federal Register made versions 
available for public inspection on September 17, 2019.) Public comments 
on the proposed rules were due by October 17, 2019.
    The proposed rule at 84 FR 50214 proposed establishing new 
regulations at part 802 of title 31 of the Code of Federal Regulations 
(CFR). These regulations specifically relate to CFIUS's authorities and 
the process and procedures to review transactions involving the 
purchase or lease by, or concession to, a foreign person of certain 
real estate in the United States. Further explanation of FIRRMA and the 
proposed provisions can be found in the proposed rule at 84 FR 50214; 
changes to the proposed rule are explained in further detail below.
    The proposed rule at 84 FR 50174, which proposed amendments to the 
CFIUS regulations codified at part 800 of title 31 of the CFR, is being 
finalized in a separate rulemaking (the part 800 rule). The part 800 
rule specifically relates to CFIUS's authorities and the process and 
procedures to review: (1) A merger, acquisition, or takeover by or with 
a foreign person that could result in foreign control of a U.S. 
business; (2) a non-controlling ``other investment'' in a U.S. business 
that affords a foreign person specified access to information in the 
possession of, rights in, or involvement in the substantive 
decisionmaking of certain U.S. businesses related to critical 
technologies, critical infrastructure, or sensitive personal data 
(which the part 800 rule and this preamble describe as ``covered 
investments''); (3) any change in a foreign person's rights if such 
change could result in foreign control of a U.S. business or a covered 
investment; and (4) any other transaction, transfer, agreement, or 
arrangement, the structure of which is designed or intended to evade or 
circumvent the application of section 721.
    FIRRMA also authorizes the Committee to assess and collect fees 
with respect to covered real estate transactions for which a written 
notice is filed. The Treasury Department will publish a separate 
proposed rule implementing the Committee's fee authority at a later 
date.

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B. Structure of FIRRMA Rulemaking and This Rule

    Consistent with CFIUS processes generally, this rule reflects 
extensive consultation with CFIUS member agencies, as well as other 
relevant U.S. Government agencies.
    This action finalizes the provisions for the new part 802 of title 
31 of the CFR. This rule focuses on the Committee's expanded 
jurisdiction over certain types of real estate transactions. 
Accordingly, this rule implements one part of the overall scope of 
CFIUS's jurisdiction under section 721, as amended by FIRRMA. There are 
additional provisions in FIRRMA that are the subject of the part 800 
rule. As explained in the preamble to the proposed rule, the Treasury 
Department is creating a new part (part 802) because it has determined 
that the technical and procedural aspects of CFIUS's review of 
transactions involving real estate are sufficiently distinct from those 
related to control transactions and certain non-controlling investments 
to warrant separate rulemaking. Nevertheless, this rule incorporates 
certain features and relevant provisions from part 800, which should be 
familiar to parties that have filed with CFIUS in the past.
    There are additional provisions in FIRRMA that are the subject of 
the part 800 rule. In particular, a transaction that could result in 
control of a U.S. business by a foreign person is subject to part 800, 
and is not a covered real estate transaction under this rule. 
Additionally, CFIUS's new authority over covered investments in certain 
U.S. businesses, as provided by FIRRMA, is subject to part 800 (under 
the concurrent rulemaking).
    The Treasury Department recognizes that FIRRMA's expansion of the 
Committee's jurisdiction over certain real estate transactions may 
impact parties who have not traditionally had reason to file with 
CFIUS. This rule therefore seeks to provide clarity to the business and 
investment communities with respect to the types of real estate 
transactions that are covered by the new authority under FIRRMA. In 
particular, this rule implements CFIUS's new real estate jurisdiction 
following the approach described in the proposed rule and is generally 
structured around specific sites--certain airports, maritime ports, and 
military installations--and specific geographic areas in or around 
those sites. (While the rule allows that ``other facilities or 
properties of the U.S. Government'' may in the future be included in 
the list of sites identified in the rule, none has been included at 
this time.) Given the specificity of certain provisions of this rule, 
the Treasury Department anticipates that it will periodically review, 
and when necessary, amend the regulations to address changes in the 
national security landscape.
    In response to public comments, this action also implements an 
interim rule with respect to the definition of ``principal place of 
business'' found at Sec.  802.232, and the Treasury Department is 
seeking public comment on this definition.

II. Overview of Comments on the Proposed Rule

    During the public comment period, the Treasury Department received 
a number of written submissions on the proposed rule reflecting a wide 
range of views. All comments received by the end of the comment period 
are available on the public rulemaking docket at https://www.regulations.gov. Additionally, the Treasury Department hosted a 
public teleconference call to discuss the proposed rule on September 
27, 2019, and a summary is available on the Committee's section of the 
Treasury Department website.
    The Treasury Department considered each comment submitted on the 
proposed rule. Some of the comments were general in nature, for 
example, supporting the Treasury Department's efforts and approach with 
respect to aspects of the proposed rule. Other commenters noted the 
potential impact of the proposed rule on certain types of real estate 
and related transactions. The Treasury Department recognizes the vital 
importance of foreign investment to the U.S. economy, including 
investments in real estate. The Treasury Department drafted the 
proposed rule, and made revisions in finalizing the rule, to protect 
U.S. national security from the risk posed by certain foreign 
investment while at the same time maintaining the open foreign 
investment policy of the United States. The Treasury Department has 
determined that the specificity provided in the rule--with respect to, 
for example, identification of specific sites and relevant distances--
provides clarity to the business and investment communities with 
respect to the types of real estate transactions that are covered by 
the Committee's new authority under FIRRMA. The Treasury Department 
will evaluate implementation of the rule and will provide, as 
appropriate, additional information to assist the public.
    Some commenters requested clarification of specific provisions. 
Where appropriate, the Treasury Department provided additional 
clarification in the text of the rule and included more illustrative 
examples. Some commenters, however, requested greater specificity than 
is appropriate in regulations of general applicability or revisions 
that conflict with the Committee's statutory authority under FIRRMA. 
The section-by-section analysis below includes responses to comments. 
Further edits were made to the rule for consistency and clarity.
    In addition to comments on the substance of the rule, several 
commenters requested an extension of the public comment period. The 
Treasury Department did not extend the public comment period in light 
of the fixed effective date established by FIRRMA. The Treasury 
Department anticipates that it will periodically review, and as 
necessary, make changes to the regulations (and any appendices), 
consistent with applicable law, and when appropriate, will provide the 
public an opportunity to comment.

III. Discussion of the Rule

A. Relationship With Part 800

    Before addressing individual sections of the rule raised in the 
comments or otherwise revised from the proposed rule, it is important 
to address the relationship between this rule and the part 800 rule, 
which as noted is being issued concurrently with this rule.
    The structure of the part 802 regulations is similar to the 
regulations at part 800, which are being updated and replaced through 
the concurrent rulemaking. Parties familiar with the part 800 
regulations should find that this rule takes a comparable approach with 
respect to defining key terms, describing transactions that are covered 
and not covered under the rule, listing the information requirements 
for a filing to be complete, and setting forth the Committee's process 
and procedures, among other things. While differences exist between 
this rule and the part 800 rule, the scope and overall approach taken 
by the Committee to evaluating, concluding action on, or taking action 
on a transaction is consistent with part 800 and section 721.
    Some commenters raised questions regarding specific sections of the 
rule that suggested additional clarity with respect to the relation 
between these two parts may be helpful. This rule is focused on certain 
types of real estate transactions involving a foreign person. Parties 
should be aware that certain transactions involving real estate could 
be covered transactions under the part 800 rule. For example, 
transactions that could result in foreign control or certain non-
controlling investments by a foreign

[[Page 3160]]

person in an entity engaged in interstate commerce in the United States 
and that owns real estate could be subject to part 800 instead of part 
802. In some cases, a collection of assets that includes real estate 
may constitute a U.S. business under part 800. Additionally, a long-
term lease or concession arrangement under which a lessee makes 
substantially all business decisions concerning the operation of a 
leased entity, as if it were the owner, could be subject to part 800 
instead of part 802. In order to comprehensively understand the 
transactions that could fall within the scope of this rule, in contrast 
to the transactions that could fall within the scope of the part 800 
rule, the public is encouraged to be aware of the separate and 
concurrent rulemaking on part 800.
    Finally, although FIRRMA introduces the term ``close proximity'' in 
the context of real estate transactions, and this rule defines the 
geographic coverage for real estate transactions, CFIUS has and will 
continue to retain the authority to assess and, if necessary, take 
action with respect to any covered transaction under the part 800 rule 
that gives rise to national security concerns on the basis of proximity 
to any government site and activity. The Committee's authority under 
the part 800 rule to review and take action on a transaction is not 
limited in any way by the sites or distances specified in this rule.

B. Interim Rule: Section 802.232--Principal Place of Business

    This rule includes a definition of ``principal place of business'' 
as an interim rule. The interim rule is effective as of February 13, 
2020, and the Treasury Department is seeking public comment on the new 
definition through February 18, 2020.
    The proposed rule used the term ``principal place of business'' but 
did not define it. A commenter urged the Committee to provide 
additional clarity by defining the term. In response to this comment 
and comments received on the part 800 rule, Sec.  802.232 now provides 
a definition of a party's ``principal place of business'' as ``the 
primary location where an entity's management directs, controls, or 
coordinates the entity's activities, or, in the case of an investment 
fund, where the fund's activities and investments are primarily 
directed, controlled, or coordinated by or on behalf of the general 
partner, managing member, or equivalent,'' subject to the qualification 
in Sec.  802.232(b). For those entities whose nerve center is in the 
United States, the purpose of the qualification in Sec.  802.232(b) is 
to nevertheless ensure consistent treatment of an entity's principal 
place of business in accordance with its own assertions to government 
entities, provided the facts have not changed since those assertions.
    Because the definition of ``principal place of business'' in Sec.  
802.232 is new, it is being made effective by this rule on an interim 
basis and may be amended based on comments received. As an interim 
rule, Sec.  802.232 will become effective on the same date as the other 
provisions in this rule (i.e., February 13, 2020) to provide clarity 
and certainty for transaction parties. The Treasury Department invites 
comments on this interim rule.

C. Summary of Comments and Changes From the Proposed Rule

1. Subpart A--General
Section 802.102--Risk-Based Analysis
    The proposed rule, at Sec.  802.102, defined the terms ``threat,'' 
``vulnerabilities,'' and ``consequences to national security'' in 
describing the risk-based analyses undertaken by the Committee to 
determine whether a specific transaction represents a risk to national 
security. One commenter sought clarification about how, specifically, 
these terms would be applied to use and lease agreements with foreign 
airlines.
    The rule makes no change to the proposed text of Sec.  802.102 in 
response to this comment because the rule applies to many types of real 
estate transactions, and it would be inappropriate in regulations of 
general applicability to specify the application of this provision to a 
particular type of transaction. In conducting a risk-based analysis for 
any transaction, CFIUS analyzes the particular facts and circumstances 
of the transaction to identify the national security considerations, if 
any, presented by the transaction. Section 721(f) of the DPA, as 
amended, provides an illustrative list of factors for consideration by 
CFIUS and the President in determining whether a covered transaction 
poses a national security risk. Some of these factors may be relevant 
to covered real estate transactions. While further discussing the 
specific factors relevant to particular types of real estate 
transactions in one sector is not appropriate for a broader rule, the 
Committee will consider whether additional information can be made 
publicly available to assist parties in understanding the Committee's 
analysis in general. In the meantime, parties may find helpful the 
Treasury Department's previously published Guidance Concerning the 
National Security Review Conducted by CFIUS, 73 FR 74567 (December 8, 
2008), which is still in effect.
Section 802.105--Rules of Construction and Interpretation
    The rule adds a new section to clarify that the examples included 
in the regulations are provided for informational purposes and should 
not be construed to alter the meaning of the text of the regulations in 
this part, as well as to clarify that, as used throughout the 
regulations, the term ``including'' means ``including without 
limitation.''
2. Subpart B--Definitions
    Subpart B sets forth the defined terms for part 802. More than half 
of the defined terms in this rule are incorporated from the part 800 
rule, with conforming changes to apply in the context of real estate 
transactions, as applicable. The remainder of the terms are 
specifically defined for part 802.
Section 802.203--Close Proximity
    The proposed rule defined ``close proximity'' as the area that 
extends outward one mile from the boundary of a relevant site. Some 
commenters encouraged the Committee to ensure that applicable set-back 
distances are appropriately tailored to each individual site. A number 
of commenters supported an online resource--such as a map or other 
interactive tool--to assist the public in understanding the geographic 
areas that are subject to CFIUS jurisdiction under the rule.
    The rule makes no change to this definition in response to these 
comments. The identification of particular military installations and 
the distances around those sites were determined by the Department of 
Defense based upon an evaluation of national security considerations. 
The Department of Defense will continue on an ongoing basis to assess 
its military installations and the geographic scope set under the rule 
to ensure appropriate application in light of national security 
considerations.
    With respect to the comments seeking an online resource, the 
Treasury Department anticipates making available a web-based tool to 
help the public understand the geographic coverage of the rule. In the 
meantime, information relevant to certain aspects of the rule is 
available online. For example, the Census Bureau within the Department 
of Commerce maintains a web-based system, TIGERweb, which allows users 
to select features (e.g., military installations, urbanized areas,

[[Page 3161]]

and urban clusters) and view such attributes on a map. Additionally, 
each of the National Oceanic and Atmospheric Administration and the 
Bureau of Ocean Energy Management maintains a web-based map delineating 
U.S. maritime boundaries, including the territorial sea and other 
attributes relevant to the geographic coverage under the rule.
Section 802.206--Concession
    The proposed rule defined ``concession'' as a grant of rights by a 
U.S. public entity for the purpose of developing or operating 
infrastructure for an airport or maritime port. A commenter noted that 
this term is defined differently in the Department of Transportation 
regulations regarding airport concessions and suggested that the 
specific definition in the proposed rule might cause confusion given 
the term's usage in the Department of Transportation regulations.
    The rule makes no change to this definition in response to the 
comment. The Department of Transportation definition does not match the 
intended scope of real estate transactions subject to CFIUS's 
jurisdiction as implemented by the rule. Nevertheless, parties in all 
industries, including the airport concession industry, should not be 
confused about the meaning of the term ``concession'' in the rule as it 
is explicitly defined as a type of real estate transaction. For greater 
clarity, the rule does contain a revision specifying that the defined 
term includes the assignment of part of a concession.
Section 802.208--Control
    The proposed rule adopted the definition of ``control'' from the 
proposed rule for part 800. The part 800 rule makes a technical 
correction to the definition of ``control,'' and in order to remain 
consistent with part 800, this rule makes the same technical 
correction. In particular, Sec.  802.208(c)(4) has been revised to 
clarify that anti-dilution protections are more accurately 
characterized as a right instead of a power.
Section 802.210--Covered Port
    The proposed rule provided definitions for the terms ``airport'' 
and ``maritime port.'' A commenter suggested that the Committee publish 
an appendix listing the airports and maritime ports that meet the 
definitions in the proposed rule, noting that the list of relevant 
sites may change and some practitioners are not familiar with 
information published by the Department of Transportation. Another 
commenter suggested that the Committee make available on its website 
hyperlinks to the relevant lists of airports and maritime ports 
maintained by the Department of Transportation.
    Several revisions have been made to the rule in response to the 
comments. First, the rule combines the definitions of ``airport'' and 
``maritime port'' from the proposed rule into a new term, ``covered 
port.'' This definition of ``covered port'' identifies in Sec.  
802.210(a) the relevant lists maintained by the Department of 
Transportation and clarifies the specific references to the various 
lists. Second, the definition includes provisions to clarify the 
effective date of any changes to the Department of Transportation 
lists. Specifically, Sec.  802.210(b)(1) sets forth a 30-day delayed 
effectiveness for any additions to any of the airport and maritime port 
lists under the definition of ``covered port'' in paragraph (a). This 
was done because changes to the lists are not published in the Federal 
Register, and the Treasury Department wanted to provide the public with 
a notice period for any additions. By contrast, when an airport or 
maritime port no longer meets the rule's definition of covered port in 
paragraph (a), the removal of the port from the relevant list will be 
recognized immediately upon publication of the updated list by the 
Department of Transportation. The rule adds Sec.  802.210(b)(2) to make 
clear that the airport or maritime port list that applies for any 
particular transaction is the list that is in effect (taking into 
account the 30-day delayed effectiveness in paragraph (b)(1)) on the 
day prior to the earlier of the date on which the parties have signed a 
written document establishing the material terms of the transaction or 
the completion date.
    With respect to compiling all covered ports into a single list, the 
Treasury Department has determined it most practicable to direct the 
public to available online resources maintained and updated by the 
Department of Transportation. The Treasury Department anticipates 
making information available on the CFIUS web page that will assist the 
public in navigating to the relevant lists maintained by the Department 
of Transportation.
Section 802.211--Covered Real Estate
    The proposed rule defined ``covered real estate'' in a manner that 
connected specific sites with the relevant geographic coverage in and 
around those sites. Commenters did not suggest specific changes to the 
text of this definition. Instead, commenters generally supported the 
approach in the proposed rule of identifying specific sites and 
distances, and supported having online resources available to assist 
the public in understanding the geographic coverage of the rule. In 
particular, commenters expressed an interest in understanding the 
delineation of certain boundaries, including the U.S. coastline.
    The rule revises paragraph (b)(4) of this section by replacing the 
12 nautical mile reference with a reference to the territorial sea. The 
Treasury Department has determined that a reference to the territorial 
sea provides greater clarity to the public. Additionally, as noted 
above, the Treasury Department anticipates making a web-based tool 
available in the near-term to assist the public. In the meantime, 
existing U.S. Government resources provide relevant information for 
purposes of understanding various aspects of this rule.
Section 802.212--Covered Real Estate Transaction
    The proposed rule defined ``covered real estate transaction'' to 
capture the types of transactions subject to CFIUS's jurisdiction under 
the rule. A commenter suggested that the definition explicitly exclude 
transactions between a foreign person and its parent as well as between 
a foreign person and one or more of its controlled affiliates. The 
commenter also requested clarification with respect to submitting a 
single declaration or filing a single notice for multiple covered real 
estate transactions that are in close proximity to one another and 
associated with a single project such as in the renewable energy 
industry. Another commenter suggested that the rule cover other 
categories of real estate transactions--such as those involving 
cropland and rare earth minerals.
    The rule makes no change to the definition of ``covered real estate 
transaction'' in response to the comments. First, an intra-company 
transfer of assets, including real estate, carried out to achieve some 
legal, financial, or other business objective, might not constitute a 
covered real estate transaction, and in any case might not result in a 
change in the ultimate parent of the entity with the covered real 
estate and, therefore, might not present new national security 
considerations. However, the particular facts and circumstances of the 
specific arrangement would need to be considered. Second, with respect 
to multiple covered real estate transactions that are part of a larger 
project, a revision to the rule is not necessary

[[Page 3162]]

because parties can and should consider the particular circumstances of 
any transaction, including related transactions, in determining whether 
to submit a single declaration or notice or multiple to the Committee 
for review. National security factors, timing considerations, and other 
transaction characteristics may weigh in favor of taking a particular 
approach. Related to this comment, however, the rule has been revised 
in the sections describing the contents of declarations and notices to 
include a description of whether the transaction is part of a larger 
project undertaken by the foreign person. Finally, the Committee has 
not expanded this definition to cover other categories of real estate 
transactions because the categories suggested by the commenter are not 
authorized under FIRRMA.
    This section incorporates other revisions including to Sec.  
802.212(b) to clarify that a purchase, lease, or concession, where 
there is a subsequent change in rights that could result in the foreign 
person having at least three property rights, is a covered real estate 
transaction.
Section 802.214--Excepted Real Estate Foreign State
    The Treasury Department received a number of comments on the 
definition of ``excepted real estate foreign state.'' Commenters 
supported the concept of the excepted real estate foreign state and 
requested that the initial list be published as soon as possible. 
Commenters suggested particular countries or defined groups of 
countries be included as excepted real estate foreign states and that 
advance notice be given prior to any rescission. Commenters also 
requested that the factors for a determination under Sec.  802.1001 be 
precise and transparent and that the Committee consult with foreign 
states seeking to qualify as excepted real estate foreign states.
    The rule makes no change to the proposed text in response to these 
comments. With respect to the eligible foreign states, the Committee 
has initially selected Australia, Canada, and the United Kingdom of 
Great Britain and Northern Ireland. The Committee identified these 
countries due to aspects of their robust intelligence-sharing and 
defense industrial base integration mechanisms with the United States. 
Additionally, as noted in the preamble to the proposed rule, the 
concept and definition of ``excepted real estate foreign states'' are 
new and an expansive application carries potentially significant 
implications for the national security of the United States. 
Consequently, the Committee is initially identifying a limited number 
of eligible foreign states and may expand the list in the future.
    The rule revises this section to clarify that the definition of 
``excepted real estate foreign state'' operates as a two-criteria 
conjunctive test, with delayed effectiveness for the second criterion. 
Thus, as of February 13, 2020, each of the three foreign states that 
the Committee identifies as eligible foreign states will be an excepted 
real estate foreign state, without regard to the second criterion 
(i.e., favorable determination under Sec.  802.1001). In order for each 
of these countries to remain an excepted real estate foreign state 
after the end of the two-year delayed effectiveness period (i.e., 
February 13, 2022), the Committee must make a determination under Sec.  
802.1001. This two-year period is intended to provide these initial 
eligible foreign states time to ensure that their national security-
based foreign investment review processes and bilateral cooperation 
with the United States on national security-based investment reviews 
meet the requirement under Sec.  802.1001. This two-year period also 
provides the Committee time to develop processes and procedures for 
making determinations under Sec.  802.1001, which could be applied to a 
broader group of countries in the future. In selecting the initial 
eligible foreign states, the Committee takes no position on whether the 
foreign states currently meet the determination factors discussed below 
at Sec.  802.1001.
    Finally, the rule removes language regarding internal Committee 
processes (for which a conforming change was also made in Sec.  
802.1001), and revises note 1 to Sec.  802.214 to clarify the 
publication mechanics for identifying the foreign states that have met 
each of the two separate criteria of the definition of ``excepted real 
estate foreign state.''
Section 802.215--Excepted Real Estate Investor
    The proposed rule set forth a definition of ``excepted real estate 
investor,'' taking into account increasingly complex ownership 
structures and accounting for such structures in the application of the 
Committee's jurisdiction. With respect to the criteria to qualify as an 
excepted real estate investor, commenters discussed the board 
composition requirement, noting that it was limiting and suggested 
changes. Commenters also sought additional clarity regarding the 
process to be considered an excepted real estate investor, including 
how an excepted real estate investor can prove that status, or whether 
an excepted real estate investor would receive a form or certificate 
from the Committee establishing that status. Other commenters suggested 
that the Committee adopt a parallel category to excepted real estate 
investor, which some termed ``excepted trusted real estate investor,'' 
that would allow certain investors who are not connected to an excepted 
real estate foreign state to receive the benefits of being an excepted 
real estate investor. A commenter suggested various criteria for this 
concept, including the individual investor's previous interactions with 
the Committee.
    In response to these comments and similar comments received on the 
part 800 proposed rule, the rule modifies the definition of ``excepted 
real estate investor.'' First, the board member nationality criterion 
is revised to allow up to 25 percent representation by foreign 
nationals of foreign states that are not excepted real estate foreign 
states. Second, the percentage ownership limit for an individual 
investor in an excepted real estate investor is revised from five to 10 
percent. Third, the definition of ``minimum excepted ownership'' under 
Sec.  802.228 is revised as discussed below.
    The rule does not make other changes in response to the comments. 
All of the conditions under Sec.  802.215(a)(3), including the minimum 
excepted ownership conditions, apply to each parent (as defined at 
Sec.  802.229) of the foreign person. There is no separate process for 
the Committee to provide a determination for a prospective investor on 
whether it qualifies as an excepted real estate investor. As with other 
jurisdictional determinations, parties themselves should assess whether 
they qualify as excepted real estate investors. It is important to note 
that not qualifying as an excepted real estate investor should not be 
interpreted as an individualized assessment that the particular foreign 
person poses a threat to national security.
    Consistent with FIRRMA, the ``excepted real estate investor'' 
definition focuses on the investor's connection to an excepted real 
estate foreign state, which provides the greatest clarity to the 
business and investment communities while protecting national security 
interests. Such a definition also furthers the Committee's efforts to 
encourage partner countries to implement robust processes to review 
foreign investment in their countries and increase cooperation with the 
United States. Notably, the excepted real estate investor definition 
eliminates

[[Page 3163]]

Committee jurisdiction for specified real estate transactions by 
certain investors. Therefore, some criteria suggested by commenters as 
part of the ``excepted trusted real estate investor'' concept are less 
suitable for determining jurisdiction and more suitable for other 
issues, such as certain aspects of the part 800 rule relating to 
mandatory declarations.
    Finally, the rule revises Sec.  802.215(b) to specify when the 
ownership interests of separate foreign persons will be aggregated for 
the purposes of Sec.  802.215(a)(3)(iv). The rule also modifies Sec.  
802.215(d) to include the criteria in Sec.  802.215(c)(1)(i) through 
(iii) in order to retain jurisdiction over certain transactions where 
the foreign investor is deemed not to be an excepted real estate 
investor subsequent to the transaction due to action by the President 
under section 721, or enforcement by the Committee of violations under 
this part, parts 800 or 801, or section 721.
Section 802.216--Excepted Real Estate Transaction
    The proposed rule defined ``excepted real estate transaction'' by 
listing specific types of transactions that are not covered real estate 
transactions, as well as examples. Some commenters sought clarification 
with respect to when the acquisition of commercial real estate 
constitutes the acquisition of a U.S. business. Some commenters 
suggested broadening certain exceptions. A couple of these comments 
noted the application of the rule in the airport context and suggested 
broadening the exception for retail trade, accommodation, and food 
service sector establishments, as well as excepting foreign air carrier 
leasing arrangements. One commenter sought clarification on the 
exception related to commercial space and whether 10 percent of tenants 
should be determined by the number of leaseholders or by the number of 
employee-occupants in the commercial space. Another commenter suggested 
excluding certain shore-based and offshore areas and structures.
    The rule is revised in response to certain of the comments. First, 
the rule adds an exception for ``foreign air carriers,'' as defined in 
49 U.S.C. 40102, to the extent that the lease or concession is related 
to the foreign person's activities as a foreign air carrier, and for 
whom the Department of Homeland Security's Transportation Security 
Administration has accepted a security program under 49 CFR 1546.105. 
This exception was added in light of the Department of Homeland 
Security's existing oversight with respect to foreign air carriers. 
Second, the rule revises the exception for retail trade, accommodation, 
and food service sector establishments by eliminating the reference to 
the North American Industry Classification System codes and instead 
applying the exception to leases and concessions of real estate that 
may be used only for the purposes of engaging in the retail sale of 
consumer goods or services to the public. This revision provides a 
broader exception for retail services as compared to the proposed rule, 
with respect to, for example, car rental and parking. Finally, the rule 
clarifies through the text of Sec.  802.216(f) and illustrates through 
a new example that the exception related to commercial space in a 
building is based on the number of parties that own, lease or have a 
concession to the commercial space in the building.
    The rule makes other clarifying edits to this section, including in 
the illustrative examples. Changes were not made in this section in 
response to the comment regarding certain shore-based and offshore 
areas and structures based on a balancing of various considerations.
Section 802.217--Extended Range
    The proposed rule defined the ``extended range'' to mean the area 
that extends 99 miles outward from the outer boundary of close 
proximity of certain military installations, but, where applicable, no 
more than 12 nautical miles seaward of the coastline of the United 
States. Commenters sought to understand the rationale behind the 
specific distance set in the regulations and the interaction with the 
exception under Sec.  802.216(c) for urbanized areas and urban 
clusters.
    The rule makes no change to the proposed definition of ``extended 
range'' in response to the comments. The particular military 
installations listed in the appendix and the covered distances defined 
in the regulations were determined by the Department of Defense based 
upon an evaluation of national security considerations. The Department 
of Defense will continue on an ongoing basis to assess its military 
installations and the geographic scope set under the rule to ensure 
appropriate application in light of national security considerations. 
The rule does replace the reference to 12 nautical miles with a 
reference to the territorial sea. As noted above in the definition of 
``covered real estate,'' the Treasury Department has determined that a 
reference to the territorial sea will be more useful to the public as a 
geographic reference.
Section 802.224--Investment Fund
    The rule adds a definition for investment fund that conforms to the 
term used in the part 800 rule. This term was added in part 802 to 
provide clarity with respect to the new interim definition of 
``principal place of business.''
Section 802.226--Lease
    The definition of ``lease'' is modified in the rule to clarify that 
the term includes assignments in whole or part.
Section 802.228--Minimum Excepted Ownership
    To conform with changes to part 800, in response to comments 
received on specific provisions of that separate rulemaking, the rule 
amends the text of Sec.  802.228 by revising the minimum excepted 
ownership percentage in Sec.  802.228(b) from 90 to 80 percent.
Section 802.229--Parent
    To conform with changes to part 800, in response to comments 
received on that separate rulemaking, the rule adds a provision at 
Sec.  802.229(a)(2) that explicitly includes a general partner, 
managing member, or equivalent of an entity within the definition of 
``parent.'' The rule also makes some minor technical edits and adds an 
example illustrating an entity with more than one parent.
Section 802.233--Property Right
    The proposed rule included as an element of a covered real estate 
transaction that certain ``property rights'' be afforded to the foreign 
person through the purchase, lease, or concession of covered real 
estate. The rule adds examples under this definition. The first example 
illustrates that the right to exclude others from physically accessing 
the property need not be absolute with respect to all other persons or 
activities. The second example illustrates that a right is afforded, 
even if it is not exercisable until a separate regulatory approval is 
received.
Section 802.238--United States
    The rule revises the definition of ``United States'' for 
consistency with the definition in FIRRMA.
Section 802.241--U.S. Business
    The proposed rule defined ``U.S. business'' to conform to the 
definition in FIRRMA. Commenters to the proposed rule for part 800 
requested clarity with respect to the Committee's intended 
interpretation of the term U.S. business. Consistent with the 
concurrent rulemaking finalizing part

[[Page 3164]]

800, the rule makes no change to the proposed definition of ``U.S. 
business.'' The proposed definition tracks the language of FIRRMA and 
is not intended to suggest that the extent of a business's activities 
in interstate commerce in the United States is irrelevant to the 
Committee's analysis of national security risk.
Section 802.244--Voting Interest
    The proposed rule provided a definition for the term ``voting 
interest.'' One commenter sought clarification of the term and whether 
it includes consent, veto, right to appoint a board member (without a 
shareholder vote), or other special rights. The commenter also 
suggested the term be limited to voting interests in major decisions. 
Similar comments were made on this provision in the part 800 rule.
    The rule makes no change in response to the comments. The 
definition of ``voting interest'' is long-established, and, any 
revisions will have wide-ranging effects throughout the part 802 and 
part 800 regulations because voting interest is incorporated into other 
defined terms, such as parent. Where appropriate, the Treasury 
Department provided clarification through revisions to the part 800 
rule.
3. Subpart C--Coverage
Section 802.302--Transactions That Are Not Covered Real Estate 
Transactions
    One commenter requested a sample list of transactions that are not 
covered real estate transactions. The commenter provided examples and 
noted its understanding that such scenarios would not be covered real 
estate transactions because they would not meet the criteria under the 
rule if a foreign person were an investor.
    No change was made to this section in response to this comment 
because whether a particular type of transaction is covered by the rule 
is determined by the particular facts and circumstances. This section 
was revised for clarity by streamlining the provisions and removing an 
example.
Section 802.303--Lending Transactions
    The proposed rule discussed lending transactions at Sec.  802.303, 
which include commercial mortgages. While a lending transaction 
generally shall not, by itself, constitute a covered real estate 
transaction, the proposed rule discussed factors that CFIUS will 
consider in determining whether the lending transaction is a covered 
real estate transaction. One commenter requested language be added that 
would except from CFIUS jurisdiction lenders who take possession of 
property in foreclosure and put the property back on the market a short 
period of time later. No change was made to this section in response to 
this comment because an assessment of the particular facts and 
circumstances would be needed to determine whether national security 
concerns arise from the transaction. The proposed rule noted the 
factors the Committee will consider with respect to whether a default 
under a lending transaction would afford the foreign person the 
property rights defined in the proposed rule. In determining whether to 
accept a declaration or notice, the Committee also will consider the 
immediacy or occurrence of the default or other condition. The rule 
makes clarifying revisions in this section including incorporating the 
change in rights construct to paragraph (a)(1) and consideration of 
whether the foreign person had made arrangements to transfer the 
ownership or property rights to an excepted real estate investor under 
paragraph (a)(2).
4. Subpart D--Declarations
    The proposed rule, in subpart D, set out an abbreviated filing 
process through the submission of a declaration.
Section 802.401--Procedures for Declarations
    A commenter expressed concern about having public entities, such as 
airports, submit declarations or file notices. No change was made to 
this section in response to this comment. The Treasury Department has 
attempted to minimize the burden of this rule on U.S. public entities, 
particularly where the counterparty has the relevant information to 
submit a notice or file a declaration.
Section 802.402--Contents of Declarations
    The rule modifies this section to require additional information 
including to allow the Committee to more efficiently assess whether a 
transaction falls under its jurisdiction for real estate transactions. 
The rule requires a brief description of whether the transaction is 
part of a larger project undertaken by the foreign person, and whether 
the foreign person is acquiring a collection of assets or interest in 
an entity. This information will help the Committee better determine 
whether there is a U.S. business that is the subject of the 
transaction. Additionally, this section is revised to require parties 
to provide a brief description of any U.S. Government leases involved 
in the transaction. With respect to the foreign person and its 
affiliates, the final rule further clarifies what relevant address 
information should be included in a declaration. Finally, the rule 
requires that parties provide additional information about the 
transaction such as any applicable term, current physical security of 
premises, and distance to covered port(s) or military installation(s) 
relevant to CFIUS's geographic coverage under the rule.
Section 802.405--Committee Actions
    The rule clarifies that the Committee may request that parties file 
a written notice under subpart E if it has reason to believe that the 
transaction may raise national security considerations.
5. Subpart E--Notices
    The rule makes revisions to Sec.  802.502(b) similar to the 
revisions discussed above under Sec.  802.402, and makes other 
clarifying edits.
6. Subpart I--Penalties and Damages
    The proposed rule set out the penalty provisions, at subpart I. A 
number of clarifying and technical edits were made to this subpart. 
Additionally, the rule revises Sec.  802.901(e) to allow tolling of the 
Committee's deadline to respond to a petition, upon written agreement 
with the party, to facilitate further negotiations, including for 
settlement of the potential civil monetary penalty.
7. Appendix A
    The appendix to the proposed rule identified bases, ranges, and 
other installations that meet the definition of ``military 
installation'' at Sec.  802.227, and, as applicable, related counties 
or other geographic areas throughout the United States that are covered 
real estate for the purposes of this part. A commenter sought 
additional information about whether, and how, appendix A will be 
revised in the future. The Treasury Department anticipates updating 
appendix A, as appropriate, through notices published in the Federal 
Register.
    The rule includes revisions to appendix A to remove one site and to 
further refine the geographic areas covered in connection with the 
sites listed at part 3 of the appendix.
8. Other Comments
    The Treasury Department received several comments that did not 
address any specific provision of the rule. For example, one commenter 
sought guidance from the Committee on when parties should submit a 
declaration rather than file a notice. Such advice is beyond the 
purview of this rule; whether a party files a notice or submits a 
declaration will depend on many

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factors specific to the party and to the transaction.

IV. Rulemaking Requirements

Executive Order 12866

    These regulations are not subject to the general requirements of 
Executive Order 12866, which governs review of regulations by the 
Office of Information and Regulatory Affairs (OIRA) in the Office of 
Management and Budget (OMB), because they relate to a foreign affairs 
function of the United States, pursuant to section 3(d)(2) of that 
order. In addition, these regulations are not subject to review under 
section 6(b) of Executive Order 12866 pursuant to section 7(c) of the 
April 11, 2018 Memorandum of Agreement between the Treasury Department 
and OMB, which states that CFIUS regulations are not subject to OMB's 
standard centralized review process under Executive Order 12866.

Justification for Interim Rule

    The proposed rule, and the proposed rule for part 800 at 84 FR 
50174, included provisions that use the term ``principal place of 
business.'' The Treasury Department received comments on these 
provisions, including recommendations to add a definition for the term.
    In response to these comments, a definition for ``principal place 
of business'' has been included. The Treasury Department believes it 
would benefit the public and the Committee to receive comments from the 
public on this definition before it is made final. This rule therefore 
contains an interim rule that implements a definition for the term 
``principal place of business'' that will become effective with the 
rest of the rule, and the Treasury Department is providing the public 
30 days to comment on the new definition of ``principal place of 
business.''
    It is in the public interest to make the ``principal place of 
business'' definition effective on the same date as the rule. 
Commenters requested greater clarity concerning which parties are 
subject to CFIUS jurisdiction. The new definition directly addresses 
those requests and provides greater transactional certainty. By 
clarifying that certain transactions are not subject to CFIUS 
jurisdiction, the addition of the definition of ``principal place of 
business'' reduces the regulatory burden on the public, allowing some 
parties to forego the expense, time, and uncertainty involved in 
submitting a declaration or filing a notice with the Committee. Because 
of the added clarity and potential reduction in regulatory burden the 
definition provides to the public, having it become effective 
immediately is in the public's interest. Nonetheless, the Treasury 
Department is requesting comments to that definition and will consider 
them before finalizing the interim rule.

Paperwork Reduction Act

    The collections of information contained in this rule were 
submitted to OMB for review along with the proposed rule, in accordance 
with the Paperwork Reduction Act of 1995 (PRA, 44 U.S.C. 3507(d)). No 
comments were received to the PRA estimates. However, and as noted 
above, the Treasury Department has modified some of the information 
requests associated with notices and on the declarations form. These 
changes represent clarifications that the Treasury Department 
identified in its review of the information requirements, as well as 
changes necessary to implement certain provisions that were modified 
from the proposed rule. The additional information requested is not 
substantially different from the information that was proposed to be 
collected, and the Treasury Department's estimates of burden hours for 
completing declarations and notices do not differ from those estimated 
at the proposed rule stage. These collections have been submitted to 
OMB under control number 1505-0121.
    Under the PRA, 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 OMB.

Regulatory Flexibility Act

    Regardless of whether the provisions of the Regulatory Flexibility 
Act (RFA, 5 U.S.C. 601 et seq.), apply to this rulemaking, for reasons 
noted in the preamble to the proposed rule, the Treasury Department 
prepared for public comment an Initial Regulatory Flexibility Analysis 
and determined through that analysis that the proposed rule would most 
likely not affect a substantial number of small entities. The Treasury 
Department specifically requested comments on the proposed rule's 
effect on small entities; no such public comments were received. The 
Secretary of the Treasury hereby certifies that the rule will not have 
a significant economic impact on a substantial number of small 
entities, based on the following reasons.
    The rule expands the jurisdiction of the Committee to review the 
purchase or lease by, or concession to, a foreign person of certain 
real estate in the United States. Accordingly, the rule may impact any 
U.S. business, including a small U.S. business, that engages in a 
covered real estate transaction.
    There is no single source for information on the number of small 
U.S. businesses that would be involved in some way in the purchase or 
lease by, or concession to a foreign person of real estate that could 
be covered under this rule. However, the Treasury Department 
anticipates only 350 real estate transactions, out of the thousands or 
more of the annual number of real estate transactions in the United 
States, will be the subject of a declaration or notice of a covered 
real estate transaction. Even if each of these 350 transactions 
involved a small U.S. business, based on past experience it is likely 
that only a small, and not significant, percentage of those anticipated 
350 real estate transactions will incur impacts, such as incurring 
additional costs through mitigation or action by the President.
    Additionally, the Treasury Department also has taken steps to 
reduce the burden of this rule on small entities. For example, in 
addition to filing notices of transactions with the Committee, the rule 
allows parties to submit shorter declarations to the Committee using an 
online fillable form. Also, the Committee anticipates making available 
a free, web-based tool to help the public understand the geographic 
coverage of the rule. As noted above, in the meantime, information 
relevant to certain aspects of the rule is available online. These 
tools should help reduce compliance costs for small entities.

Congressional Review Act

    This rule has been submitted to OIRA, which has determined that the 
rule is a ``major'' rule under the Congressional Review Act (CRA). 
However, the Treasury Department has determined there is good cause 
under 5 U.S.C. 808(2) to publish the rule notwithstanding the timing 
requirements for major rules under 5 U.S.C. 801(a)(3) because delaying 
the effectiveness of this rule beyond 30 days is impracticable, 
unnecessary, and contrary to the public interest. Under FIRRMA, the 
provisions expanding jurisdiction over real estate transactions and 
establishing declarations, among others, will become effective on 
February 13, 2020, regardless of whether this rule is published and 
effective. See Section 1727(b)(1)(A) of FIRRMA. Without the processes, 
procedures and definitions provided by the rule as directed by FIRRMA, 
market participants will face substantial hardship, delay, and expense 
in complying with the requirements of

[[Page 3166]]

FIRRMA. Accordingly, the Treasury Department finds good cause that 
notice and public procedure under 5 U.S.C. 801(a)(3) are impracticable, 
unnecessary, and contrary to the public interest. This rule will become 
effective on February 13, 2020, notwithstanding 5 U.S.C. 801(a)(3).

List of Subjects in 31 CFR Part 802

    Foreign investments in the United States, Federal buildings and 
facilities, Government property, Investigations, Investments, 
Investment companies, Land sales, National defense, Public lands, Real 
property acquisition, Reporting and recordkeeping requirements.


0
For the reasons set forth in the preamble, the Treasury Department adds 
part 802 to title 31 of the Code of Federal Regulations to read as 
follows:

PART 802--REGULATIONS PERTAINING TO CERTAIN TRANSACTIONS BY FOREIGN 
PERSONS INVOLVING REAL ESTATE IN THE UNITED STATES

Subpart A--General
Sec.
802.101 Scope.
802.102 Risk-based analysis.
802.103 Effect on other law.
802.104 Applicability rule.
802.105 Rules of construction and interpretation.
Subpart B--Definitions
802.201 Business day.
802.202 Certification.
802.203 Close proximity.
802.204 Committee; Chairperson of the Committee; Staff Chairperson.
802.205 Completion date.
802.206 Concession.
802.207 Contingent equity interest.
802.208 Control.
802.209 Conversion.
802.210 Covered port.
802.211 Covered real estate.
802.212 Covered real estate transaction.
802.213 Entity.
802.214 Excepted real estate foreign state.
802.215 Excepted real estate investor.
802.216 Excepted real estate transaction.
802.217 Extended range.
802.218 Foreign entity.
802.219 Foreign government.
802.220 Foreign national.
802.221 Foreign person.
802.222 Hold.
802.223 Housing unit.
802.224 Investment fund.
802.225 Lead agency.
802.226 Lease.
802.227 Military installation.
802.228 Minimum excepted ownership.
802.229 Parent.
802.230 Party to a transaction.
802.231 Person.
802.232 Principal place of business.
802.233 Property right.
802.234 Purchase.
802.235 Real estate.
802.236 Section 721.
802.237 Transaction.
802.238 United States.
802.239 Urban cluster.
802.240 Urbanized area.
802.241 U.S. business.
802.242 U.S. national.
802.243 U.S. public entity.
802.244 Voting interest.
Subpart C--Coverage
802.301 Transactions that are covered real estate transactions.
802.302 Transactions that are not covered real estate transactions.
802.303 Lending transactions.
802.304 Timing rule for a contingent equity interest.
Subpart D--Declarations
802.401 Procedures for declarations.
802.402 Contents of declarations.
802.403 Beginning of 30-day assessment period.
802.404 Rejection, disposition, or withdrawal of declarations.
802.405 Committee actions.
Subpart E--Notices
802.501 Procedures for notices.
802.502 Contents of voluntary notices.
802.503 Beginning of 45-day review period.
802.504 Deferral, rejection, or disposition of certain voluntary 
notices.
802.505 Determination of whether to undertake an investigation.
802.506 Determination not to undertake an investigation.
802.507 Commencement of investigation.
802.508 Completion or termination of investigation and report to the 
President.
802.509 Withdrawal of notices.
Subpart F--Committee Procedures
802.601 General.
802.602 Role of the Secretary of Labor.
802.603 Materiality.
802.604 Tolling of deadlines during lapse in appropriations.
Subpart G--Finality of Action
802.701 Finality of actions under section 721.
Subpart H--Provision and Handling of Information
802.801 Obligation of parties to provide information.
802.802 Confidentiality.
Subpart I--Penalties and Damages
802.901 Penalties and damages.
802.902 Effect of lack of compliance.
Subpart J--Foreign National Security Investment Review Regimes
802.1001 Determinations.
802.1002 Effect of determinations.
Appendix A to Part 802--List of Military Installations and Other 
U.S. Government Sites

    Authority:  50 U.S.C. 4565; E.O. 11858, as amended, 73 FR 4677.

Subpart A--General


Sec.  802.101   Scope.

    (a) Section 721 of title VII of the Defense Production Act of 1950, 
as amended (50 U.S.C. 4565) authorizes the Committee on Foreign 
Investment in the United States to review transactions involving real 
estate that meet specified criteria, which are referred to in this part 
as ``covered real estate transactions'' and defined at Sec.  802.212, 
and to mitigate any risk to the national security of the United States 
that arises as a result of such transactions. Section 721 also 
authorizes the President to suspend or prohibit any covered real estate 
transaction when, in the President's judgment, there is credible 
evidence that leads the President to believe that the foreign person 
engaging in a covered real estate transaction might take action that 
threatens to impair the national security of the United States, and 
when provisions of law other than section 721 and the International 
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) do not, in the 
judgment of the President, provide adequate and appropriate authority 
for the President to protect the national security of the United States 
in the matter before the President.
    (b) This part implements regulations pertaining to covered real 
estate transactions. Regulations pertaining to ``covered transactions'' 
are addressed in part 800 of this chapter.


Sec.  802.102   Risk-based analysis.

    Any determination of the Committee with respect to a covered real 
estate transaction, to suspend, refer to the President, or to 
negotiate, enter into or impose, or enforce any agreement or condition 
under section 721 shall be based on a risk-based analysis, conducted by 
the Committee, of the effects on the national security of the United 
States of the covered real estate transaction. Any such risk-based 
analysis shall include credible evidence demonstrating the risk and an 
assessment of the threat, vulnerabilities, and consequences to national 
security related to the transaction. For purposes of this part, any 
such analysis of risk shall include and be informed by consideration of 
the following elements:
    (a) The threat, which is a function of the intent and capability of 
a foreign person to take action to impair the national security of the 
United States;
    (b) The vulnerabilities, which are the extent to which the nature 
of the covered real estate presents susceptibility to impairment of 
national security; and

[[Page 3167]]

    (c) The consequences to national security, which are the potential 
effects on national security that could reasonably result from the 
exploitation of the vulnerabilities by the threat actor.


Sec.  802.103   Effect on other law.

    Nothing in this part shall be construed as altering or affecting 
any other authority, process, regulation, investigation, enforcement 
measure, or review provided by or established under any other provision 
of federal law, including the International Emergency Economic Powers 
Act, or any other authority of the President or the Congress under the 
Constitution of the United States.


Sec.  802.104   Applicability rule.

    (a) Except as provided in paragraph (b) of this section and 
otherwise in this part, the regulations in this part apply from 
February 13, 2020.
    (b) The regulations in this part do not apply to any transaction 
for which:
    (1) The completion date is prior to February 13, 2020; or
    (2) The parties to the transaction have executed, prior to February 
13, 2020, a binding written agreement, or other binding document, 
establishing the material terms of the transaction.


Sec.  802.105   Rules of construction and interpretation.

    (a) The examples included in this part are provided for 
informational purposes and should not be construed to alter the meaning 
of the text of the regulations in this part.
    (b) As used in this part, the term ``including'' means ``including 
but not limited to.''

Subpart B--Definitions


Sec.  802.201   Business day.

    The term business day means Monday through Friday, except the legal 
public holidays specified in 5 U.S.C. 6103, any day declared to be a 
holiday by federal statute or executive order, or any day with respect 
to which the U.S. Office of Personnel Management has announced that 
Federal agencies in the Washington, DC, area are closed. For purposes 
of calculating any deadline imposed by this part triggered by the 
submission of a party to a transaction under Sec.  802.501(i), any 
submissions received after 5 p.m. Eastern Time are deemed to be 
submitted on the next business day.

    Note 1 to Sec.  802.201:  See Sec.  802.604 regarding the 
tolling of deadlines during a lapse in appropriations.

Sec.  802.202   Certification.

    (a) The term certification means a written statement signed by the 
chief executive officer or other duly authorized designee of a party 
filing a notice, declaration, or information, certifying under the 
penalties provided in the False Statements Accountability Act of 1996, 
as amended (18 U.S.C. 1001) that the notice, declaration, or 
information filed:
    (1) Fully complies with the requirements of section 721, the 
regulations in this part, and any agreement or condition entered into 
with the Committee or any member of the Committee, and
    (2) Is accurate and complete in all material respects, as it 
relates to:
    (i) The transaction; and
    (ii) The party providing the certification, including its parents, 
subsidiaries, and any other related entities described in the notice, 
declaration, or information.
    (b) For purposes of this section, a duly authorized designee is:
    (1) In the case of a partnership, any general partner thereof;
    (2) In the case of a corporation, any officer or director thereof;
    (3) In the case of any entity lacking partners, officers, and 
directors, any individual within the organization exercising executive 
functions similar to those of a general partner of a partnership or an 
officer or director of a corporation; and
    (4) In the case of an individual, such individual or his or her 
legal representative.
    (c) In each case described in paragraphs (b)(1) through (4) of this 
section, such designee must possess actual authority to make the 
certification on behalf of the party filing a notice, declaration, or 
information.

    Note 1 to Sec.  802.202:  A sample certification may be found at 
the Committee's section of the Department of the Treasury website. 
See Sec. Sec.  802.402(f) and 802.502(k) regarding filing procedures 
for transactions in which a U.S. public entity is a party to the 
transaction.

Sec.  802.203   Close proximity.

    The term close proximity means, with respect to a military 
installation or another facility or property of the U.S. Government 
identified in this part, the area that extends outward one mile from 
the boundary of such military installation, facility, or property.


Sec.  802.204   Committee; Chairperson of the Committee; Staff 
Chairperson.

    The term Committee means the Committee on Foreign Investment in the 
United States. The Chairperson of the Committee is the Secretary of the 
Treasury. The Staff Chairperson of the Committee is the Department of 
the Treasury official so designated by the Secretary of the Treasury or 
by the Secretary's designee.


Sec.  802.205   Completion date.

    The term completion date means, with respect to a transaction, the 
earliest date upon which the purchase, lease, or concession is made 
legally effective, or a change in rights that could result in a covered 
real estate transaction occurs.

    Note 1 to Sec.  802.205:  See Sec.  802.304 regarding the timing 
rule for a contingent equity interest.

Sec.  802.206   Concession.

    The term concession means an arrangement, other than a purchase or 
lease, whereby a U.S. public entity grants a right to use real estate 
for the purpose of developing or operating infrastructure for a covered 
port. This term includes the assignment of a concession, in whole or in 
part, by the party who is not the U.S. public entity.


Sec.  802.207   Contingent equity interest.

    The term contingent equity interest means a financial instrument 
that currently does not constitute an equity interest but is 
convertible into, or provides the right to acquire, an equity interest 
upon the occurrence of a contingency or defined event.


Sec.  802.208   Control.

    (a) The term control means the power, direct or indirect, whether 
or not exercised, through the ownership of a majority or a dominant 
minority of the total outstanding voting interest in an entity, board 
representation, proxy voting, a special share, contractual 
arrangements, formal or informal arrangements to act in concert, or 
other means, to determine, direct, or decide important matters 
affecting an entity; in particular, but without limitation, to 
determine, direct, take, reach, or cause decisions regarding the 
following matters, or any other similarly important matters affecting 
an entity:
    (1) The sale, lease, mortgage, pledge, or other transfer of any of 
the tangible or intangible principal assets of the entity, whether or 
not in the ordinary course of business;
    (2) The reorganization, merger, or dissolution of the entity;
    (3) The closing, relocation, or substantial alteration of the 
production, operational, or research and development facilities of the 
entity;
    (4) Major expenditures or investments, issuances of equity or debt, 
or dividend payments by the entity, or approval of the operating budget 
of the entity;

[[Page 3168]]

    (5) The selection of new business lines or ventures that the entity 
will pursue;
    (6) The entry into, termination, or non-fulfillment by the entity 
of significant contracts;
    (7) The policies or procedures of the entity governing the 
treatment of non-public technical, financial, or other proprietary 
information of the entity;
    (8) The appointment or dismissal of officers or senior managers or, 
in the case of a partnership, the general partner;
    (9) The appointment or dismissal of employees with access to 
critical technology or other sensitive technology or classified U.S. 
Government information; or
    (10) The amendment of the Articles of Incorporation, constituent 
agreement, or other organizational documents of the entity with respect 
to the matters described in paragraphs (a)(1) through (9) of this 
section.
    (b) In examining questions of control in situations where more than 
one foreign person has an ownership interest in an entity, 
consideration will be given to factors such as whether the foreign 
persons are related or have formal or informal arrangements to act in 
concert, whether they are agencies or instrumentalities of the national 
or subnational governments of a single foreign state, and whether a 
given foreign person and another person that has an ownership interest 
in the entity are both controlled by any of the national or subnational 
governments of a single foreign state.
    (c) The following minority shareholder protections shall not in 
themselves be deemed to confer control over an entity:
    (1) The power to prevent the sale or pledge of all or substantially 
all of the assets of an entity or a voluntary filing for bankruptcy or 
liquidation;
    (2) The power to prevent an entity from entering into contracts 
with majority investors or their affiliates;
    (3) The power to prevent an entity from guaranteeing the 
obligations of majority investors or their affiliates;
    (4) The right to purchase an additional interest in an entity to 
prevent the dilution of an investor's pro rata interest in that entity 
in the event that the entity issues additional instruments conveying 
interests in the entity;
    (5) The power to prevent the change of existing legal rights or 
preferences of the particular class of stock held by minority 
investors, as provided in the relevant corporate documents governing 
such shares; and
    (6) The power to prevent the amendment of the Articles of 
Incorporation, constituent agreement, or other organizational documents 
of an entity with respect to the matters described in paragraphs (c)(1) 
through (5) of this section.
    (d) The Committee will consider, on a case-by-case basis, whether 
minority shareholder protections other than those listed in paragraph 
(c) of this section do not confer control over an entity.

    Note 1 to Sec.  802.208:  This definition is included herein for 
the purpose of determining whether a foreign person may be involved 
in a covered real estate transaction. For additional information, 
see the examples provided at Sec.  800.208, as relevant.

Sec.  802.209   Conversion.

    The term conversion means the exercise of a right inherent in the 
ownership or holding of a particular financial instrument to exchange 
any such instrument for an equity interest.


Sec.  802.210   Covered port.

    (a) The term covered port means, subject to paragraph (b) of this 
section, any port that is listed:
    (1) In the Department of Transportation, Federal Aviation 
Administration's annual final enplanement data as a ``large hub 
airport,'' as that term is defined in 49 U.S.C. 40102;
    (2) In the Department of Transportation, Federal Aviation 
Administration's annual final all-cargo landed weight data as an 
airport with annual aggregate all-cargo landed weight greater than 1.24 
billion pounds;
    (3) By the Department of Transportation, Federal Aviation 
Administration as a ``joint use airport,'' as that term is defined in 
49 U.S.C. 47175;
    (4) By the Department of Transportation, Maritime Administration as 
a commercial strategic seaport within the National Port Readiness 
Network; or
    (5) By the Department of Transportation, Bureau of Transportation 
Statistics as a top 25 tonnage, container, or dry bulk port.
    (b) For purposes of determining whether a port constitutes a 
covered port under paragraph (a) of this section,
    (1) Any port that is added after February 13, 2020 to any of the 
lists described in paragraph (a) of this section shall be deemed not to 
be in effect as a covered port until 30 days after the port's addition 
to the relevant list maintained by the Department of Transportation; 
and
    (2) In the context of a particular transaction, the covered ports 
in effect on the day immediately prior to, the earlier of, the date on 
which the parties sign a written document establishing the material 
terms of the transaction, or the completion date of the transaction, 
shall apply.

    Note 1 to Sec.  802.210:  The lists described in paragraph (a) 
of this section are published on the Department of Transportation 
website.

Sec.  802.211   Covered real estate.

    The term covered real estate means real estate that:
    (a) Is, is located within, or will function as part of, a covered 
port; or
    (b) Is located within:
    (1) Close proximity of any military installation described in Sec.  
802.227(b) to (o), or another facility or property of the U.S. 
Government, in each case as identified in the list at part 1 or part 2 
of appendix A to this part;
    (2) The extended range of any military installation described in 
Sec.  802.227(h), (k), or (m), as identified in the list at part 2 of 
appendix A to this part;
    (3) Any county or other geographic area identified in connection 
with any military installation described in Sec.  802.227(a), as 
identified in the list at part 3 of appendix A to this part; or
    (4) Any part of a military installation described in Sec.  
802.227(p), as identified at part 4 of appendix A to this part, to the 
extent located within the limits of the territorial sea of the United 
States.


Sec.  802.212   Covered real estate transaction.

    The term covered real estate transaction means:
    (a) Other than an excepted real estate transaction, any purchase or 
lease by, or concession to, a foreign person of covered real estate, 
that affords the foreign person at least three of the property rights 
under Sec.  802.233;
    (b) Other than an excepted real estate transaction, any purchase or 
lease by, or concession to, a foreign person of covered real estate, 
that, through a subsequent change in the rights that a foreign person 
has with respect to that covered real estate, results in the foreign 
person having at least three of the property rights under Sec.  
802.233; or
    (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 as it relates to real estate transactions.

    Note 1 to Sec.  802.212:  Any transaction, transfer, agreement, 
or arrangement described in this section that arises pursuant to a 
bankruptcy proceeding or other form of default on debt is a covered 
real estate transaction. See also Sec.  802.303 for the treatment of 
certain lending transactions.


[[Page 3169]]




Sec.  802.213   Entity.

    The term entity means any branch, partnership, group or sub-group, 
association, estate, trust, corporation or division of a corporation, 
or organization (whether or not organized under the laws of any State 
or foreign state); assets (whether or not organized as a separate legal 
entity) operated by any one of the foregoing as a business undertaking 
in a particular location or for particular products or services; and 
any government (including a foreign national or subnational government, 
the U.S. Government, a subnational government within the United States, 
and any of their respective departments, agencies, or 
instrumentalities).


Sec.  802.214   Excepted real estate foreign state.

    The term excepted real estate foreign state means, until February 
13, 2022, a foreign state that meets the criteria in paragraph (a) of 
this section, and beginning on February 13, 2022, a foreign state that 
meets both the criteria in paragraphs (a) and (b) of this section:
    (a) Is identified by the Committee as an eligible foreign state and
    (b) Is a foreign state for which the Committee has made a 
determination under Sec.  802.1001(a).

    Note 1 to Sec.  802.214:  The name of each foreign state 
identified by the Committee as an eligible foreign state will be 
available at the Committee's section of the Department of the 
Treasury website. See Sec.  802.1001(c) regarding the publication of 
a notice in the Federal Register of a determination under Sec.  
802.1001(a). The list of excepted real estate foreign states will 
also be available at the Committee's section of the Department of 
the Treasury website.

Sec.  802.215   Excepted real estate investor.

    (a) The term excepted real estate investor means a foreign person 
who is, as of the completion date of the transaction and subject to 
paragraphs (c) and (d) of this section:
    (1) A foreign national who is a national of one or more excepted 
real estate foreign states and is not also a national of any foreign 
state that is not an excepted real estate foreign state;
    (2) A foreign government of an excepted real estate foreign state; 
or
    (3) A foreign entity that meets each of the following conditions 
with respect to itself and each of its parents (if any):
    (i) Such entity is organized under the laws of an excepted real 
estate foreign state or in the United States;
    (ii) Such entity has its principal place of business in an excepted 
real estate foreign state or in the United States;
    (iii) Seventy-five percent or more of the members and 75 percent or 
more of the observers of the board of directors or equivalent governing 
body of such entity are:
    (A) U.S. nationals; or
    (B) Nationals of one or more excepted real estate foreign states 
who are not also nationals of any foreign state that is not an excepted 
real estate foreign state;
    (iv) Any foreign person that individually, and each foreign person 
that is part of a group of foreign persons that in the aggregate, holds 
10 percent or more of the outstanding voting interest of such entity; 
holds the right to 10 percent or more of the profits of such entity; 
holds the right in the event of dissolution to 10 percent or more of 
the assets of such entity; or otherwise could exercise control over 
such entity, is:
    (A) A foreign national who is a national of one or more excepted 
real estate foreign states and is not also a national of any foreign 
state that is not an excepted real estate foreign state;
    (B) A foreign government of an excepted real estate foreign state; 
or
    (C) A foreign entity that is organized under the laws of an 
excepted real estate foreign state and has its principal place of 
business in an excepted real estate foreign state or in the United 
States; and
    (v) The minimum excepted ownership of such entity is held, 
individually or in the aggregate, by one or more persons each of whom 
is:
    (A) Not a foreign person;
    (B) A foreign national who is a national of one or more excepted 
real estate foreign states and is not also a national of any foreign 
state that is not an excepted real estate foreign state;
    (C) A foreign government of an excepted real estate foreign state; 
or
    (D) A foreign entity that is organized under the laws of an 
excepted real estate foreign state and has its principal place of 
business in an excepted real estate foreign state or in the United 
States.
    (b) For purposes of paragraph (a)(3)(iv) of this section, foreign 
persons who are related, have formal or informal arrangements to act in 
concert, or are agencies or instrumentalities of, or controlled by, the 
national or subnational governments of a single foreign state are 
considered part of a group of foreign persons and their individual 
ownerships are aggregated.
    (c) Notwithstanding paragraph (a) of this section, a foreign person 
is not an excepted real estate investor with respect to a transaction 
if:
    (1) In the five years prior to the completion date of the 
transaction the foreign person, any of its parents, or any entity of 
which it is a parent:
    (i) Has received written notice from the Committee that it has 
submitted a material misstatement or omission in a notice or 
declaration or made a false certification under this part or part 800 
or 801 of this chapter;
    (ii) Has received written notice from the Committee that it has 
violated a material provision of a mitigation agreement entered into 
with, material condition imposed by, or an order issued by, the 
Committee or a lead agency under section 721(l);
    (iii) Has been subject to action by the President under section 
721(d);
    (iv) Has:
    (A) Received a written Finding of Violation or Penalty Notice 
imposing a civil monetary penalty from the Department of the Treasury, 
Office of Foreign Assets Control (OFAC); or
    (B) Entered into a settlement agreement with OFAC with respect to 
apparent violations of U.S. sanctions laws administered by OFAC, 
including the International Emergency Economic Powers Act, the Trading 
With the Enemy Act, the Foreign Narcotics Kingpin Designation Act, each 
as amended, or of any executive order, regulation, order, directive, or 
license issued pursuant thereto;
    (v) Has received a written notice of debarment from the Department 
of State, Directorate of Defense Trade Controls, as described in 22 CFR 
parts 127 and 128;
    (vi) Has been a respondent or party in a final order, including a 
settlement order, issued by the Department of Commerce, Bureau of 
Industry and Security (BIS) regarding violations of U.S. export control 
laws administered by BIS, including the Export Control Reform Act of 
2018 (50 U.S.C. 4801 et seq.), the Export Administration Regulations 
(15 CFR parts 730-774), or of any executive order, regulation, order, 
directive, or license issued pursuant thereto;
    (vii) Has received a final decision from the Department of Energy, 
National Nuclear Security Administration imposing a civil penalty with 
respect to a violation of section 57 b. of the Atomic Energy Act of 
1954, as implemented under 10 CFR part 810; or
    (viii) Has been convicted of, or has entered into a deferred 
prosecution agreement or non-prosecution agreement with the Department 
of Justice with respect to, any felony in any jurisdiction within the 
United States; or
    (2) The foreign person, any of its parents, or any entity of which 
it is a parent is, on the date on which the parties to the transaction 
first execute a binding written agreement, or other binding document, 
establishing the material terms of the transaction, listed

[[Page 3170]]

on either the BIS Unverified List or Entity List in 15 CFR part 744.
    (d) Irrespective of whether the foreign person satisfies the 
criteria in paragraph (a)(1) or (2), (a)(3)(i) through (iii), or 
(c)(1)(i) through (iii) of this section as of the completion date, if 
at any time during the three-year period following the completion date 
the foreign person no longer meets all the criteria set forth in 
paragraph (a)(1) or (2), (a)(3)(i) through (iii), or (c)(1)(i) through 
(iii) of this section, the foreign person is not an excepted real 
estate investor with respect to the transaction from the completion 
date onward. This paragraph does not apply when an excepted real estate 
investor no longer meets any of the criteria solely due to a rescission 
of a determination under Sec.  802.1001(b) or if the relevant foreign 
state otherwise ceases to be an excepted real estate foreign state.
    (e) A foreign person may waive its status as an excepted real 
estate investor with respect to a transaction at any time by submitting 
a declaration under Sec.  802.401 or filing a notice under Sec.  
802.501 regarding the transaction in which it explicitly waives such 
status. In such case, the foreign person will be deemed not to be an 
excepted real estate investor with respect to the transaction, and the 
relevant provisions of subpart D or E will apply.

    Note 1 to Sec.  802.215: See Sec.  802.501(c)(2) regarding an 
agency notice where a foreign person is not an excepted real estate 
investor solely due to paragraph (d) of this section.

Sec.  802.216   Excepted real estate transaction.

    The term excepted real estate transaction means the following:
    (a) A purchase or lease by, or concession to, an excepted real 
estate investor of covered real estate, or a change in rights of an 
excepted real estate investor with respect to covered real estate.
    (b) A covered transaction as defined in part 800 of this chapter 
that includes the purchase, lease, or concession of covered real 
estate.
    (c) The purchase, lease, or concession of covered real estate that 
is within an urbanized area or urban cluster, except for real estate 
that is subject to paragraph (a) or (b)(1) of Sec.  802.211.
    (d) The purchase, lease, or concession of covered real estate that 
is a single housing unit, including fixtures and adjacent land to the 
extent that such fixtures and land are incidental to the use of the 
real estate as a single housing unit.
    (e) The lease by or a concession to a foreign person of covered 
real estate under paragraph (a) of Sec.  802.211 if:
    (1) The foreign person is a foreign air carrier, as that term is 
defined in 49 U.S.C. 40102(a)(21), for whom the Department of Homeland 
Security, Transportation Security Administration has accepted a 
security program under 49 CFR 1546.105, but only to the extent that the 
lease or concession is in furtherance of its activities as a foreign 
air carrier; or
    (2) According to the terms of the lease or concession, the covered 
real estate may be used only for the purpose of engaging in the retail 
sale of consumer goods or services to the public.
    (f) The purchase or lease by, or concession to, a foreign person of 
commercial space in a multi-unit building that is covered real estate, 
if, upon the completion of the transaction:
    (1) The foreign person and its affiliates do not, in the aggregate, 
hold, lease, or have a concession with respect to commercial space in 
such building that exceeds 10 percent of the total square footage of 
the commercial space of such building; and
    (2) The foreign person and its affiliates (each counted separately) 
do not represent more than 10 percent of the total number of tenants 
based on the number of ownership, lease and concession arrangements for 
commercial space in the building.
    (g) The purchase or lease by, or a concession to, a foreign person 
of covered real estate either:
    (1) Owned by an Alaska ``Native village,'' ``Native group,'' or 
``Native Corporation'' as those terms are defined in the Alaska Native 
Claims Settlement Act at 43 U.S.C. 1602; or
    (2) Held in trust by the United States for American Indians, Indian 
tribes, Alaska Natives, or any of the entities set forth in paragraph 
(g)(1) of this section.
    (h) Examples:

    (1) Example 1. Corporation A, a foreign person, proposes to 
purchase all of the shares of Corporation X, a U.S. business. 
Corporation X is in the business of owning and leasing real estate, 
including real estate properties that are in close proximity to 
military installations identified in part 1 and part 2 of appendix A 
to this part. As the sole owner of Corporation X, Corporation A will 
have control over Corporation X. The proposed transaction is not a 
covered real estate transaction but is a covered transaction under 
part 800 of this chapter.
    (2) Example 2. Same facts as the example in paragraph (h)(1) of 
this section. After the transaction contemplated in Example 1 of 
this section is completed, Corporation X leases from another person 
a tract of land that is in close proximity to a military 
installation identified in part 1 of appendix A to this part. 
Assuming no other relevant facts, the proposed transaction is a 
covered real estate transaction but only with respect to the new 
lease.
    (3) Example 3. Corporation A, a foreign person, seeks to 
purchase from Corporation X an empty warehouse located in close 
proximity to a military installation identified in part 2 of 
appendix A to this part. Assuming no other relevant facts, the 
purchase of the covered real estate is not a covered transaction 
subject to part 800 of this chapter because Corporation A has not 
acquired a U.S. business, and the purchase is a covered real estate 
transaction.
    (4) Example 4. Same facts as the example in paragraph (h)(3) of 
this section, except that, in addition to the proposed purchase of 
Corporation X's empty warehouse, Corporation A would also acquire 
from Corporation X the personnel, customer list, equipment, and 
inventory management software used to operate the warehouse. Under 
these facts, Corporation A is acquiring a U.S. business, and the 
proposed transaction is a covered transaction subject to part 800 of 
this chapter and therefore not a covered real estate transaction.
    (5) Example 5. Corporation A, a foreign person, purchases 
covered real estate that is undeveloped and in close proximity to a 
military installation identified in part 1 of appendix A to this 
part. Corporation A, through a newly incorporated U.S. subsidiary, 
intends to use the covered real estate to set up a manufacturing 
facility. Assuming no other relevant facts, Corporation A has not 
acquired a U.S. business, the purchase of the covered real estate is 
not a covered transaction subject to part 800 of this chapter, and 
Corporation A's purchase of the covered real estate is a covered 
real estate transaction.
    (6) Example 6. A foreign person purchases real estate. The 
nearest military installation is one that is identified in part 2 of 
appendix A to this part and is 40 miles away (i.e., in the extended 
range) from the real estate. The real estate is located in a 
statistical geographic area with a population of 125,000 
individuals. Assuming no other relevant facts, the transaction is 
not a covered real estate transaction because the covered real 
estate is located in an urbanized area.
    (7) Example 7. Same facts as the example in paragraph (h)(6) of 
this section, except that the covered real estate is not located in 
an urbanized area or an urban cluster. Assuming no other relevant 
facts, the real estate transaction is a covered real estate 
transaction.
    (8) Example 8. A foreign person purchases real estate that is 
0.25 miles from a military installation identified in part 1 of 
appendix A to this part. The real estate is located in an urbanized 
area. Assuming no other relevant facts, the real estate transaction 
is a covered real estate transaction because it is in close 
proximity to a military installation listed in part 1 of appendix A 
to this part.
    (9) Example 9. A foreign person purchases a single housing unit, 
including the one acre of land surrounding it, within 0.5 miles from 
a military installation identified in part 1 of appendix A to this 
part. Each home in the neighborhood sits on a separate lot, each of 
which is approximately one acre in size. The acre of land 
surrounding the housing unit is incidental to use of the land as a 
single housing unit, and the real estate transaction

[[Page 3171]]

therefore is not a covered real estate transaction.
    (10) Example 10. Same facts as the example in paragraph (h)(9) 
of this section, except that the foreign person also purchases an 
adjacent five acres of undeveloped land a year later. Assuming no 
other relevant facts, the purchase of the adjacent land is a covered 
real estate transaction.
    (11) Example 11. A foreign person leases five percent of the 
total commercial space in a building located 0.5 miles from a 
military installation identified in part 1 of appendix A to this 
part. There are nine other tenants that have leases for commercial 
space with the building owner. Assuming no other relevant facts, the 
transaction is a not a covered real estate transaction.

    Note 1 to Sec.  802.216: With respect to paragraph (d) of this 
section, for purposes herein, fixtures and land may be considered 
incidental if the size and nature of such is common for similar 
single housing units in the locality in which the unit is located.

Sec.  802.217   Extended range.

    The term extended range means, with respect to any military 
installation identified in Sec.  802.227(h), (k), or (m), as listed in 
part 2 of appendix A to this part, the area that extends 99 miles 
outward from the outer boundary of close proximity to such military 
installation, but, where applicable, not exceeding the outer limit of 
the territorial sea of the United States.


Sec.  802.218   Foreign entity.

    (a) The term foreign entity means any branch, partnership, group or 
sub-group, association, estate, trust, corporation or division of a 
corporation, or organization organized under the laws of a foreign 
state if either its principal place of business is outside the United 
States or its equity securities are primarily traded on one or more 
foreign exchanges.
    (b) Notwithstanding paragraph (a) of this section, any branch, 
partnership, group or sub-group, association, estate, trust, 
corporation or division of a corporation, or organization that can 
demonstrate that a majority of the equity interest in such entity is 
ultimately owned by U.S. nationals is not a foreign entity.


Sec.  802.219   Foreign government.

    The term foreign government means any government or body exercising 
governmental functions, other than the U.S. Government or a subnational 
government of the United States. The term includes, but is not limited 
to, national and subnational governments, including their respective 
departments, agencies, and instrumentalities.


Sec.  802.220   Foreign national.

    The term foreign national means any individual other than a U.S. 
national.


Sec.  802.221   Foreign person.

    (a) The term foreign person means:
    (1) Any foreign national, foreign government, or foreign entity; or
    (2) Any entity over which control is exercised or exercisable by a 
foreign national, foreign government, or foreign entity.
    (b) Any entity over which control is exercised or exercisable by a 
foreign person is a foreign person.
    (c) Examples:

    (1) Example 1. Corporation A is organized under the laws of a 
foreign state and is engaged in business only outside the United 
States. All of its shares are held by Corporation X, which solely 
controls Corporation A. Corporation X is organized in the United 
States and is wholly owned and controlled by U.S. nationals. 
Assuming no other relevant facts, Corporation A, although organized 
and operating only outside the United States, is not a foreign 
entity due to Sec.  802.218(b) and is not a foreign person.
    (2) Example 2. Same facts as the first sentence of the example 
in paragraph (c)(1) of this section. The government of the foreign 
state under whose laws Corporation A is organized exercises control 
over Corporation A because a law establishing Corporation A gives 
the foreign state the right to appoint Corporation A's board 
members. Corporation A is a foreign person.
    (3) Example 3. Corporation A is organized in the United States, 
is engaged in interstate commerce in the United States, and is 
controlled by Corporation X. Corporation X is organized under the 
laws of a foreign state, its principal place of business is located 
outside the United States, and 50 percent of its shares are held by 
foreign nationals and 50 percent of its shares are held by U.S. 
nationals. Both Corporation A and Corporation X are foreign persons. 
Corporation A is also a U.S. business.
    (4) Example 4. Corporation A is organized under the laws of a 
foreign state and is owned and controlled by a foreign national. A 
branch of Corporation A engages in interstate commerce in the United 
States. Corporation A (including its branch) is a foreign person. 
The branch is also a U.S. business.
    (5) Example 5. Corporation A is organized under the laws of a 
foreign state and its principal place of business is located outside 
the United States. Forty-five percent of the equity interest in 
Corporation A is owned in equal shares by numerous unrelated foreign 
investors, none of whom has control. The foreign investors have no 
formal or informal arrangement with any other holder of equity 
interest in Corporation A to act in concert regarding Corporation A. 
Corporation A can demonstrate that the remainder of the equity 
interest in Corporation A is ultimately held by U.S. nationals. 
Assuming no other relevant facts, Corporation A is not a foreign 
entity or foreign person.
    (6) Example 6. Same facts as the example in paragraph (c)(5) of 
this section, except that one of the foreign investors, a foreign 
national, controls Corporation A. Assuming no other relevant facts, 
Corporation A is not a foreign entity due to Sec.  802.218(b), but 
it is a foreign person under paragraph (a)(2) of this section 
because it is controlled by a foreign national.


Sec.  802.222   Hold.

    The terms hold(s) and holding mean legal or beneficial ownership, 
whether direct or indirect, whether through fiduciaries, agents, or 
other means.


Sec.  802.223   Housing unit.

    The term housing unit means a single family house, townhome, mobile 
home or trailer, apartment, group of rooms, or single room that is 
occupied as a separate living quarters, or, if vacant, is intended for 
occupancy as a separate living quarters.


Sec.  802.224   Investment fund.

    The term investment fund means any entity that is an ``investment 
company,'' as defined in section 3(a) of the Investment Company Act of 
1940 (15 U.S.C. 80a-1 et seq.), or would be an ``investment company'' 
but for one or more of the exemptions provided in section 3(b) or 3(c) 
thereunder.


Sec.  802.225   Lead agency.

    The term lead agency means the Department of the Treasury and any 
other agency designated by the Chairperson of the Committee to have 
primary responsibility, on behalf of the Committee, for the specific 
activity for which the Chairperson designates it as a lead agency, 
including all or a portion of an assessment, a review, an 
investigation, or the negotiation or monitoring of a mitigation 
agreement or condition.


Sec.  802.226   Lease.

    (a) The term lease means an arrangement conveying a possessory 
interest in real estate, short of ownership, to a person for a 
specified time and in exchange for consideration. This term includes 
subleases and assignments in whole or part.
    (b) Examples:

    (1) Example 1. Foreign person A enters into an arrangement with 
a neighbor that allows the foreign person to use a private road 
running across the neighbor's land. The road will remain owned by 
the neighbor following the arrangement. The neighbor will also 
retain physical possession of his land despite the foreign person 
having permission to traverse the land while using the road. The 
arrangement does not convey a possessory interest in real estate. 
Assuming no other relevant facts, the foreign person has not entered 
into a lease.
    (2) Example 2. Same facts as the example in paragraph (b)(1) of 
this section, except that

[[Page 3172]]

the foreign person's arrangement with the neighbor gives the foreign 
person the exclusive right to occupy a portion of the neighbor's 
land and attach fixtures to the surface, in exchange for a fee for a 
specified period of time. The foreign person can unilaterally 
adjust, remove, and make other changes to the fixtures. The foreign 
person has entered into a lease.

    Note 1 to Sec.  802.226: See Sec.  800.249(a)(5) for certain 
long-term leases and concessions that could be subject to part 800 
of this chapter.

Sec.  802.227   Military installation.

    The term military installation means any site that meets the 
following category descriptions, as identified in the list at appendix 
A to this part:
    (a) Active Air Force ballistic missile fields;
    (b) Air Force bases administering active Air Force ballistic 
missile fields;
    (c) Air Force bases and major annexes thereof containing a unit 
from the Air Force Air Combat Command;
    (d) Air Force bases and major annexes thereof containing an Air 
Force research laboratory or test unit and associated sites;
    (e) Air Force bases and major annexes thereof containing a unit of 
the North American Aerospace Defense Command and its regions;
    (f) Air Force bases and Air Force stations and major annexes 
thereof containing satellite, telemetry, tracking, or commanding 
systems;
    (g) Army bases, ammunition plants, centers of excellence and 
research laboratories and major annexes thereof, excluding depots, 
arsenals, and airfields that are not collocated with an Army 
installation included in this section;
    (h) Army combat training centers located in the continental United 
States;
    (i) Headquarters of the Office of the Secretary of Defense and 
Defense Advanced Research Projects Agency and major offices and annexes 
thereof;
    (j) Long range radar sites and major annexes thereof in any of the 
following states: Alaska, North Dakota, California, or Massachusetts;
    (k) Major range and test facility base activities as defined in 10 
U.S.C. 196;
    (l) Marine Corps bases and air stations and major annexes thereof, 
excluding detachments, installations, logistics battalions, recruit 
depots, and support facilities;
    (m) Military ranges as defined in 10 U.S.C. 101(e)(1) owned by the 
Navy or Air Force, or joint forces training centers that are located in 
any of the following states: Oregon, Nevada, Idaho, Wisconsin, 
Mississippi, North Carolina, or Florida;
    (n) Naval bases and air stations containing squadrons and 
supporting commands of the Submarine Force Atlantic or Submarine Force 
Pacific and major offices thereof;
    (o) Naval surface, air, and undersea warfare centers and research 
laboratories and major annexes thereof; and
    (p) Navy off-shore range complexes and off-shore operating areas.


Sec.  802.228   Minimum excepted ownership.

    The term minimum excepted ownership means:
    (a) With respect to an entity whose equity securities are primarily 
traded on an exchange in an excepted real estate foreign state or the 
United States, a majority of its voting interest, the right to a 
majority of its profits, and the right in the event of dissolution to a 
majority of its assets; and
    (b) With respect to an entity whose equity securities are not 
primarily traded on an exchange in an excepted real estate foreign 
state or the United States, 80 percent or more of its voting interest, 
the right to 80 percent or more of its profits, and the right in the 
event of dissolution to 80 percent or more of its assets.


Sec.  802.229   Parent.

    (a) The term parent means, with respect to an entity:
    (1) A person who or which directly or indirectly:
    (i) Holds or will hold at least 50 percent of the outstanding 
voting interest in the entity; or
    (ii) Holds or will hold the right to at least 50 percent of the 
profits of the entity, or has or will have the right in the event of 
dissolution to at least 50 percent of the assets of the entity; or
    (2) The general partner, managing member, or equivalent of the 
entity.
    (b) Any entity that meets the conditions of paragraph (a)(1) or (2) 
of this section with respect to another entity (i.e., the intermediate 
parent) is also a parent of any other entity of which the intermediate 
parent is a parent.
    (c) Examples:

    (1) Example 1. Corporation P holds 50 percent of the voting 
interest in Corporations R and S; Corporation R holds 40 percent of 
the voting interest in Corporation X; and Corporation S holds 50 
percent of the voting interest in Corporation Y, which in turn holds 
50 percent of the voting interest in Corporation Z. Corporation P is 
a parent of Corporations R, S, Y, and Z, but not of Corporation X. 
Corporation S is a parent of Corporation Y and Z, and Corporation Y 
is a parent of Corporation Z.
    (2) Example 2. Corporation A holds warrants which when exercised 
will entitle it to vote 50 percent of the outstanding shares of 
Corporation B. Corporation A is a parent of Corporation B.
    (3) Example 3. Investor A holds 60 percent of the outstanding 
voting interest in Corporation B. Investor C holds the right to 80 
percent of the profits of Corporation B. Each of Investor A and 
Investor C is a parent of Corporation B.


Sec.  802.230   Party to a transaction.

    (a) The term party to a transaction means:
    (1) In the case of a purchase, the person acquiring the ownership 
interest, the person from whom such ownership interest is acquired, and 
the entity whose ownership interest is being acquired, without regard 
to any person providing brokerage or underwriting services for the 
transaction;
    (2) In the case of a lease, the person acquiring the possessory 
interest, and the person from whom such possessory interest is 
acquired;
    (3) In the case of a concession, the person receiving the right to 
use the covered real estate, and the U.S. public entity;
    (4) In the case of a change in rights that a person has with 
respect to covered real estate as a result of a purchase, lease, or 
concession, the person whose rights change as a result of the 
transaction, and the person conveying those rights; and
    (5) In the case of any other transaction, transfer, agreement, or 
arrangement, the structure of which is designed or intended to evade or 
circumvent the application of section 721, any person that participates 
in such transaction, transfer, agreement, or arrangement.
    (6) In all cases, each party that submitted a declaration or notice 
to the Committee regarding a transaction.
    (b) For purposes of section 721(l), the term party to a transaction 
includes any affiliate of any party described in paragraph (a) of this 
section that the Committee, or a lead agency acting on behalf of the 
Committee, determines is relevant to mitigating a risk to the national 
security of the United States.


Sec.  802.231   Person.

    The term person means any individual or entity.


Sec.  802.232   Principal place of business.

    (a) The term principal place of business means, subject to 
paragraph (b) of this section, the primary location where an entity's 
management directs, controls, or coordinates the entity's activities, 
or, in the case of an investment fund, where the fund's activities and 
investments are primarily directed, controlled, or coordinated by or on 
behalf of the general partner, managing member, or equivalent.

[[Page 3173]]

    (b) If the location determined under paragraph (a) of this section 
is in the United States and the entity has represented to the U.S. 
Government or a subnational government of the United States or any 
foreign government, in the most recent submission or filing to such 
government (other than a submission or filing to the Committee) in 
which the entity has identified its principal place of business, 
principal office and place of business, address of principal executive 
offices, address of headquarters, or equivalent, that any of the 
foregoing is outside the United States, then the location identified in 
such submission or filing is deemed for purposes of this definition to 
be the entity's principal place of business unless the entity can 
demonstrate that such location has changed to the United States since 
such submission or filing.


Sec.  802.233   Property right.

    (a) The term property right means, with respect to real estate, any 
of the following rights or abilities, whether or not exercised, whether 
or not shared concurrently with any other person, and whether or not 
the underlying real estate is subject to an easement or other 
encumbrance:
    (1) To physically access the real estate;
    (2) To exclude others from physically accessing the real estate;
    (3) To improve or develop the real estate; or
    (4) To attach fixed or immovable structures or objects to the real 
estate.
    (b) Examples:

    (1) Example 1. Corporation A, a foreign person, enters into a 
lease of real estate. Although at least one other person shares 
concurrently with Corporation A the right to access the property, 
Corporation A retains the right to physically exclude others from 
access that would interfere with its rights under the lease. Under 
the lease, Corporation A has the right to exclude others from 
physically accessing the real estate, and therefore affords the 
foreign person a property right.
    (2) Example 2. Corporation A, a foreign person, enters into a 
lease of real estate that allows Corporation A to develop the real 
estate. The exercise of the right to develop the real estate is 
subject to Corporation A obtaining the appropriate regulatory 
permits. Notwithstanding the fact that Corporation A has not fully 
exercised its lease right pending the issuance of the permits, 
Corporation A is a party to lease that affords it a property right 
for purposes of this part.


Sec.  802.234   Purchase.

    (a) The term purchase means an arrangement conveying an ownership 
interest in real estate to a person in exchange for consideration.
    (b) Example: Person A, a foreign person, acquires covered real 
estate from Person B, a U.S. national, in exchange for land and 
services. Person A has purchased the covered real estate because the 
arrangement was predicated on consideration in the form of land and 
services.


Sec.  802.235   Real estate.

    The term real estate means any land, including subsurface and 
submerged, or structure attached to land, including any building or any 
part thereof, that is located in the United States.


Sec.  802.236  Section 721.

    The term section 721 means section 721 of title VII of the Defense 
Production Act of 1950, as amended (50 U.S.C. 4565).


Sec.  802.237   Transaction.

    The term transaction means any purchase or lease by, or concession 
to, a person of real estate, whether proposed or completed.


Sec.  802.238   United States.

    The term United States or U.S. means the United States of America, 
the States of the United States, the District of Columbia, and any 
commonwealth, territory, dependency, or possession of the United 
States, or any subdivision of the foregoing, and includes the 
territorial sea of the United States. For purposes of these regulations 
and their examples in this part, an entity organized under the laws of 
the United States of America, one of the States, the District of 
Columbia, or a commonwealth, territory, dependency, or possession of 
the United States is an entity organized ``in the United States.''


Sec.  802.239   Urban cluster.

    The term urban cluster means a statistical geographic area as 
identified in the most recent U.S. Census consisting of a densely 
settled core created from census tracts or blocks and contiguous 
qualifying territory that together have at least 2,500 individuals but 
fewer than 50,000 individuals.


Sec.  802.240   Urbanized area.

    The term urbanized area means a statistical geographic area as 
identified in the most recent U.S. Census consisting of a densely 
settled core created from census tracts or blocks and contiguous 
qualifying territory that together have a minimum population of at 
least 50,000 individuals.


Sec.  802.241   U.S. business.

    The term U.S. business means any entity, irrespective of the 
nationality of the persons that control it, engaged in interstate 
commerce in the United States.

    Note 1 to Sec.  802.241: See examples to definition in Sec.  
800.252.

Sec.  802.242   U.S. national.

    The term U.S. national means an individual who is a U.S. citizen or 
an individual who, although not a U.S. citizen, owes permanent 
allegiance to the United States.


Sec.  802.243   U.S. public entity.

    The term U.S. public entity means the U.S. Government, a 
subnational government of the United States, or any other body 
exercising governmental functions of the United States, including air 
and maritime port authorities. The term includes, but is not limited 
to, the respective departments, agencies, and instrumentalities of the 
U.S. Government and the subnational governments of the United States.


Sec.  802.244   Voting interest.

    The term voting interest means any interest in an entity that 
entitles the owner or holder of that interest to vote for the election 
of directors of the entity (or, with respect to unincorporated 
entities, individuals exercising similar functions) or to vote on other 
matters affecting the entity.

Subpart C--Coverage


Sec.  802.301   Transactions that are covered real estate transactions.

    Transactions that are covered real estate transactions include:
    (a) A transaction that meets the criteria of Sec.  802.212, 
including where a foreign person (other than an excepted real estate 
investor) enters into a purchase or lease of, or obtains a concession 
to, covered real estate either directly or indirectly. (See the 
examples in paragraphs (h)(1) and (2) of this section.)
    (b) A purchase by a foreign person (other than an excepted real 
estate investor) of less than full ownership of covered real estate 
that nevertheless affords the foreign person at least three property 
rights with respect to the covered real estate. (See the example in 
paragraph (h)(3) of this section.)
    (c) A purchase or lease by, or concession to, a foreign person 
(other than an excepted real estate investor) of real estate, a portion 
of which is covered real estate with respect to which the foreign 
person has at least three property rights. (See the example in 
paragraph (h)(4) of this section.)
    (d) A purchase or lease by, or concession to, a foreign person 
(other than an excepted real estate investor) of a portion of covered 
real estate with respect to which the foreign person has at least three 
property rights. (See the

[[Page 3174]]

example in paragraph (h)(5) of this section.)
    (e) A purchase, lease, or assignment of a concession, of covered 
real estate that meets the criteria of Sec.  802.212 by one foreign 
person (other than an excepted real estate investor) from another 
foreign person. (See the example in paragraph (h)(6) of this section.)
    (f) A purchase or lease by, or concession to, a foreign person 
(other than an excepted real estate investor) of covered real estate, 
that, through a subsequent change in the rights that a foreign person 
has with respect to covered real estate, results in the foreign person 
having at least three property rights. (See the example in paragraph 
(h)(7) of this section.)
    (g) A transaction the structure of which is designed or intended to 
evade or circumvent the application of this part.
    (h) Examples:

    (1) Example 1. Corporation A, a foreign person, acquires 
Corporation X, a U.S. business. As a result, Corporation X is a 
foreign person. Subsequently, Corporation X purchases real estate 
that is in close proximity to a military installation identified in 
part 1 of appendix A to this part and obtains all of the property 
rights with respect to such real estate. Assuming no other relevant 
facts, the transaction is a covered real estate transaction.
    (2) Example 2. Corporation A purchases covered real estate that 
is undeveloped land. Corporation A's only asset in the United States 
is the covered real estate, and Corporation A is not itself nor does 
it own a U.S. business. In a subsequent transaction, Corporation B, 
a foreign person, purchases 100 percent of the shares of Corporation 
A. Assuming no other relevant facts, the subsequent transaction as 
an indirect purchase of real estate is a covered real estate 
transaction.
    (3) Example 3. Corporation A, a foreign person, together with 
Corporation B, a U.S. business, purchases real estate that is in 
close proximity to a military installation identified in part 2 of 
appendix A to this part. Neither party has full ownership; rather, 
the title to the real estate is held by the two parties jointly. 
Corporation A is afforded at least three property rights as a result 
of the transaction. Assuming no other relevant facts, the 
transaction is a covered real estate transaction.
    (4) Example 4. Corporation A, a foreign person, purchases real 
estate. Half of such real estate is located in close proximity to a 
military installation identified in part 1 of appendix A to this 
part of and is therefore covered real estate. The other half of the 
real estate purchased by Corporation A is not located in close 
proximity to any such military installation. Assuming no other 
relevant facts, Corporation A's purchase is a covered real estate 
transaction.
    (5) Example 5. Corporation A, a U.S. business, purchases covered 
real estate that is entirely located in close proximity to a 
military installation identified in part 2 of appendix A to this 
part. Corporation B, a foreign person, leases from Corporation A a 
part of that real estate. Corporation B is entitled to at least 
three property rights with respect to the real estate as a result of 
the transaction. Assuming no other relevant facts, Corporation B's 
lease is a covered real estate transaction.
    (6) Example 6. Corporation A, a foreign person, purchases 
covered real estate and is afforded three property rights with 
respect to the covered real estate. In a subsequent transaction, 
Corporation B, another foreign person, leases the covered real 
estate from Corporation A, and is also afforded three property 
rights. Assuming no other relevant facts, each transaction is a 
covered real estate transaction.
    (7) Example 7. Corporation A, a foreign person, leases from 
Person B covered real estate, and is afforded two property rights. 
Person B subsequently provides Corporation A an additional property 
right in connection with the lease. Assuming no other relevant 
facts, the lease is a covered real estate transaction because the 
subsequent change in rights results in the foreign person having at 
least three property rights.


Sec.  802.302   Transactions that are not covered real estate 
transactions.

    Transactions that are not covered real estate transactions include:
    (a) A transaction that meets the definition of excepted real estate 
transaction in Sec.  802.216.
    (b) A purchase or lease by, or concession to, a foreign person of 
covered real estate, or a subsequent change in rights, that does not 
afford or result in the foreign person having at least three of the 
property rights with respect to the covered real estate.
    (c) An acquisition of securities by a person acting as a securities 
underwriter, in the ordinary course of business and in the process of 
underwriting.
    (d) An acquisition pursuant to a condition in a contract of 
insurance relating to fidelity, surety, or casualty obligations if the 
contract was made by an insurer in the ordinary course of business.


Sec.  802.303   Lending transactions.

    (a) The extension of a mortgage, loan, or similar financing 
arrangement by a foreign person to another person for the purpose of 
the purchase, lease, or concession of covered real estate, regardless 
of whether accompanied by the creation in favor of the foreign person 
of a secured interest in the covered real estate, shall not, by itself, 
constitute a covered real estate transaction.
    (1) The Committee will accept notices or declarations concerning a 
mortgage, loan, or similar financing arrangement that does not, by 
itself, constitute a covered real estate transaction only at the time 
that, because of imminent or actual default or other condition, there 
is a significant possibility that a purchase or lease by, concession 
to, or a change in rights involving a foreign person may result from 
the default or other condition and that would constitute a covered real 
estate transaction.
    (2) Where the Committee accepts a notice or declaration concerning 
a mortgage, loan, or similar financing arrangement under paragraph 
(a)(1) of this section, and a party to the transaction is a foreign 
person that makes mortgages or loans in the ordinary course of 
business, the Committee will take into account whether the foreign 
person has made any arrangements to transfer the ownership and property 
rights over the covered real estate to U.S. nationals or excepted real 
estate investors for purposes of determining whether such mortgage, 
loan, or financing arrangement constitutes a covered real estate 
transaction.
    (b) Notwithstanding paragraph (a) of this section, a mortgage, 
loan, or similar financing arrangement through which a foreign person 
acquires property rights over covered real estate may constitute a 
covered real estate transaction to the extent that the arrangement 
would constitute a purchase, lease, or concession under this part.
    (c) Example: Corporation A, a foreign bank, makes a secured loan to 
Corporation B in order for Corporation B to purchase a building that 
constitutes covered real estate. The collateral for the loan is the 
building that Corporation B is purchasing, and upon default, 
Corporation A would obtain an ownership interest and be afforded at 
least three property rights with respect to the building. Corporation B 
defaults on the loan. Assuming no other relevant facts, the Committee 
would accept a notice or declaration of the imminent default or default 
transferring ownership of the building to Corporation A, which would 
constitute a covered real estate transaction.


Sec.  802.304   Timing rule for a contingent equity interest.

    (a) For purposes of determining whether to include the rights that 
a holder of a contingent equity interest will acquire upon conversion 
of, or exercise of a right provided by, that interest in the 
Committee's analysis of whether a notified transaction is a covered 
real estate transaction, the Committee will consider factors that 
include:

[[Page 3175]]

    (1) The imminence of conversion or satisfaction of contingent 
conditions;
    (2) Whether conversion or satisfaction of contingent conditions 
depends on factors within the control of the acquiring party; and
    (3) Whether the amount of interest and the rights that would be 
acquired upon conversion or satisfaction of contingent conditions can 
be reasonably determined at the time of acquisition.
    (b) When the Committee, applying paragraph (a) of this section, 
determines that the rights that the holder will acquire upon conversion 
or satisfaction of contingent condition will not be included in the 
Committee's analysis of whether a notified or submitted transaction is 
a covered real estate transaction, the Committee will disregard the 
contingent equity interest for purposes of that transaction except to 
the extent that they convey immediate rights to the holder with respect 
to the entity that issued the interest.

Subpart D--Declarations


Sec.  802.401   Procedures for declarations.

    (a) A party or parties may submit a voluntary declaration of a 
transaction by submitting electronically the information set out in 
Sec.  802.402, including the certifications required thereunder, to the 
Staff Chairperson in accordance with the submission instructions on the 
Committee's section of the Department of the Treasury website.
    (b) No communications other than those described in paragraph (a) 
of this section shall constitute the submission of a declaration for 
purposes of section 721.
    (c) Information and other documentary material submitted to the 
Committee under this section shall be considered to have been filed 
with the President or the President's designee for purposes of section 
721(c) and Sec.  802.802.
    (d) Persons filing a declaration shall, during the time that the 
matter is pending before the Committee, promptly advise the Staff 
Chairperson of any material changes in plans, facts, or circumstances 
regarding the transaction, and any material change in information 
provided or required to be provided to the Committee under Sec.  
802.402. Unless the Committee rejects the declaration on the basis of 
such material changes in accordance with Sec.  802.404(a)(2)(i), such 
changes shall become part of the declaration filed by such persons 
under this section, and the certification required under Sec.  
802.403(d) shall apply to such changes.
    (e) Parties to a transaction that have filed with the Committee a 
written notice regarding a transaction under Sec.  802.501 or Sec.  
800.501 or a declaration under Sec.  800.403 may not submit to the 
Committee a declaration regarding the same transaction or a 
substantially similar transaction without the written approval of the 
Staff Chairperson.


Sec.  802.402  Contents of declarations.

    (a) The party or parties submitting a voluntary declaration of a 
transaction under Sec.  802.401 shall provide the information set out 
in this section, which must be accurate and complete with respect to 
the party or parties filing the voluntary declaration and to the 
transaction. (See also paragraphs (d), (e), and (f) of this section.)
    (b) Other than as provided under paragraph (f) of this section, if 
fewer than all the parties to a transaction submit a declaration, the 
Committee may, at its discretion, request that the parties to the 
transaction file a written notice of the transaction under Sec.  
802.501, if the Staff Chairperson determines that the information 
provided by the submitting party or parties in the declaration is 
insufficient for the Committee to assess the transaction.
    (c) Subject to paragraph (e) of this section, a declaration 
submitted under Sec.  802.401 shall describe or provide, as applicable:
    (1) The name of the foreign person(s) and the current holder(s) of 
interest in the real estate that are parties to, or, in applicable 
cases, the subject of the transaction, as well as the name, telephone 
number, and email address of the primary point of contact for each 
party.
    (2) The following information regarding the transaction in 
question:
    (i) A brief description of the rationale for and nature of the 
transaction, including its structure (e.g., purchase, lease, or 
concession) and term, whether the foreign person is acquiring a 
collection of assets or interest in an entity, and whether it is part 
of a larger project undertaken by the foreign person;
    (ii) The total transaction value in U.S. dollars;
    (iii) The status of the transaction, including the actual or 
expected completion date of the transaction;
    (iv) All sources of financing for the transaction and any real 
estate agents/brokers involved; and
    (v) A copy of the definitive documentation of the transaction, such 
as a purchase, lease, or concession agreement, or if none exists, the 
document establishing the material terms of the transaction, which in 
the context of a transaction involving a covered port, must be signed 
and dated.
    (3) The following information regarding the real estate that is the 
subject of the transaction:
    (i) The location, by address and geographic coordinates in decimal 
degrees to the fourth digit, of the real estate that is the subject of 
the transaction;
    (ii) The name(s) of and distance(s) to any covered port, military 
installation, or any other facility or property of the U.S. Government 
as identified in this part and that is relevant to CFIUS jurisdiction 
given the location of the real estate.
    (iii) A description of the real estate that is the subject of the 
transaction including the approximate size (in acres, feet, or other 
appropriate measurement); nature of the real estate (e.g., zoning type 
and the major topographical or other features of the real estate); and 
current use of the real estate including any physical security 
measures.
    (iv) A description of the plans of the foreign person with respect 
to the real estate and structures that are or will be on the real 
estate; and
    (v) A description of any leases, licenses, permits, easements, 
encumbrances, or other grants or approvals associated with the real 
estate, including whether any involve the U.S. Government.
    (4) A statement as to whether the foreign person will have any of 
the following rights or abilities with respect to the real estate as a 
result of the transaction:
    (i) To physically access the real estate;
    (ii) To exclude others from physically accessing the real estate;
    (iii) To improve or develop the real estate; or
    (iv) To attach fixed or immovable structures or objects to the real 
estate.
    (5) The name of the ultimate parent of the foreign person.
    (6) The address and principal place of business of the foreign 
person and its ultimate parent.
    (7) A complete pre-transaction organizational chart (and post-
transaction, if different) including, information that identifies the 
name, principal place of business, place of incorporation or other 
legal organization (for entities); nationality (for individuals); and 
ownership percentage (expressed in terms of both voting and economic 
interest, if different) for each of the following:
    (i) The immediate parent, the ultimate parent, and each 
intermediate parent, if

[[Page 3176]]

any, of each foreign person that is a party to the transaction;
    (ii) Where the ultimate parent is a private company, the ultimate 
owner(s) of such parent; and
    (iii) Where the ultimate parent is a public company, any 
shareholder with an interest of greater than five percent in such 
parent.
    (8) Information regarding all foreign government ownership in the 
foreign person's ownership structure, including nationality and 
percentage of ownership, as well as any rights that a foreign 
government holds, directly or indirectly, with respect to the foreign 
person.
    (9) With respect to the foreign person that is party to the 
transaction and any of its parents, as applicable, a brief summary of 
their respective business activities.
    (10) A statement as to whether a party to the transaction is 
stipulating that the transaction is a covered real estate transaction 
and a description of the basis for the stipulation.
    (11) A statement as to whether any party to the transaction has 
been party to another transaction previously notified or submitted to 
the Committee, and the case number assigned by the Committee regarding 
such transaction(s).
    (12) A statement (including relevant jurisdiction and criminal case 
law number or legal citation) as to whether the holder of the real 
estate, the foreign person, any parent of the foreign person, or any 
person of which the foreign person is a parent, has been convicted in 
the last 10 years of a crime in any jurisdiction.
    (d) Each party submitting a declaration shall provide a 
certification of the information contained in the declaration 
consistent with Sec.  802.202. A sample certification may be found on 
the Committee's section of the Department of the Treasury website.
    (e) A party that offers a stipulation under paragraph (c)(10) of 
this section acknowledges that the Committee and the President are 
entitled to rely on such stipulation in determining whether the 
transaction is a covered real estate 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 
real estate transaction.
    (f) In the case of a transaction where a U.S. public entity is a 
party to the transaction and is not submitting a declaration, the other 
party or parties to the transaction shall provide the information set 
out in this section with respect to itself and, to the extent known or 
reasonably available to it, with respect to the U.S. public entity.


Sec.  802.403   Beginning of 30-day assessment period.

    (a) Upon receipt of a declaration submitted under Sec.  802.401, 
the Staff Chairperson shall promptly inspect the declaration and shall 
promptly notify in writing all parties to a transaction that have 
submitted a declaration that:
    (1) The Staff Chairperson has accepted the declaration and 
circulated the declaration to the Committee, and the date on which the 
assessment described in paragraph (b) of this section begins; or
    (2) The Staff Chairperson has determined not to accept the 
declaration and circulate the declaration to the Committee because the 
declaration is incomplete, and an explanation of the material respects 
in which the declaration is incomplete.
    (b) A 30-day period for assessment of a transaction that is the 
subject of a declaration shall commence on the date on which the 
declaration is received by the Committee from the Staff Chairperson. 
Such period shall end no later than the thirtieth day after it has 
commenced, or if the thirtieth day is not a business day, no later than 
the next business day after the thirtieth day.
    (c) During the 30-day assessment period, the Staff Chairperson may 
invite the parties to a covered real estate transaction to attend a 
meeting with the Committee staff to discuss and clarify issues 
pertaining to the transaction.
    (d) If the Committee notifies the parties to a transaction that 
have submitted a declaration under Sec.  802.401 that the Committee 
intends to conclude all action under section 721 with respect to that 
transaction, each party that has submitted additional information 
subsequent to the original declaration shall file a certification as 
described in Sec.  802.202. A sample certification may be found on the 
Committee's section of the Department of the Treasury website.
    (e) If a party fails to provide the certification required under 
paragraph (d) of this section, the Committee may, at its discretion, 
take any of the actions under Sec.  802.405.


Sec.  802.404   Rejection, disposition, or withdrawal of declarations.

    (a) The Committee, acting through the Staff Chairperson, may:
    (1) Reject any declaration that does not comply with Sec.  802.402 
and so inform the parties promptly in writing;
    (2) Reject any declaration at any time, and so inform the parties 
promptly in writing, if, after the declaration has been submitted and 
before the Committee has taken one of the actions specified in Sec.  
802.405:
    (i) There is a material change in the covered real estate 
transaction as to which a declaration has been submitted; or
    (ii) Information comes to light that contradicts material 
information provided in the declaration by the party (or parties); or
    (3) Reject any declaration at any time after the declaration has 
been submitted, and so inform the parties promptly in writing, if the 
party (or parties) that submitted the declaration does not provide 
follow-up information requested by the Staff Chairperson within two 
business days of the request, or within a longer time frame if the 
party (or parties) so request in writing and the Staff Chairperson 
grants that request in writing.
    (b) The Staff Chairperson shall notify the party (or parties) that 
submitted a declaration when the Committee has found that the 
transaction that is the subject of a declaration is not a covered real 
estate transaction.
    (c) Parties to a transaction that have submitted a declaration 
under Sec.  802.401 may request in writing, at any time prior to the 
Committee taking action under Sec.  802.405, that such declaration be 
withdrawn. Such request shall be directed to the Staff Chairperson and 
shall state the reasons why the request is being made and state whether 
the transaction that is the subject of the declaration is being fully 
and permanently abandoned. An official of the Department of the 
Treasury will promptly advise the parties to the transaction in writing 
of the Committee's decision.
    (d) The Committee may not request or recommend that a declaration 
be withdrawn and refiled, except to permit parties to a covered real 
estate transaction to correct material errors or omissions, or describe 
material changes to the transaction, in the declaration submitted with 
respect to that covered real estate transaction.
    (e) A party (or parties) may not submit more than one declaration 
for the same or a substantially similar transaction without approval 
from the Staff Chairperson.

    Note 1 to Sec.  802.404:  See Sec.  802.401(e) regarding the 
prohibition on submitting a declaration regarding the same 
transaction or a substantially similar transaction for which

[[Page 3177]]

a written notice has been filed, or a declaration submitted under 
part 800 of this chapter, without the approval of the Staff 
Chairperson.

Sec.  802.405   Committee actions.

    (a) Upon receiving a declaration submitted under Sec.  802.401 with 
respect to a covered real estate transaction, the Committee may, at the 
discretion of the Committee:
    (1) If the Committee has reason to believe that the transaction may 
raise national security considerations, request that the parties to the 
transaction file a written notice under subpart E;
    (2) Inform the parties to the transaction that the Committee is not 
able to conclude action under section 721 with respect to the 
transaction on the basis of the declaration and that the parties may 
file a written notice under subpart E to seek written notification from 
the Committee that the Committee has concluded all action under section 
721 with respect to the transaction;
    (3) Initiate a unilateral review of the transaction under Sec.  
802.501(c); or
    (4) Notify the parties in writing that the Committee has concluded 
all action under section 721 with respect to the transaction.
    (b) The Committee shall take action under paragraph (a) of this 
section within the time period set forth in Sec.  802.403(b).

Subpart E--Notices


Sec.  802.501   Procedures for notices.

    (a) Except as otherwise prohibited under paragraph (j) of this 
section, 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 an electronic 
copy of the notice that includes, in English, the information set out 
in Sec.  802.502, including the certification required under paragraph 
(h) of that section. For electronic submission instructions, see the 
Committee's section of the Department of the Treasury website.
    (b) If the Committee determines that a transaction for which no 
voluntary notice has been filed under this part, and with respect to 
which the Committee has not informed the parties in writing that the 
Committee has concluded all action under section 721, may be a covered 
real estate transaction and may raise national security considerations, 
the Staff Chairperson, acting on the recommendation of the Committee, 
may request the parties to the transaction to provide to the Committee 
the information necessary to determine whether the transaction is a 
covered real estate transaction, and if the Committee determines that 
the transaction is a covered real estate transaction, to file a notice 
of such covered real estate transaction under paragraph (a) of this 
section.
    (c) With respect to any covered real estate transaction:
    (1) Any member of the Committee, or his or her designee at or above 
the Under Secretary or equivalent level, may, subject to paragraph 
(c)(2) of this section, file an agency notice to the Committee through 
the Staff Chairperson regarding a transaction if:
    (i) That member has reason to believe that the transaction is a 
covered real estate transaction and may raise national security 
considerations and:
    (A) The Committee has not informed the parties to such transaction 
in writing that the Committee has concluded all action under section 
721 with respect to such transaction; and
    (B) The President has not announced a decision not to exercise the 
President's authority under section 721(d) with respect to such 
transaction; or
    (ii) The transaction is a covered real estate transaction and:
    (A) The Committee has informed the parties to such transaction in 
writing that the Committee has concluded all action under section 721 
with respect to such transaction or determined that such transaction is 
not a covered real estate transaction, or the President has announced a 
decision not to exercise the President's authority under section 721(d) 
with respect to such transaction; and
    (B) Either:
    (1) A party to such transaction submitted false or misleading 
material information to the Committee in connection with the 
Committee's consideration of such transaction or omitted material 
information, including material documents, from information submitted 
to the Committee; or
    (2) A party to such transaction breaches a mitigation agreement or 
condition described in section 721(l)(3)(A), such breach is certified 
to the Committee by the lead department or agency monitoring and 
enforcing such agreement or condition as a material breach, and the 
Committee determines that there are no other adequate and appropriate 
remedies or enforcement tools available to address such breach.
    (2)(i) That is a transaction where a foreign person is not an 
excepted real estate investor due to the application of Sec.  
802.215(d), any member of the Committee, or his or her designee at or 
above the Under Secretary or equivalent level, may file an agency 
notice to the Committee through the Staff Chairperson regarding such 
transaction if:
    (A) That member has reason to believe that the transaction is a 
covered real estate transaction and may raise national security 
considerations;
    (B) The Committee has not informed the parties to such transaction 
in writing that the Committee has concluded all action under section 
721 with respect to such transaction; and
    (C) The President has not announced a decision not to exercise the 
President's authority under section 721(d) with respect to such 
transaction.
    (ii) No notice filed under this paragraph (c)(2) shall be made with 
respect to a transaction more than one year after the completion date 
of the transaction, unless the Chairperson of the Committee determines, 
in consultation with other members of the Committee, that because the 
foreign person no longer meets all the criteria set forth in Sec.  
802.215(a)(1) or (2), (a)(3)(i) through (iii), or (c)(1)(i) through 
(iii), the transaction may threaten to impair the national security of 
the United States, and in no event shall an agency notice under this 
paragraph be made with respect to such a transaction more than three 
years after the completion date of the transaction.
    (d) Notices filed under paragraph (c) of this section are deemed 
accepted upon their receipt by the Staff Chairperson. No agency notice 
under paragraph (c)(1) of this section shall be made with respect to a 
real estate transaction more than three years after the completion date 
of the transaction, unless the Chairperson of the Committee, in 
consultation with other members of the Committee, files such an agency 
notice.
    (e) No communications other than those described in paragraphs (a) 
and (c) of this section shall constitute the filing or submitting of a 
notice for purposes of section 721.
    (f) Upon receipt of the electronic copy of a notice filed under 
paragraph (a) of this section, including the certification required by 
Sec.  802.502(h), the Staff Chairperson shall promptly inspect such 
notice for completeness.
    (g) Parties to a transaction are encouraged to consult with the 
Committee in advance of filing a notice and, in appropriate cases, to 
file with the Committee a draft notice or other appropriate documents 
to aid the Committee's understanding of the transaction and to provide 
an opportunity for the Committee to request additional information to 
be included in the notice. Any such pre-

[[Page 3178]]

notice consultation should take place, or any draft notice should be 
provided, at least five business days before the filing of a voluntary 
notice. All information and documentary material made available to the 
Committee under this paragraph shall be considered to have been filed 
with the President or the President's designee for purposes of section 
721(c) and Sec.  802.802.
    (h) Information and other documentary material provided by any 
party to the Committee after the filing of a voluntary notice under 
this section shall be part of the notice, and shall be subject to the 
final certification required under Sec.  802.502(l).
    (i) For any voluntarily submitted draft or formal written notice 
that includes a stipulation under section Sec.  802.502(j) that a 
transaction is a covered real estate transaction, the Committee shall 
provide comments on the draft or formal written notice or accept the 
formal written notice of a covered real estate transaction not later 
than the date that is 10 business days after the date of submission of 
the draft or formal written notice.
    (j) No party to a transaction may file a notice under paragraph (a) 
of this section if the transaction has been the subject of a 
declaration submitted under subpart D and the Committee has not yet 
taken any action with respect to the transaction under Sec.  802.405.


Sec.  802.502   Contents of voluntary notices.

    (a) If a party or the parties to a transaction file a voluntary 
notice, they shall provide in detail the information set out in this 
section, which must be accurate and complete with respect to the party 
or parties filing the voluntary notice and to the transaction. (See 
also paragraph (k) of this section regarding U.S. public entities and 
paragraph (h) of this section and Sec.  802.202 regarding certification 
requirements.)
    (b) A voluntary notice filed under Sec.  802.501 shall describe or 
provide, as applicable:
    (1) The following information regarding the transaction in 
question:
    (i) A summary setting forth the essentials of the transaction, 
including a statement of the purpose of the transaction, its scope, 
both within and outside of the United States, as applicable, whether 
the foreign person is acquiring a collection of assets or interest in 
an entity, and the extent to which it is part of a larger project 
undertaken by the foreign person;
    (ii) The nature of the transaction, for example, whether the 
transaction involves a purchase, lease, or concession of real estate 
and the term, if any;
    (iii) The name, United States address (if any), website address (if 
any), nationality (for individuals) or place of incorporation or other 
legal organization (for entities), and address of the principal place 
of business of each foreign person that is a party to the transaction;
    (iv) The name, address, website address (if any), principal place 
of business, and place of incorporation or other legal organization of 
the current holder of interest in the real estate that is the subject 
of the transaction;
    (v) In the case that a U.S. public entity is a party to the covered 
real estate transaction, the name, telephone number, and email address 
of the primary point of contact for the U.S. public entity;
    (vi) The name, address, and nationality (for individuals) or place 
of incorporation or other legal organization (for entities) of:
    (A) The immediate parent, the ultimate parent, and each 
intermediate parent, if any, of the foreign person that is a party to 
the transaction;
    (B) Where the ultimate parent is a private company, the ultimate 
owner(s) of such parent; and
    (C) Where the ultimate parent is a public company, any shareholder 
with an interest of greater than five percent in such parent;
    (vii) The name, address, website address (if any), and nationality 
(for individuals) or place of incorporation or other legal organization 
(for entities) of the foreign person or foreign persons that will be 
afforded property rights with respect to the real estate that is the 
subject of the covered real estate transaction;
    (viii) The actual or expected completion date of the transaction;
    (ix) A good faith approximation of the fair market value of the 
interest acquired in the covered real estate in U.S. dollars, as of the 
date of the notice;
    (x) The name of any and all financial institutions and real estate 
agents/brokers involved in the transaction, including as advisors, 
underwriters, or sources of financing for the transaction;
    (xi) A copy of the definitive documentation of the transaction, 
such as a purchase, lease, or concession agreement, or if none exists, 
the document establishing the material terms of the transaction, which 
in the context of a transaction involving a covered port, must be 
signed and dated;
    (xii) Whether the foreign person will have any of the following 
rights or abilities with respect to the real estate as a result of the 
transaction and any additional information regarding such property 
rights:
    (A) To physically access the real estate;
    (B) To exclude others from physically accessing the real estate;
    (C) To improve or develop the real estate; or
    (D) To attach fixed or immovable structures or objects to the real 
estate.
    (2) A detailed description of real estate that is the subject of 
the transaction, including as applicable:
    (i) The location, by address and geographic coordinates in decimal 
degrees to the 4th digit, of the real estate that is the subject of the 
covered real estate transaction;
    (ii) A description of the real estate that is the subject of the 
covered real estate transaction including the approximate size (in 
acres, feet, or other appropriate measurement); nature of the real 
estate (e.g., zoning type and the major topographical or other features 
of the real estate); current use of the real estate; and structures 
that are or will be on the real estate;
    (iii) A description of any leases, licenses, permits, easements, 
encumbrances, or other grants or approvals associated with the real 
estate, including whether any involve the U.S. Government, as well as 
any feasibility studies conducted with respect to the real estate; and
    (iv) The name(s) of and distance(s) to any relevant covered port, 
military installation, or any other facility or property of the U.S. 
Government as identified in this part, and that is relevant to CFIUS 
jurisdiction given the location of the real estate that is the subject 
of the transaction.
    (3) With respect to the foreign person engaged in the transaction 
and its parents:
    (i) A description of the business or businesses of the foreign 
person and its ultimate parent, and the CAGE codes, NAICS codes, and 
DUNS numbers, if any, for such businesses;
    (ii) The plans of the foreign person for the real estate with 
respect to:
    (A) Use and development of the real estate;
    (B) Changing the nature of the real estate including building new 
structures or removing or altering current structures, including the 
anticipated dimensions and any physical security measures employed at 
the real estate; and
    (C) Assigning, modifying, or terminating any leases, licenses, 
permits, easements, encumbrances, or other grants or approvals referred 
to in paragraph (b)(2)(iii) of this section;
    (iii) Whether the foreign person is controlled by or acting on 
behalf of a foreign government, including as an

[[Page 3179]]

agent or representative, or in some similar capacity, and if so, the 
identity of the foreign government;
    (iv) Whether a foreign government or a person controlled by or 
acting on behalf of a foreign government:
    (A) Has or controls property rights or has or controls ownership 
interests, including contingent equity interest, of the foreign person 
that is a party to the transaction or any parent of the foreign person, 
and if so, the nature and amount of any such interests, and with regard 
to contingent equity interest, the terms and timing of conversion;
    (B) Has the right or power to appoint any of the principal officers 
or the members of the board of directors (including other persons who 
perform the duties usually associated with such titles) of the foreign 
person that is a party to the transaction or any parent of that foreign 
person;
    (C) Holds any other contingent interest (for example, such as might 
arise from a lending transaction) in the foreign person that is a party 
to the transaction and, if so, the rights that are covered by this 
contingent interest, and the manner in which they would be enforced; or
    (D) Has any other affirmative or negative rights or powers with 
respect to control over the foreign person engaged in the transaction, 
and if there are any such rights or powers, their source (for example, 
a ``golden share,'' shareholders agreement, contract, statute, or 
regulation) and the mechanics of their operation;
    (v) Any formal or informal arrangements among foreign persons that 
hold an ownership interest in any foreign person that is a party to the 
transaction or between such foreign person and other foreign persons to 
act in concert on particular matters affecting the real estate that is 
the subject of the transaction, and provide a copy of any documents 
that establish those rights or describe those arrangements;
    (vi) For each member of the board of directors or equivalent 
governing body (including external directors and other persons who 
perform duties usually associated with such titles) and officers 
(including president, senior vice president, executive vice president, 
and other persons who perform duties normally associated with such 
titles) of the foreign person engaged in the transaction and its 
immediate, intermediate, and ultimate parents, and for any individual 
having an ownership interest of five percent or more in the foreign 
person engaged in the transaction and in the foreign person's ultimate 
parent, the following information:
    (A) A curriculum vitae or similar professional synopsis, provided 
as part of the main notice, and
    (B) The following ``personal identifier information,'' which, for 
privacy reasons, and to ensure limited distribution, shall be set forth 
in a separate document, not in the main notice:
    (1) Full name (last, first, middle name);
    (2) All other names and aliases used;
    (3) Business address;
    (4) Country and city of residence;
    (5) Date of birth, in the format MM/DD/YYYY;
    (6) Place of birth;
    (7) U.S. Social Security number (where applicable);
    (8) National identity number, including nationality, date and place 
of issuance, and expiration date (where applicable);
    (9) U.S. or foreign passport number (if more than one, all must be 
fully disclosed), nationality, date and place of issuance, and 
expiration date and, if a U.S. visa holder, the visa type and number, 
date and place of issuance, and expiration date; and
    (10) Dates and nature of foreign government and foreign military 
service (where applicable), other than military service at a rank below 
the top two non-commissioned ranks of the relevant foreign country; and
    (vii) The following ``business identifier information'' for the 
immediate, intermediate, and ultimate parents of the foreign person 
engaged in the transaction, including their main offices and branches:
    (A) Business name, including all names under which the business is 
known to be or has been doing business;
    (B) Business address;
    (C) Business phone number, website address, and email address; and
    (D) Employer identification number or other domestic tax or 
corporate identification number.
    (c) The voluntary notice shall list any filings with, or reports 
to, agencies of the U.S. Government that have been or will be made with 
respect to the transaction prior to its completion, indicating the 
agencies concerned, the nature of the filing or report, the date on 
which it was filed or the estimated date by which it will be filed, and 
a relevant contact point and/or telephone number within the agency, if 
known.
    (d) In the case of the establishment of a joint venture in which 
one or more of the parties is contributing covered real estate, 
information for the voluntary notice shall be prepared on the 
assumption that the foreign person that is party to the joint venture 
has made a purchase or lease, or been granted a concession to, the 
covered real estate that the other party to the joint venture is 
contributing or transferring to the joint venture. The voluntary notice 
shall describe the name and address of the joint venture and the 
entities that established, or are establishing, the joint venture.
    (e) Parties filing a voluntary notice shall, during the time that 
the matter is pending before the Committee or the President, promptly 
advise the Staff Chairperson of any material changes in plans, facts 
and circumstances addressed in the notice, and information provided or 
required to be provided to the Committee under this section, and shall 
file amendments to the notice to reflect such material changes. Such 
amendments shall become part of the notice filed by such persons under 
Sec.  802.501, and the certifications required under paragraphs (h) and 
(l) of this section shall apply to such amendments.
    (f) Parties filing a voluntary notice shall include:
    (1) A complete pre-transaction organizational chart (and post-
transaction, if different) including, information that identifies the 
name, principal place of business, and place of incorporation or other 
legal organization (for entities); nationality (for individuals); and 
ownership percentage (expressed in terms of both voting and economic 
interest, if different) for each of the following:
    (i) The immediate parent, the ultimate parent, and each 
intermediate parent, if any, of each foreign person that is a party to 
the transaction;
    (ii) Where the ultimate parent is a private company, the ultimate 
owner(s) of such parent; and
    (iii) Where the ultimate parent is a public company, any 
shareholder with an interest of greater than five percent in such 
parent.
    (2) The opinion of the person regarding whether:
    (i) It is a foreign person;
    (ii) It is controlled by a foreign government; and
    (iii) The transaction has resulted or could result in a foreign 
person being afforded property rights with respect to covered real 
estate, and the reasons for its view, focusing in particular on any 
powers (for example, by virtue of an agreement, statute, or regulation) 
that the foreign person will have with regard to the covered real 
estate, and how those powers can or will be exercised.
    (g) Parties filing a voluntary notice shall include information as 
to whether:

[[Page 3180]]

    (1) Any party to the transaction is, or has been, a party to a 
mitigation agreement entered into or condition imposed under section 
721, and if so, shall specify the date and purpose of such agreement or 
condition and the U.S. Government signatories; and
    (2) Any party to the transaction (including such party's parents, 
subsidiaries, or entities under common control with the party) has been 
a party to a transaction previously notified to the Committee.
    (h) Each party filing a voluntary notice shall provide a 
certification of the notice consistent with Sec.  802.202. A sample 
certification may be found on the Committee's section of the Department 
of the Treasury website.
    (i) Parties filing a voluntary notice shall include with the notice 
a list identifying each document provided as part of the notice, 
including all documents provided as attachments or exhibits to the 
narrative response.
    (j) A party filing a voluntary notice may stipulate that the 
transaction is a covered real estate transaction. A stipulation offered 
by any party under this section must be accompanied by a detailed 
description of the basis for the stipulation. 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 real estate 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 
real estate transaction.
    (k) In the case of a transaction where a U.S. public entity is a 
party to the transaction, the notifying party or parties may be the 
non-U.S. public entity. Each notifying party shall provide the 
information set out in this section with respect to itself and, to the 
extent known or reasonably available to it, with respect to the U.S. 
public entity.
    (l) At the conclusion of a review or investigation, each party that 
has filed additional information subsequent to the original notice 
shall file a final certification. (See Sec.  802.202.) A sample 
certification may be found at the Committee's section of the Department 
of the Treasury website.


Sec.  802.503  Beginning of 45-day review period.

    (a) The Staff Chairperson shall accept a voluntary notice the next 
business day after the Staff Chairperson has:
    (1) Determined that the notice complies with Sec.  802.502; and
    (2) Disseminated the notice to all members of the Committee.
    (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, or the Chairperson of the 
Committee has requested a notice under Sec.  802.501(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.
    (c) The Staff Chairperson shall promptly advise in writing all 
parties to a transaction that have filed a voluntary notice of:
    (1) The acceptance of the notice;
    (2) The date on which the review begins; and
    (3) The designation of any lead agency or agencies.
    (d) Within two business days after receipt of an agency notice by 
the Staff Chairperson, the Staff Chairperson shall send written advice 
of such notice to the parties to the transaction that is subject to the 
notice. Such written advice shall identify the date on which the review 
began.
    (e) The Staff Chairperson shall promptly circulate to all Committee 
members any draft pre-filing notice, any agency notice, any complete 
notice, and any subsequent information filed by the parties.


Sec.  802.504  Deferral, rejection, or disposition of certain voluntary 
notices.

    (a) The Committee, acting through the Staff Chairperson, may:
    (1) Reject any voluntary notice that does not comply with Sec.  
802.501 or Sec.  802.502 and so inform the parties promptly in writing;
    (2) Reject any voluntary notice at any time, and so inform the 
parties promptly in writing, if, after the notice has been submitted 
and before action by the Committee or the President has been concluded:
    (i) There is a material change in the transaction as to which 
notification has been made; or
    (ii) Information comes to light that contradicts material 
information provided in the notice by the parties;
    (3) Reject any voluntary notice at any time after the notice has 
been accepted, and so inform the parties promptly in writing, if the 
party or parties that have submitted the voluntary notice do not 
provide follow-up information requested by the Staff Chairperson within 
three business days of the request, or within a longer time frame if 
the parties so request in writing and the Staff Chairperson grants that 
request in writing; or
    (4) Reject any voluntary notice before the conclusion of a review 
or investigation, and so inform the parties promptly in writing, if one 
of the parties submitting the voluntary notice has not submitted the 
final certification required by Sec.  802.502(l).
    (b) Notwithstanding the authority of the Staff Chairperson under 
paragraph (a) of this section to reject an incomplete notice, the Staff 
Chairperson may defer acceptance of the notice, and the beginning of 
the review period specified by Sec.  802.503, to obtain any information 
required under this section that has not been submitted by the 
notifying party or parties or other parties to the transaction. Where 
necessary to obtain such information, the Staff Chairperson may inform 
any non-notifying party or parties that notice has been filed with 
respect to a transaction involving the party, and request that certain 
information required under this section, as specified by the Staff 
Chairperson, be provided to the Committee within seven days after 
receipt of the Staff Chairperson's request.
    (c) The Staff Chairperson shall notify the parties when the 
Committee has found that the transaction that is the subject of a 
voluntary notice is not a covered real estate transaction.
    (d) Example: The Staff Chairperson receives a joint notice from 
Corporation A, a foreign person, and Corporation X, a company that is 
selling covered real estate. The joint notice does not contain any 
information described under Sec.  802.502 concerning the nature of the 
real estate. The Staff Chairperson may reject the notice or defer the 
start of the review period until the parties have supplied the omitted 
information.


Sec.  802.505  Determination of whether to undertake an investigation.

    (a) After a review of a notified transaction under Sec.  802.503, 
the Committee shall undertake an investigation of any transaction that 
it has determined to be a covered real estate transaction if:
    (1) A member of the Committee (other than a member designated as ex 
officio under section 721(k)) advises the Staff Chairperson that the 
member believes that the transaction threatens to impair the national 
security of the United States and that the threat has not been 
mitigated; or

[[Page 3181]]

    (2) The lead agency recommends, and the Committee concurs, that an 
investigation be undertaken.
    (b) The Committee shall also undertake, after a review of a covered 
real estate transaction under Sec.  802.503, an investigation to 
determine the effects on national security of any covered real estate 
transaction that would result in control by a foreign person of 
critical infrastructure, as defined in Sec.  800.214 of this title, of 
or within the United States, if the Committee determines that the 
transaction could impair the national security and such impairment has 
not been mitigated.
    (c) The Committee shall undertake an investigation as described in 
paragraph (b) of this section unless the Chairperson of the Committee 
(or the Deputy Secretary of the Treasury) and the head of any lead 
agency (or his or her delegee at the deputy level or equivalent) 
designated by the Chairperson determine on the basis of the review that 
the covered real estate transaction will not impair the national 
security of the United States.


Sec.  802.506  Determination not to undertake an investigation.

    If the Committee determines, during the review period described in 
Sec.  802.503, not to undertake an investigation of a notified covered 
real estate transaction, action under section 721 shall be concluded. 
An official at the Department of the Treasury shall promptly inform the 
parties to a covered real estate transaction in writing of a 
determination of the Committee not to undertake an investigation and to 
conclude action under section 721.


Sec.  802.507  Commencement of investigation.

    (a) If it is determined that an investigation should be undertaken, 
such investigation shall commence no later than the end of the review 
period described in Sec.  802.503.
    (b) An official of the Department of the Treasury shall promptly 
inform the parties to a covered real estate transaction in writing of 
the commencement of an investigation.


Sec.  802.508  Completion or termination of investigation and report to 
the President.

    (a) Subject to paragraph (e) of this section, the Committee shall 
complete an investigation no later than the forty-fifth day after the 
date the investigation commences, or, if the forty-fifth day is not a 
business day, no later than the next business day after the forty-fifth 
day.
    (b) Upon completion or termination of any investigation, the 
Committee shall send a report to the President requesting the 
President's decision if:
    (1) The Committee recommends that the President suspend or prohibit 
the transaction;
    (2) The Committee is unable to reach a decision on whether to 
recommend that the President suspend or prohibit the transaction; or
    (3) The Committee requests that the President make a determination 
with regard to the transaction.
    (c) In circumstances when the Committee sends a report to the 
President requesting the President's decision with respect to a covered 
real estate transaction, such report shall include information relevant 
to sections 721(d)(4)(A) and (B), and shall present the Committee's 
recommendation. If the Committee is unable to reach a decision to 
present a single recommendation to the President, the Chairperson of 
the Committee shall submit a report of the Committee to the President 
setting forth the differing views and presenting the issues for 
decision.
    (d) Upon completion or termination of an investigation, if the 
Committee determines to conclude all deliberative action under section 
721 with regard to a notified covered real estate transaction without 
sending a report to the President, action under section 721 shall be 
concluded. An official at the Department of the Treasury shall promptly 
advise the parties to such a transaction in writing of a determination 
to conclude action.
    (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 under this paragraph with respect 
to a covered real estate transaction, the Committee shall promptly 
notify the parties to the transaction of the extension.
    (f) For purposes of paragraph (e) of this section, the term 
extraordinary circumstances means circumstances for which extending an 
investigation is necessary and the appropriate course of action, in the 
Chairperson's discretion, due to a force majeure event or to protect 
the national security of the United States.


Sec.  802.509  Withdrawal of notices.

    (a) A party (or parties) to a transaction that has filed notice 
under Sec.  802.501(a) may request in writing, at any time prior to 
conclusion of all action under section 721, that such notice be 
withdrawn. Such request shall be directed to the Staff Chairperson and 
shall state the reasons why the request is being made. Such requests 
will ordinarily be granted, unless otherwise determined by the 
Committee. An official of the Department of the Treasury will promptly 
advise the parties to the transaction in writing of the Committee's 
decision.
    (b) Any request to withdraw an agency notice by the agency that 
filed it shall be in writing and shall be effective only upon approval 
by the Committee. An official of the Department of the Treasury shall 
advise the parties to the transaction in writing of the Committee's 
decision to approve the withdrawal request within two business days of 
the Committee's decision.
    (c) In any case where a request to withdraw a notice is granted 
under paragraph (a) of this section:
    (1) The Staff Chairperson, in consultation with the Committee, 
shall establish, as appropriate:
    (i) A process for tracking actions that may be taken by any party 
to the covered real estate transaction before a notice is refiled under 
Sec.  802.501; and
    (ii) Interim protections to address specific national security 
concerns with the covered real estate transaction identified during the 
review or investigation of the covered real estate transaction.
    (2) The Staff Chairperson shall specify a time frame, as 
appropriate, for the parties to resubmit a notice and shall advise the 
parties of that time frame in writing.
    (d) A notice of a transaction that is submitted under paragraph 
(c)(2) of this section shall be deemed a new notice for purposes of the 
regulations in this part, including Sec.  802.701.

Subpart F--Committee Procedures


Sec.  802.601  General.

    (a) In any assessment, review, or investigation of a covered real 
estate transaction, the Committee should consider the factors specified 
in section 721(f), as applicable, and, as appropriate, require the 
parties to provide to the Committee the information necessary to 
consider such factors. The Committee's assessment, review, or 
investigation (if necessary) shall examine, as appropriate, whether:
    (1) The transaction is a covered real estate transaction;

[[Page 3182]]

    (2) There is credible evidence to support a belief that any foreign 
person party to a covered real estate transaction might take action 
that threatens to impair the national security of the United States; 
and
    (3) Provisions of law, other than section 721 and the International 
Emergency Economic Powers Act, provide adequate and appropriate 
authority to protect the national security of the United States.
    (b) During an assessment, review, or investigation, the Staff 
Chairperson may invite the parties to a notified transaction to attend 
a meeting with the Committee staff to discuss and clarify issues 
pertaining to the transaction. During an investigation, a party to the 
transaction under investigation may request a meeting with the 
Committee staff; such a request ordinarily will be granted.
    (c) The Staff Chairperson shall be the point of contact for 
receiving material filed with the Committee, including notices and 
declarations.
    (d) Where more than one lead agency is designated, communications 
on material matters between a party to the transaction and a lead 
agency shall include all lead agencies designated with regard to those 
matters.
    (e) The parties' description of a transaction in a declaration or 
notice does not limit the ability of the Committee to, as appropriate, 
assess, review, or investigate, or exercise any other authorities 
available under section 721 with respect to any covered real estate 
transaction that the Committee identifies as having been notified to 
the Committee based upon the facts set forth in the declaration or 
notice, any additional information provided to the Committee subsequent 
to the original declaration or notice, or any other information 
available to the Committee.


Sec.  802.602  Role of the Secretary of Labor.

    In response to a request from the Chairperson of the Committee, the 
Secretary of Labor shall identify for the Committee any risk mitigation 
provisions proposed to or by the Committee that would violate U.S. 
employment laws or require a party to violate U.S. employment laws. The 
Secretary of Labor shall serve no policy role on the Committee.


Sec.  802.603  Materiality.

    The Committee generally will not consider as material minor 
inaccuracies, omissions, or changes relating to financial or commercial 
factors not having a bearing on national security.


Sec.  802.604  Tolling of deadlines during lapse in appropriations.

    Any deadline or time limitation under subparts D or E imposed on 
the Committee shall be tolled during a lapse in appropriations.

Subpart G--Finality of Action


Sec.  802.701  Finality of actions under section 721.

    All authority available to the President or the Committee under 
section 721(d), including divestment authority, shall remain available 
at the discretion of the President with respect to any covered real 
estate transaction. Subject to Sec.  802.501(c)(1)(ii), such authority 
shall not be exercised if:
    (a) The Committee, through its Staff Chairperson, has advised a 
party (or the parties) in writing that a particular transaction with 
respect to which a voluntary notice or a declaration has been filed is 
not a covered real estate transaction;
    (b) The parties to the transaction have been advised in writing 
under Sec.  802.405(a)(4), Sec.  802.506, or Sec.  802.508(d) that the 
Committee has concluded all action under section 721 with respect to 
the covered real estate transaction; or
    (c) The President has previously announced, under section 721(d), 
his or her decision not to exercise his or her authority under section 
721 with respect to the covered real estate transaction.

Subpart H--Provision and Handling of Information


Sec.  802.801  Obligation of parties to provide information.

    (a) Parties to a transaction that is notified or declared under 
subpart D or E, or a transaction for which no notice or declaration has 
been submitted and for which the Staff Chairperson has requested 
information to assess whether the transaction is a covered real estate 
transaction, shall provide information to the Staff Chairperson that 
will enable the Committee to conduct a full assessment, review, and/or 
investigation of the transaction. Parties to a transaction that have 
filed information with the Committee shall promptly advise the Staff 
Chairperson of any material changes to such information. If deemed 
necessary by the Committee, information may be obtained from parties to 
a transaction or other persons through subpoena or otherwise, under the 
Defense Production Act Reauthorization of 2003, as amended (50 U.S.C. 
4555(a)).
    (b) Documentary materials or information required or requested to 
be filed with the Committee under this part shall be submitted in 
English. Supplementary materials written in a foreign language shall be 
submitted in certified English translation.
    (c) Any information filed with the Committee in connection with any 
action for which a report is required under section 721(l)(6)(B) with 
respect to the implementation of a mitigation agreement or condition 
described in section 721(l)(3)(A) shall be accompanied by a 
certification that complies with the requirements of section 721(n) and 
Sec.  802.202. A sample certification may be found at the Committee's 
section of the Department of the Treasury website.


Sec.  802.802  Confidentiality.

    (a) Except as provided in paragraph (b) of this section, any 
information or documentary material submitted or filed with the 
Committee under this part, including information or documentary 
material filed under Sec.  802.501(g), shall be exempt from disclosure 
under the Freedom of Information Act, as amended (5 U.S.C. 552 et 
seq.), 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;
    (c) This section shall continue to apply with respect to 
information and documentary material submitted or filed with the 
Committee in any case where:
    (1) Action has concluded under section 721 concerning a notified 
transaction;
    (2) A request to withdraw a notice or a declaration is granted 
under Sec.  802.509 or Sec.  802.404(c), respectively, or where a 
notice or a declaration has been rejected under Sec.  802.504(a) or 
Sec.  802.404(a), respectively;
    (3) The Committee determines that a notified or declared 
transaction is not a covered real estate transaction; or

[[Page 3183]]

    (4) Such information or documentary material was filed under 
subpart D and the parties do not subsequently file a notice under 
subpart E.
    (d) Nothing in paragraph (a) of this section shall be interpreted 
to prohibit the public disclosure by a party of documentary material or 
information that it has submitted or filed with the Committee. Any such 
documentary material or information so disclosed may subsequently be 
reflected in the public statements of the Chairperson, who is 
authorized to communicate with the public and the Congress on behalf of 
the Committee, or of the Chairperson's designee.
    (e) The provisions of the Defense Production Act Reauthorization of 
2003, as amended (50 U.S.C. 4555(d)) relating to fines and imprisonment 
shall apply with respect to the disclosure of information or 
documentary material filed with the Committee under these regulations.

Subpart I--Penalties and Damages


Sec.  802.901  Penalties and damages.

    (a) Any person who submits a declaration or notice with a material 
misstatement or omission or makes a false certification under Sec.  
802.402, Sec.  802.403, or Sec.  802.502 may be liable to the United 
States for a civil penalty not to exceed $250,000 per violation. The 
amount of the penalty imposed for a violation shall be based on the 
nature of the violation.
    (b) Any person who violates a material provision of a mitigation 
agreement with, a material condition imposed by, or an order issued 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. For clarification, 
under the previous sentence, whichever penalty amount is greater may be 
imposed per violation, and the amount of the penalty imposed for a 
violation shall be based on the nature of the violation.
    (c) A mitigation agreement entered into or amended under section 
721(l) may include a provision providing for liquidated or actual 
damages for breaches of the agreement. The mitigation agreement shall 
specify the amount of any liquidated damages that are a reasonable 
assessment of the harm to the national security that could result from 
a breach of the agreement. Any mitigation agreement containing a 
liquidated damages provision shall include a provision specifying that 
the Committee may consider the severity of the breach in deciding 
whether to seek a lesser amount than that stipulated in the agreement.
    (d) A determination to impose penalties under paragraph (a) or (b) 
of this section must be made by the Committee. Notice of the penalty, 
including a written explanation of the conduct to be penalized and the 
amount of the penalty, shall be sent to the subject person 
electronically and by U.S. mail or courier service. Notice shall be 
deemed to have been effected by the earlier of the date of electronic 
transmission and the date of receipt of U.S. mail or courier service. 
For the purposes of this section, the term subject person means the 
person or persons who may be liable to the United States for a civil 
penalty.
    (e) Upon receiving notice of a penalty to be imposed under 
paragraphs (a) through (c) of this section, the subject person may, 
within 15 business days of receipt of such notice, submit a petition 
for reconsideration to the Staff Chairperson, including a defense, 
justification, or explanation for the conduct to be penalized. The 
Committee will review the petition and issue any final penalty 
determination within 15 business days of receipt of the petition. The 
Staff Chairperson and the subject person may extend either such period 
through written agreement. The Committee and the subject person may 
reach an agreement on an appropriate remedy at any time before the 
Committee issues any final penalty determination.
    (f) The penalties and damages authorized in paragraphs (a) through 
(c) of this section may be recovered in a civil action brought by the 
United States in federal district court.
    (g) Section 2 of the False Statements Accountability Act of 1996, 
as amended (18 U.S.C. 1001), shall apply to all information provided to 
the Committee under section 721, including by any party to a covered 
real estate transaction.
    (h) The penalties and damages available under this section are 
without prejudice to other penalties, civil or criminal, available 
under law.
    (i) The imposition of a civil monetary penalty or damages under 
these regulations creates a debt due to the U.S. Government. The 
Department of the Treasury may take action to collect the penalty or 
damages assessed if not paid within the time prescribed by the 
Committee and notified to the applicable party or parties. In addition 
or instead, the matter may be referred to the Department of Justice for 
appropriate action to recover the penalty or damages.


Sec.  802.902   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 a lead 
agency in coordination with the Staff Chairperson, 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 a lead agency in coordination with the Staff Chairperson 
may, in addition to the authority of the Committee to impose penalties 
under section 721(h) and to unilaterally initiate a review of any 
covered real estate transaction under 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 or 
declaration under clause (i) of section 721(b)(1)(C) with respect to a 
covered real estate 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.

Subpart J--Foreign National Security Investment Review Regimes


Sec.  802.1001   Determinations.

    (a) The Committee may determine at any time that a foreign state 
has made significant progress toward establishing and effectively 
utilizing a robust process to analyze foreign investments for national 
security risks and to facilitate coordination with the United States on 
matters relating to investment security.
    (b) The Committee may rescind a determination under paragraph (a) 
of this section if the Committee determines that such a rescission is 
appropriate.
    (c) The Chairperson of the Committee shall publish a notice of any 
determination or rescission of a determination under paragraph (a) or 
(b) of this section, respectively, in the Federal Register.


Sec.  802.1002   Effect of determinations.

    (a) A determination under Sec.  802.1001(a) shall take effect 
immediately upon publication of a notice of such determination under 
Sec.  802.1001(c) and remain in effect unless rescinded under Sec.  
802.1001(b).
    (b) A rescission of a determination under Sec.  802.1001(b) shall 
take effect on

[[Page 3184]]

the date specified in the notice published under Sec.  802.1001(c).
    (c) A determination under Sec.  802.1001(a) does not apply to any 
transaction for which a declaration or notice has been accepted by the 
Staff Chairperson under Sec.  802.403(a)(1) or Sec.  802.503(a), 
respectively.
    (d) A rescission of a determination under Sec.  802.1001(b) does 
not apply to any transaction for which:
    (1) The completion date is prior to the date upon which the 
rescission of a determination under paragraph (b) of this section 
becomes effective; or
    (2) Before publication of the rescission of determination under 
Sec.  802.1001(c), the parties to the transaction have executed a 
binding written agreement, or other binding document, establishing the 
material terms of the transaction that is ultimately consummated.

Appendix A to Part 802--List of Military Installations and Other U.S. 
Government Sites

----------------------------------------------------------------------------------------------------------------
                  Site name                                                 Location
----------------------------------------------------------------------------------------------------------------
                                                     Part 1
----------------------------------------------------------------------------------------------------------------
Adelphi Laboratory Center....................  Adelphi, MD.
Air Force Maui Optical and Supercomputing      Maui, HI.
 Site.
Air Force Office of Scientific Research......  Arlington, VA.
Andersen Air Force Base......................  Yigo, Guam.
Army Futures Command.........................  Austin, TX.
Army Research Lab--Orlando Simulations and     Orlando, FL.
 Training Technology Center.
Army Research Lab--Raleigh Durham............  Raleigh Durham, NC.
Arnold Air Force Base........................  Coffee County and Franklin County, TN.
Beale Air Force Base.........................  Yuba City, CA.
Biometric Technology Center (Biometrics        Clarksburg, WV.
 Identity Management Activity).
Buckley Air Force Base.......................  Aurora, CO.
Camp MacKall.................................  Pinebluff, NC.
Cape Cod Air Force Station...................  Sandwich, MA.
Cape Newenham Long Range Radar Site..........  Cape Newenham, AK.
Cavalier Air Force Station...................  Cavalier, ND.
Cheyenne Mountain Air Force Station..........  Colorado Springs, CO.
Clear Air Force Station......................  Anderson, AK.
Creech Air Force Base........................  Indian Springs, NV.
Davis-Monthan Air Force Base.................  Tucson, AZ.
Defense Advanced Research Projects Agency....  Arlington, VA.
Eareckson Air Force Station..................  Shemya, AK.
Eielson Air Force Base.......................  Fairbanks, AK.
Ellington Field Joint Reserve Base...........  Houston, TX.
Fairchild Air Force Base.....................  Spokane, WA.
Fort Benning.................................  Columbus, GA.
Fort Belvoir.................................  Fairfax County, VA.
Fort Bliss...................................  El Paso, TX.
Fort Campbell................................  Hopkinsville, KY.
Fort Carson..................................  Colorado Springs, CO.
Fort Detrick.................................  Frederick, MD.
Fort Drum....................................  Watertown, NY.
Fort Gordon..................................  Augusta, GA.
Fort Hood....................................  Killeen, TX.
Fort Knox....................................  Fort Knox, KY.
Fort Leavenworth.............................  Leavenworth, KS.
Fort Lee.....................................  Petersburg, VA.
Fort Leonard Wood............................  Pulaski County, MO.
Fort Meade...................................  Anne Arundel County, MD.
Fort Riley...................................  Junction City, KS.
Fort Shafter.................................  Honolulu, HI.
Fort Sill....................................  Lawton, OK.
Fort Stewart.................................  Hinesville, GA.
Fort Yukon Long Range Radar Site.............  Fort Yukon, AK.
Francis E. Warren Air Force Base.............  Cheyenne, WY.
Guam Tracking Station........................  Inarajan, Guam.
Hanscom Air Force Base.......................  Lexington, MA.
Holloman Air Force Base......................  Alamogordo, NM.
Holston Army Ammunition Plant................  Kingsport, TN.
Joint Base Anacostia-Bolling.................  Washington, DC.
Joint Base Andrews...........................  Camp Springs, MD.
Joint Base Elmendorf-Richardson..............  Anchorage, AK.
Joint Base Langley-Eustis....................  Hampton, VA and Newport News, VA.
Joint Base Lewis-McChord.....................  Tacoma, WA.
Joint Base McGuire-Dix-Lakehurst.............  Lakehurst, NJ.
Joint Base Pearl Harbor-Hickam...............  Honolulu, HI.
Joint Base San Antonio.......................  San Antonio, TX.
Joint Expeditionary Base Little Creek-Fort     Virginia Beach, VA.
 Story.
Kaena Point Satellite Tracking Station.......  Waianae, HI.
King Salmon Air Force Station................  King Salmon, AK.
Kirtland Air Force Base......................  Albuquerque, NM.
Kodiak Tracking Stations.....................  Kodiak Island, AK.

[[Page 3185]]

 
Los Angeles Air Force Base...................  El Segundo, CA.
MacDill Air Force Base.......................  Tampa, FL.
Malmstrom Air Force Base.....................  Great Falls, MT.
Marine Corps Air Ground Combat Center          Twentynine Palms, CA.
 Twentynine Palms.
Marine Corps Air Station Beaufort............  Beaufort, SC.
Marine Corps Air Station Cherry Point........  Cherry Point, NC.
Marine Corps Air Station Miramar.............  San Diego, CA.
Marine Corps Air Station New River...........  Jacksonville, NC.
Marine Corps Air Station Yuma................  Yuma, AZ.
Marine Corps Base Camp Lejeune...............  Jacksonville, NC.
Marine Corps Base Camp Pendleton.............  Oceanside, CA.
Marine Corps Base Hawaii.....................  Kaneohe Bay, HI.
Marine Corps Base Hawaii, Camp H.M. Smith....  Halawa, HI.
Marine Corps Base Quantico...................  Quantico, VA.
Mark Center..................................  Alexandria, VA.
Minot Air Force Base.........................  Minot, ND.
Moody Air Force Base.........................  Valdosta, GA.
Naval Air Station Joint Reserve Base New       Belle Chasse, LA.
 Orleans.
Naval Air Station Oceana.....................  Virginia Beach, VA.
Naval Air Station Oceana Dam Neck Annex......  Virginia Beach, VA.
Naval Air Station Whidbey Island.............  Oak Harbor, WA.
Naval Base Guam..............................  Apra Harbor, Guam.
Naval Base Kitsap Bangor.....................  Silverdale, WA.
Naval Base Point Loma........................  San Diego, CA.
Naval Base San Diego.........................  San Diego, CA.
Naval Base Ventura County--Port Hueneme        Port Hueneme, CA.
 Operating Facility.
Naval Research Laboratory....................  Washington, DC.
Naval Research Laboratory--Blossom Point.....  Welcome, MD.
Naval Research Laboratory--Stennis Space       Hancock County, MS.
 Center.
Naval Research Laboratory--Tilghman..........  Tilghman, MD.
Naval Station Newport........................  Newport, RI.
Naval Station Norfolk........................  Norfolk, VA.
Naval Submarine Base Kings Bay...............  Kings Bay, GA.
Naval Submarine Base New London..............  Groton, CT.
Naval Surface Warfare Center Carderock         Bayview, ID.
 Division--Acoustic Research Detachment.
Naval Support Activity Crane.................  Crane, IN.
Naval Support Activity Orlando...............  Orlando, FL.
Naval Support Activity Panama City...........  Panama City, FL.
Naval Support Activity Philadelphia..........  Philadelphia, PA.
Naval Support Facility Carderock.............  Bethesda, MD.
Naval Support Facility Dahlgren..............  Dahlgren, VA.
Naval Support Facility Indian Head...........  Indian Head, MD.
Naval Weapons Station Seal Beach Detachment    Norco, CA.
 Norco.
New Boston Air Station.......................  New Boston, NH.
Offutt Air Force Base........................  Bellevue, NE.
Oliktok Long Range Radar Site................  Oliktok, AK.
Orchard Combat Training Center...............  Boise, ID.
Peason Ridge Training Area...................  Leesville, LA.
Pentagon.....................................  Arlington, VA.
Peterson Air Force Base......................  Colorado Springs, CO.
Picatinny Arsenal............................  Morris County, NJ.
Pi[ntilde]on Canyon Maneuver Site............  Tyrone, CO.
Pohakuloa Training Area......................  Hilo, HI.
Point Barrow Long Range Radar Site...........  Point Barrow, AK.
Portsmouth Naval Shipyard....................  Kittery, ME.
Radford Army Ammunition Plant................  Radford, VA.
Redstone Arsenal.............................  Huntsville, AL.
Rock Island Arsenal..........................  Rock Island, IL.
Rome Research Laboratory.....................  Rome, NY.
Schriever Air Force Base.....................  Colorado Springs, CO.
Seymour Johnson Air Force Base...............  Goldsboro, NC.
Shaw Air Force Base..........................  Sumter, SC.
Southeast Alaska Acoustic Measurement          Ketchikan, AK.
 Facility.
Tin City Long Range Radar Site...............  Tin City, AK.
Tinker Air Force Base........................  Midwest City, OK.
Travis Air Force Base........................  Fairfield, CA.
Tyndall Air Force Base.......................  Bay County, FL.
U.S. Army Natick Soldier Systems Center......  Natick, MA.
Watervliet Arsenal...........................  Watervliet, NY.
Wright-Patterson Air Force Base..............  Dayton, OH.
----------------------------------------------------------------------------------------------------------------


[[Page 3186]]


 
 
----------------------------------------------------------------------------------------------------------------
                                                     Part 2
----------------------------------------------------------------------------------------------------------------
Aberdeen Proving Ground......................  Aberdeen, MD.
Camp Shelby..................................  Hattiesburg, MS.
Cape Canaveral Air Force Station.............  Cape Canaveral, FL.
Dare County Range............................  Manns Harbor, NC.
Edwards Air Force Base.......................  Edwards, CA.
Eglin Air Force Base.........................  Valparaiso, FL.
Fallon Range Complex.........................  Fallon, NV.
Fort Bragg...................................  Fayetteville, NC.
Fort Greely..................................  Delta Junction, AK.
Fort Huachuca................................  Sierra Vista, AZ.
Fort Irwin...................................  San Bernardino County, CA.
Fort Polk....................................  Leesville, LA.
Fort Wainwright..............................  Fairbanks, AK.
Hardwood Range...............................  Necehuenemedah, WI.
Hill Air Force Base..........................  Ogden, UT.
Mountain Home Air Force Base.................  Mountain Home, ID.
Naval Air Station Meridian...................  Meridian, MS.
Naval Air Station Patuxent River.............  Lexington Park, MD.
Naval Air Weapons Station China Lake.........  Ridgecrest, CA.
Naval Base Kitsap--Keyport...................  Keyport, WA.
Naval Base Ventura County--Point Mugu          Point Mugu, CA.
 Operating Facility.
Naval Weapons Systems Training Facility        Boardman, OR.
 Boardman.
Nellis Air Force Base........................  Las Vegas, NV.
Nevada Test and Training Range...............  Tonopah, NV.
Pacific Missile Range Facility...............  Kekaha, HI.
Patrick Air Force Base.......................  Cocoa Beach, FL.
Tropic Regions Test Center...................  Wahiawa, HI.
Utah Test and Training Range.................  Barro, UT.
Vandenberg Air Force Base....................  Lompoc, CA.
West Desert Test Center......................  Dugway, UT.
White Sands Missile Range....................  White Sands Missile Range, NM.
Yuma Proving Ground..........................  Yuma, AZ.
----------------------------------------------------------------------------------------------------------------


 
              Site name                                  County                            Township/range
----------------------------------------------------------------------------------------------------------------
                                                     Part 3
----------------------------------------------------------------------------------------------------------------
90th Missile Wing, Francis E. Warren   Logan, CO.................................  All lands except those
 Air Force Base Missile Field                                                       located south of Township 8
 (Colorado, Nebraska, and Wyoming).                                                 North and east of Range 51
                                                                                    West using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Morgan, CO................................  All lands located north of
                                                                                    Township 3 North using the
                                                                                    Bureau of Land Management's
                                                                                    Public Lands Survey System.
                                       Sedgwick, CO..............................  All lands except those
                                                                                    located east of Range 46
                                                                                    West using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Washington, CO............................  All lands located north of
                                                                                    Township 4 North, and west
                                                                                    of Range 52 West using the
                                                                                    Bureau of Land Management's
                                                                                    Public Lands Survey System.
                                       Weld, CO..................................  All lands located north of
                                                                                    Township 4 North, and east
                                                                                    of Range 64 West using the
                                                                                    Bureau of Land Management's
                                                                                    Public Lands Survey System.
                                       Banner, NE................................  All.
                                       Cheyenne, NE..............................  All.
                                       Deuel, NE.................................  All lands located south of
                                                                                    Township 15 North, and west
                                                                                    of Range 43 West using the
                                                                                    Bureau of Land Management's
                                                                                    Public Lands Survey System.
                                       Garden, NE................................  All lands located south of
                                                                                    Township 19 North, and west
                                                                                    Range 43 West using the
                                                                                    Bureau of Land Management's
                                                                                    Public Lands Survey System.
                                       Kimball, NE...............................  All.
                                       Morrill, NE...............................  All lands except those
                                                                                    located north of Township 21
                                                                                    North using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Scotts Bluff, NE..........................  All.
                                       Sioux, NE.................................  All lands except those
                                                                                    located north of Township 26
                                                                                    North, and east of Range 57
                                                                                    West using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Goshen, WY................................  All lands except those
                                                                                    located north of Township 27
                                                                                    North using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Laramie, WY...............................  All lands except those
                                                                                    located south of Township 14
                                                                                    North, and west of Range 64
                                                                                    West using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.

[[Page 3187]]

 
                                       Platte, WY................................  All lands except those
                                                                                    located north of Township 27
                                                                                    North using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
341st Missile Wing, Malmstrom Air      Blaine, MT................................  All lands except those
 Force Base Missile Field (Montana).                                                located north of Township 24
                                                                                    North using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Cascade, MT...............................  All.
                                       Chouteau, MT..............................  All lands except those
                                                                                    located north of Township 24
                                                                                    North, and east of Range 8
                                                                                    East using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Fergus, MT................................  All lands except those
                                                                                    located east of Range 26
                                                                                    East using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Glacier, MT...............................  All lands located south of
                                                                                    Township 35 North, and east
                                                                                    of Range 7 West, using the
                                                                                    Bureau of Land Management's
                                                                                    Public Lands Survey System.
                                       Golden Valley, MT.........................  All lands except those
                                                                                    located south of Township 11
                                                                                    North, and east of Range 20
                                                                                    East using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Judith Basin, MT..........................  All.
                                       Lewis and Clark, MT.......................  All lands except those
                                                                                    located south of Township 14
                                                                                    North using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Liberty, MT...............................  All lands except those
                                                                                    located north of Township 31
                                                                                    North, and east of Range 5
                                                                                    East using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Meagher, MT...............................  All lands except those
                                                                                    located south of Township 12
                                                                                    North, and west of Range 9
                                                                                    East using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Musselshell, MT...........................  All lands located north of
                                                                                    Township 10 North, and west
                                                                                    of Range 23 East using the
                                                                                    Bureau of Land Management's
                                                                                    Public Lands Survey System.
                                       Petroleum, MT.............................  All lands located west of
                                                                                    Range 27 East using the
                                                                                    Bureau of Land Management's
                                                                                    Public Lands Survey System.
                                       Phillips, MT..............................  All lands located south of
                                                                                    Township 23 North, and west
                                                                                    of Range 25 East using the
                                                                                    Bureau of Land Management's
                                                                                    Public Lands Survey System.
                                       Pondera, MT...............................  All lands except those
                                                                                    located west of Range 9
                                                                                    West, using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Stillwater, MT............................  All lands located north of
                                                                                    Township 3 North, and west
                                                                                    of Range 20 East using the
                                                                                    Bureau of Land Management's
                                                                                    Public Lands Survey System.
                                       Sweet Grass, MT...........................  All lands located north of
                                                                                    Township 3 North, and east
                                                                                    of Range 12 East using the
                                                                                    Bureau of Land Management's
                                                                                    Public Lands Survey System.
                                       Teton, MT.................................  All lands except those
                                                                                    located west of Range 10
                                                                                    West using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Toole, MT.................................  All lands except those
                                                                                    located north of Township 34
                                                                                    North using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Wheatland, MT.............................  All.
91st Missile Wing, Minot Air Force     Bottineau, ND.............................  All lands except those
 Base Missile Field (North Dakota).                                                 located east of Range 77
                                                                                    West using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Burke, ND.................................  All lands except those
                                                                                    located west of Range 93
                                                                                    West using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Dunn, ND..................................  All lands located north of
                                                                                    Township 148 North, using
                                                                                    the Bureau of Land
                                                                                    Management's Public Lands
                                                                                    Survey System.
                                       McHenry, ND...............................  All lands except those
                                                                                    located north of Township
                                                                                    156 North, and east of Range
                                                                                    80 West using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       McKenzie, ND..............................  All lands located east of
                                                                                    Range 95 West, using the
                                                                                    Bureau of Land Management's
                                                                                    Public Lands Survey System.
                                       McLean, ND................................  All lands except those
                                                                                    located south of Township
                                                                                    145 North using the Bureau
                                                                                    of Land Management's Public
                                                                                    Lands Survey System.

[[Page 3188]]

 
                                       Mercer, ND................................  All lands located north of
                                                                                    Township 145 North, east of
                                                                                    Range 90 West, using the
                                                                                    Bureau of Land Management's
                                                                                    Public Lands Survey System.
                                       Mountrail, ND.............................  All.
                                       Pierce, ND................................  All lands located south of
                                                                                    Township 155 North, west of
                                                                                    Range 72 West using the
                                                                                    Bureau of Land Management's
                                                                                    Public Lands Survey System.
                                       Renville, ND..............................  All.
                                       Sheridan, ND..............................  All lands except those
                                                                                    located south of Township
                                                                                    148 North, and east of Range
                                                                                    78 West using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Ward, ND..................................  All lands except those
                                                                                    located north of Township
                                                                                    155 North, and east of Range
                                                                                    83 West using the Bureau of
                                                                                    Land Management's Public
                                                                                    Lands Survey System.
                                       Williams, ND..............................  All lands located south of
                                                                                    Township 158 North, and east
                                                                                    of Range 96 West using the
                                                                                    Bureau of Land Management's
                                                                                    Public Lands Survey System.
----------------------------------------------------------------------------------------------------------------


 
            Site name                            Location
------------------------------------------------------------------------
                                 Part 4
------------------------------------------------------------------------
Boston Range Complex............  Offshore Massachusetts, New Hampshire,
                                   Maine.
Boston Operating Area...........  Offshore Massachusetts, New Hampshire,
                                   Maine.
Charleston Operating Area.......  Offshore North Carolina, South
                                   Carolina.
Cherry Point Operating Area.....  Offshore North Carolina, South
                                   Carolina.
Corpus Christi Operating Area...  Offshore Texas.
Eglin Gulf Test and Training      Offshore Florida.
 Range.
Gulf of Mexico Range Complex....  Offshore Mississippi, Alabama,
                                   Florida.
Hawaii Range Complex............  Offshore Hawaii.
Jacksonville Operating Area.....  Offshore Florida, Georgia.
Jacksonville Range Complex......  Offshore Florida.
Key West Operating Area.........  Offshore Florida.
Key West Range Complex..........  Offshore Florida.
Narragansett Bay Range Complex..  Offshore Connecticut, Massachusetts,
                                   New York, Rhode Island.
Narragansett Bay Operating Area.  Offshore Connecticut, Massachusetts,
                                   New York, Rhode Island.
New Orleans Operating Area......  Offshore Louisiana.
Northern California Range         Offshore California.
 Complex.
Northwest Training Range Complex  Offshore Oregon, Washington.
Panama City Operating Area......  Offshore Florida.
Pensacola Operating Area........  Offshore Alabama, Florida.
Point Mugu Sea Range............  Offshore California.
Southern California Range         Offshore California.
 Complex.
Virginia Capes Operating Area...  Offshore Delaware, Maryland, North
                                   Carolina, Virginia.
Virginia Capes Range Complex....  Offshore Delaware, Maryland, North
                                   Carolina, Virginia.
------------------------------------------------------------------------


    Dated: January 6, 2020.
Thomas Feddo,
Assistant Secretary for Investment Security.
[FR Doc. 2020-00187 Filed 1-13-20; 4:15 pm]
 BILLING CODE 4810-25-P

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