Definition of “Principal Place of Business”; Filing Fees for Notices of Certain Investments in the United States by Foreign Persons and Certain Transactions by Foreign Persons Involving Real Estate in the United States, 45311-45313 [2020-15336]
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Federal Register / Vol. 85, No. 145 / Tuesday, July 28, 2020 / Rules and Regulations
Poloxalene in grams/
ton
Indications for use
Limitations
(1) To deliver 1 to 2
grams per 100
pounds of body
weight.
Cattle: For prevention of legume (alfalfa, clover) and
wheat pasture bloat in cattle.
Dosage is 1 gram of poloxalene per 100 pounds of
body weight daily and continued during exposure
to bloat producing conditions. If bloating conditions
are severe, the dose is doubled. Treatment should
be started 2 to 3 days before exposure to bloatproducing conditions. Repeat dosage if animals
are exposed to bloat-producing conditions more
than 12 hours after the last treatment. Do not exceed the higher dosage levels in any 24-hour period.
45311
Sponsor
054771
(2) [Reserved]
§ 558. 500
[Amended]
(21 CFR 514.116), notice is given that
approval of ANADA 200–323, and all
supplements and amendments thereto,
is hereby withdrawn, effective July 28,
2020.
Elsewhere in this issue of the Federal
Register, FDA is amending the animal
drug regulations to reflect the voluntary
withdrawal of approval of these
applications.
24. In § 558.500, remove reserved
paragraphs (e)(1)(iii) and (iv).
■
Dated: July 15, 2020.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2020–15760 Filed 7–27–20; 8:45 am]
BILLING CODE 4164–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Dated: July 15, 2020.
Lauren K. Roth,
Associate Commissioner for Policy.
Food and Drug Administration
[FR Doc. 2020–15761 Filed 7–27–20; 8:45 am]
BILLING CODE 4164–01–P
21 CFR Part 520
[Docket No. FDA–2020–N–0002]
DEPARTMENT OF THE TREASURY
New Animal Drugs; Withdrawal of
Approval of Abbreviated New Animal
Drug Application
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notification of withdrawal.
The Food and Drug
Administration (FDA) is withdrawing
approval of an abbreviated new animal
drug application (ANADA) at the
sponsor’s request because the product is
no longer manufactured or marketed.
DATES: Withdrawal of approval is
effective July 28, 2020.
FOR FURTHER INFORMATION CONTACT:
Sujaya Dessai, Center for Veterinary
Medicine (HFV–212), Food and Drug
Administration, 7519 Standish Pl.,
Rockville, MD 20855, 240–402–5761,
sujaya.dessai@fda.hhs.gov.
SUPPLEMENTARY INFORMATION: Hikma
International Pharmaceuticals LLC, P.O.
Box 182400, Bayader Wadi Seer,
Amman, Jordan 11118, has requested
that FDA withdraw approval of ANADA
200–323 for use of a 1-gram bolus of
phenylbutazone in horses because the
product is no longer manufactured or
marketed.
Therefore, under authority delegated
to the Commissioner of Food and Drugs
and in accordance with § 514.116 Notice
of withdrawal of approval of application
khammond on DSKJM1Z7X2PROD with RULES
SUMMARY:
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Office of Investment Security
31 CFR Parts 800 and 802
RIN 1505–AC63, 1505–AC64, 1505–AC65
Definition of ‘‘Principal Place of
Business’’; Filing Fees for Notices of
Certain Investments in the United
States by Foreign Persons and Certain
Transactions by Foreign Persons
Involving Real Estate in the United
States
Office of Investment Security,
Department of the Treasury.
ACTION: Final rule.
AGENCY:
The final rule makes a
clarifying revision to the definition of
‘‘principal place of business’’ and
adopts the interim rule establishing a
fee for parties filing a formal written
notice of a transaction for review by the
Committee on Foreign Investment in the
United States.
DATES: The final rule is effective on
August 27, 2020.
FOR FURTHER INFORMATION CONTACT: For
questions about this rule, contact: Laura
Black, Director of Investment Security
Policy and International Relations;
Meena R. Sharma, Deputy Director of
Investment Security Policy and
International Relations; David Shogren,
SUMMARY:
PO 00000
Frm 00009
Fmt 4700
Sfmt 4700
Senior Policy Advisor; 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. Definition of ‘‘Principal Place of
Business’’
On January 17, 2020, the Department
of the Treasury (Treasury Department)
published two interim rules, each
effective February 13, 2020, that
provided a definition for the term
‘‘principal place of business’’ as
applicable to transactions subject to
review by the Committee on Foreign
Investment in the United States (CFIUS
or the Committee). 85 FR 3112 (January
17, 2020); 85 FR 3158 (January 17,
2020). The preambles to the interim
rules provide background on this
definition. While the definition took
effect on February 13, 2020, the public
was provided an opportunity to
comment. The Treasury Department
received several comments, which are
discussed further below.
B. Filing Fees for Formal Written
Notices
On March 9, 2020, the Treasury
Department published a notice of
proposed rulemaking amending 31 CFR
part 800 and 31 CFR part 802 to
establish a fee for ‘‘covered
transactions’’ and ‘‘covered real estate
transactions,’’ respectively, that are filed
with CFIUS as formal written notices.
85 FR 13586 (March 9, 2020). The
public was provided an opportunity to
comment on the proposed rule and
several comments were received.
Following consideration of the public
comments, on April 29, 2020, the
Treasury Department published an
interim rule establishing filing fees,
effective May 1, 2020. 85 FR 23736
(April 29, 2020). As explained in the
preamble to the interim rule, subpart K
on filing fees was added to the
E:\FR\FM\28JYR1.SGM
28JYR1
45312
Federal Register / Vol. 85, No. 145 / Tuesday, July 28, 2020 / Rules and Regulations
regulations at 31 CFR part 800 and 31
CFR part 802, and a limited number of
revisions were made to other related
sections of those regulations.
Additionally, the preamble to the
interim rule included a discussion of
the public comments received on the
proposed fee rule. While the Treasury
Department began collecting fees on
May 1, 2020, it determined that the
public and the Committee would benefit
from an additional comment period,
which ended on June 1, 2020.
Comments received during the
additional comment period are
discussed below.
The preambles to the proposed rule
and the interim rule provide additional
information on the Committee’s
statutory authority and requirements
with respect to filing fees, and various
factors that were considered in
establishing the filing fee regulations.
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II. Summary of Comments and Change
From the Interim Rules
During the public comment periods
for each of the interim rules discussed
above, the Treasury Department
received written submissions reflecting
a range of views. All comments received
by the end of each comment period are
available on the public rulemaking
dockets at https://www.regulations.gov.
The section-by-section analysis below
discusses the comments and describes a
clarifying revision.
A. Definition of ‘‘Principal Place of
Business’’—Sections 800.239 and
802.232
Several written submissions were
received on the interim rules defining
the term ‘‘principal place of business.’’
In general, commenters expressed
support and offered suggestions to
clarify or address specific types of
investors or scenarios. As described
below, in consideration of the
comments, one clarifying revision is
made in the final rule.
One commenter expressed strong
support for the definition in the interim
rules, noting that it provides clarity and
aligns with business realities. Another
commenter noted that paragraph (a) of
the definition was reasonable,
appropriate, and consistent with
CFIUS’s historic application of the term,
but suggested that the phrase ‘‘activities
and investments’’ with respect to
investment funds be clarified. In
response to this comment, the final rule
removes ‘‘and investments.’’ The
Treasury Department intends that, with
respect to investment funds, the word
‘‘activities’’ is inclusive of
‘‘investments;’’ thus, directing and
managing investments made by an
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Jkt 250001
investment fund would be captured by
the word ‘‘activities.’’
Commenters also made suggestions
with respect to paragraph (b) of the
definition, which addresses the
situation where an entity has made
representations to a government that
may be inconsistent with its assertion
for CFIUS purposes that its principal
place of business is in the United States
under the criteria set forth in paragraph
(a) of the definition. One commenter
suggested removing the phrase ‘‘or
equivalent.’’ Another commenter
suggested that the criteria in paragraph
(b) of the definition be narrowed to
more closely match the language in
paragraph (a).
No changes were made to paragraph
(b) in response to these comments.
Paragraph (b) includes a non-exhaustive
list of representations an entity might
make to a government, each of which
approximate the criteria set forth in
paragraph (a). One commenter suggested
that an entity maintaining an offshore
‘‘registered agent’’ or ‘‘place of
business’’ would preclude it from
having a principal place of business in
the United States under the definition.
The Treasury Department disagrees
because the focus of paragraph (b) is a
representation of an entity’s ‘‘principal’’
or ‘‘headquarters’’ location, or
equivalent terms that capture the same
concept. The Treasury Department also
disagrees with suggestions made by
commenters that additional examples of
the application of the definition to
specific scenarios—such as addressing
investment funds with more
particularity—would be beneficial,
because the particular facts and
circumstances would need to be
considered.
B. Filing Fees for Formal Written
Notices—Subpart K
Two responsive written submissions
were received on the interim rule
establishing filing fees. One commenter
broadly supported the interim rule and
the second commenter suggested
changes, which are discussed below.
Sections 800.1101 and 802.1101—
Amount of Fee
Consistent with the proposed rule and
the interim rule, §§ 800.1101 and
802.1101 set forth the fee amount based
on the value of the transaction.
One commenter proposed two
alternatives to §§ 800.1101 and
802.1101. One suggestion was that the
Treasury Department, during an initial
phase of filing fee implementation,
impose a flat $10,000 fee for all
transactions above a certain threshold.
The final rule does not make any change
PO 00000
Frm 00010
Fmt 4700
Sfmt 4700
in response to this comment. The
Foreign Investment Risk Review
Modernization Act of 2018 (FIRRMA)
directs that the fee shall be based on the
‘‘value of the transaction,’’ and the
approach in the final rule is consistent
with the statute. Additionally, FIRRMA
provides that the amount of the fee
should take into account the expenses of
the Committee associated with
conducting its activities. The personnel
and resource costs to the Committee of
reviewing a notice are not insignificant
and may often exceed the suggested flat
fee. Finally, the fee structure set forth in
the final rule provides for a low
proportional cost (equal to or less than
0.15% of the transaction value) for all
transactions.
The commenter also suggested, in the
alternative, that additional fee bands be
incorporated into the rule and the fee
amounts be lowered. The commenter
asserted that the fee structure in the
interim rule may provide a disincentive
to voluntary filings or encourage parties
to restructure transactions to minimize
fees. The final rule does not make any
changes in response to this comment. In
the event that a transaction is
restructured to be effectuated in
multiple phases, §§ 800.1103(e)(1) and
802.1103(h)(1) address calculation of a
fee in such a circumstance.
The Treasury Department considered
different approaches to the fee
structure—including additional
transaction value ranges and lower fee
amounts—and decided that the
structure in the final rule is the most
appropriate for reasons including
proportionality and administrability.
The commenter’s proposed fee structure
would have the effect of raising fees on
lower value transactions and reducing
fees on higher value transactions, as
compared to the fee schedule in the
interim rule. Additionally, in
considering the proposed fee structure,
the Treasury Department evaluated that
additional fee bands could increase
complexity for parties and the
Committee in terms of the analysis
required to determine which fee amount
is relevant to a particular transaction—
especially where the precise transaction
value may not be known at the time of
the filing. The filing fee structure in the
interim rule allows the Committee to
appropriately generate funding—
consistent with FIRRMA—in order to
support the work of the Committee, but
at the same time, keep the cost as a
proportion of transaction value low. In
terms of incentives to voluntarily file a
notice with CFIUS where a fee is
required, the Treasury Department notes
that the benefit of filing a notice and
paying the fee is the ‘‘safe harbor’’ that
E:\FR\FM\28JYR1.SGM
28JYR1
Federal Register / Vol. 85, No. 145 / Tuesday, July 28, 2020 / Rules and Regulations
may be obtained upon the conclusion of
CFIUS review where there are no
unresolved national security concerns.
This is of considerable value to
transaction parties, particularly those
who have determined that filing a notice
is appropriate given the circumstances
of the transaction and the potential
interest the Committee may have in the
transaction if not notified. Finally,
transaction parties can take advantage of
the declaration process, which does not
require a fee.
No additional comments were
received. Therefore, the final rule
adopts the interim rule as published.
III. Rulemaking Requirements
Executive Order 12866
This rule is not subject to the general
requirements of Executive Order 12866,
which covers review of regulations by
the Office of Information and Regulatory
Affairs (OIRA) in the Office of
Management and Budget (OMB),
because it relates to a foreign affairs
function of the United States, pursuant
to section 3(d)(2) of that order. In
addition, this rule is 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.
khammond on DSKJM1Z7X2PROD with RULES
Paperwork Reduction Act
The collection of information
contained in this rule was submitted to
OMB for review along with the
proposed rule, in accordance with the
Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)) under control number
1505–0121.
The notice requirements in 31 CFR
part 800 and 31 CFR part 802 were
approved under the Paperwork
Reduction Act with a per respondent
burden of 130 hours and 116 burden
hours, respectively. In the proposed rule
establishing filing fees, the Treasury
Department invited public comments
with respect to the amended reporting
requirements under
§§ 800.502(c)(1)(viii) and
802.502(b)(1)(ix). No comments were
received. 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 OMB control
number.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq., RFA) generally
requires an agency to prepare an initial
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regulatory flexibility analysis unless the
agency certifies that the rule will not,
once implemented, have a significant
economic impact on a substantial
number of small entities. The RFA
applies whenever an agency is required
to publish a general notice of proposed
rulemaking under section 553(b) of the
Administrative Procedures Act (APA),
or any other law. As set forth in the
preamble to the proposed rule
establishing filing fees at Section III,
because rules issued pursuant to the
Defense Production Act, such as this
rule, are not subject to the APA or
another law requiring the publication of
a general notice of proposed
rulemaking, the RFA does not apply.
Nevertheless, for the reasons detailed in
the RFA section of the proposed and
interim rules, the Secretary of the
Treasury certified that the rule, if
implemented, ‘‘will not have a
significant economic impact on a
substantial number of small entities,’’ 5
U.S.C. 605(b). This final rule makes
limited changes to interim rules already
in effect that will not have a significant
economic impact on a substantial
number of small entities. The Treasury
Department also invited public
comment on how the proposed rule
would affect small entities.
Congressional Review Act
This rule has been submitted to OIRA
which has determined that the rule is
not a ‘‘major’’ rule under the
Congressional Review Act.
45313
PART 800—REGULATIONS
PERTAINING TO CERTAIN
INVESTMENTS IN THE UNITED
STATES BY FOREIGN PERSONS
1. The authority citation for part 800
continues to read as follows:
■
Authority: 50 U.S.C. 4565; E.O. 11858, as
amended, 73 FR 4677.
Subpart B—Definitions
§ 800.239
[Amended]
2. Amend § 800.239 in paragraph (a)
by removing ‘‘and investments’’ after
‘‘where the fund’s activities’’.
■
PART 802—REGULATIONS
PERTAINING TO CERTAIN
TRANSACTIONS BY FOREIGN
PERSONS INVOLVING REAL ESTATE
IN THE UNITED STATES
3. The authority citation for part 802
continues to read as follows:
■
Authority: 50 U.S.C. 4565; E.O. 11858, as
amended, 73 FR 4677.
Subpart B—Definitions
§ 802.232
[Amended]
4. Amend § 802.232 in paragraph (a)
by removing ‘‘and investments’’ after
‘‘where the fund’s activities’’.
■
Dated: July 10, 2020.
Thomas Feddo,
Assistant Secretary for Investment Security.
[FR Doc. 2020–15336 Filed 7–27–20; 8:45 am]
BILLING CODE 4810–25–P
List of Subjects
31 CFR Part 800
LIBRARY OF CONGRESS
Fees, Foreign investments in the
United States, Investment companies,
Investments, National defense.
36 CFR Part 701
31 CFR Part 802
Amendments Regarding International
Service
Fees, Federal buildings and facilities,
Foreign investments in the United
States, Government property,
Investigations, Investment companies,
Investments, Land sales, National
defense, Public lands, Real property
acquisition, Reporting and
recordkeeping requirements.
Accordingly, the interim rule
amending 31 CFR parts 800 and 802
regarding the establishment of filing
fees, which was published in the
Federal Register at 85 FR 23736 on
April 29, 2020, is adopted as final
without change. The interim rules
amending 31 CFR parts 800 and 802 that
were published in the Federal Register
at 85 FR 3112 and 85 FR 3158 on
January 17, 2020 are adopted as final
with the following changes:
PO 00000
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Fmt 4700
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[Docket No. 2020–2]
Library of Congress.
Final rule.
AGENCY:
ACTION:
The Library of Congress is
adopting amendments to allow for
international service for loans of library
materials for blind and other print
disabled persons, as authorized by Title
XIV of the Library of Congress Technical
Corrections Act of 2019.
DATES: Effective July 28, 2020.
FOR FURTHER INFORMATION CONTACT:
Emily Vartanian, Senior Counsel,
Library of Congress Office of the General
Counsel, 202–707–7205, evar@loc.gov.
SUPPLEMENTARY INFORMATION: The
Librarian of Congress is authorized to
make regulations with respect to the
Library of Congress (2 U.S.C. 136). Since
SUMMARY:
E:\FR\FM\28JYR1.SGM
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]]>Agencies
[Federal Register Volume 85, Number 145 (Tuesday, July 28, 2020)]
[Rules and Regulations]
[Pages 45311-45313]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15336]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Office of Investment Security
31 CFR Parts 800 and 802
RIN 1505-AC63, 1505-AC64, 1505-AC65
Definition of ``Principal Place of Business''; Filing Fees for
Notices of Certain Investments in the United States by Foreign Persons
and Certain Transactions by Foreign Persons Involving Real Estate in
the United States
AGENCY: Office of Investment Security, Department of the Treasury.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The final rule makes a clarifying revision to the definition
of ``principal place of business'' and adopts the interim rule
establishing a fee for parties filing a formal written notice of a
transaction for review by the Committee on Foreign Investment in the
United States.
DATES: The final rule is effective on August 27, 2020.
FOR FURTHER INFORMATION CONTACT: For questions about this rule,
contact: Laura Black, Director of Investment Security Policy and
International Relations; Meena R. Sharma, Deputy Director of Investment
Security Policy and International Relations; David Shogren, Senior
Policy Advisor; 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. Definition of ``Principal Place of Business''
On January 17, 2020, the Department of the Treasury (Treasury
Department) published two interim rules, each effective February 13,
2020, that provided a definition for the term ``principal place of
business'' as applicable to transactions subject to review by the
Committee on Foreign Investment in the United States (CFIUS or the
Committee). 85 FR 3112 (January 17, 2020); 85 FR 3158 (January 17,
2020). The preambles to the interim rules provide background on this
definition. While the definition took effect on February 13, 2020, the
public was provided an opportunity to comment. The Treasury Department
received several comments, which are discussed further below.
B. Filing Fees for Formal Written Notices
On March 9, 2020, the Treasury Department published a notice of
proposed rulemaking amending 31 CFR part 800 and 31 CFR part 802 to
establish a fee for ``covered transactions'' and ``covered real estate
transactions,'' respectively, that are filed with CFIUS as formal
written notices. 85 FR 13586 (March 9, 2020). The public was provided
an opportunity to comment on the proposed rule and several comments
were received. Following consideration of the public comments, on April
29, 2020, the Treasury Department published an interim rule
establishing filing fees, effective May 1, 2020. 85 FR 23736 (April 29,
2020). As explained in the preamble to the interim rule, subpart K on
filing fees was added to the
[[Page 45312]]
regulations at 31 CFR part 800 and 31 CFR part 802, and a limited
number of revisions were made to other related sections of those
regulations. Additionally, the preamble to the interim rule included a
discussion of the public comments received on the proposed fee rule.
While the Treasury Department began collecting fees on May 1, 2020, it
determined that the public and the Committee would benefit from an
additional comment period, which ended on June 1, 2020. Comments
received during the additional comment period are discussed below.
The preambles to the proposed rule and the interim rule provide
additional information on the Committee's statutory authority and
requirements with respect to filing fees, and various factors that were
considered in establishing the filing fee regulations.
II. Summary of Comments and Change From the Interim Rules
During the public comment periods for each of the interim rules
discussed above, the Treasury Department received written submissions
reflecting a range of views. All comments received by the end of each
comment period are available on the public rulemaking dockets at
https://www.regulations.gov. The section-by-section analysis below
discusses the comments and describes a clarifying revision.
A. Definition of ``Principal Place of Business''--Sections 800.239 and
802.232
Several written submissions were received on the interim rules
defining the term ``principal place of business.'' In general,
commenters expressed support and offered suggestions to clarify or
address specific types of investors or scenarios. As described below,
in consideration of the comments, one clarifying revision is made in
the final rule.
One commenter expressed strong support for the definition in the
interim rules, noting that it provides clarity and aligns with business
realities. Another commenter noted that paragraph (a) of the definition
was reasonable, appropriate, and consistent with CFIUS's historic
application of the term, but suggested that the phrase ``activities and
investments'' with respect to investment funds be clarified. In
response to this comment, the final rule removes ``and investments.''
The Treasury Department intends that, with respect to investment funds,
the word ``activities'' is inclusive of ``investments;'' thus,
directing and managing investments made by an investment fund would be
captured by the word ``activities.''
Commenters also made suggestions with respect to paragraph (b) of
the definition, which addresses the situation where an entity has made
representations to a government that may be inconsistent with its
assertion for CFIUS purposes that its principal place of business is in
the United States under the criteria set forth in paragraph (a) of the
definition. One commenter suggested removing the phrase ``or
equivalent.'' Another commenter suggested that the criteria in
paragraph (b) of the definition be narrowed to more closely match the
language in paragraph (a).
No changes were made to paragraph (b) in response to these
comments. Paragraph (b) includes a non-exhaustive list of
representations an entity might make to a government, each of which
approximate the criteria set forth in paragraph (a). One commenter
suggested that an entity maintaining an offshore ``registered agent''
or ``place of business'' would preclude it from having a principal
place of business in the United States under the definition. The
Treasury Department disagrees because the focus of paragraph (b) is a
representation of an entity's ``principal'' or ``headquarters''
location, or equivalent terms that capture the same concept. The
Treasury Department also disagrees with suggestions made by commenters
that additional examples of the application of the definition to
specific scenarios--such as addressing investment funds with more
particularity--would be beneficial, because the particular facts and
circumstances would need to be considered.
B. Filing Fees for Formal Written Notices--Subpart K
Two responsive written submissions were received on the interim
rule establishing filing fees. One commenter broadly supported the
interim rule and the second commenter suggested changes, which are
discussed below.
Sections 800.1101 and 802.1101--Amount of Fee
Consistent with the proposed rule and the interim rule, Sec. Sec.
800.1101 and 802.1101 set forth the fee amount based on the value of
the transaction.
One commenter proposed two alternatives to Sec. Sec. 800.1101 and
802.1101. One suggestion was that the Treasury Department, during an
initial phase of filing fee implementation, impose a flat $10,000 fee
for all transactions above a certain threshold. The final rule does not
make any change in response to this comment. The Foreign Investment
Risk Review Modernization Act of 2018 (FIRRMA) directs that the fee
shall be based on the ``value of the transaction,'' and the approach in
the final rule is consistent with the statute. Additionally, FIRRMA
provides that the amount of the fee should take into account the
expenses of the Committee associated with conducting its activities.
The personnel and resource costs to the Committee of reviewing a notice
are not insignificant and may often exceed the suggested flat fee.
Finally, the fee structure set forth in the final rule provides for a
low proportional cost (equal to or less than 0.15% of the transaction
value) for all transactions.
The commenter also suggested, in the alternative, that additional
fee bands be incorporated into the rule and the fee amounts be lowered.
The commenter asserted that the fee structure in the interim rule may
provide a disincentive to voluntary filings or encourage parties to
restructure transactions to minimize fees. The final rule does not make
any changes in response to this comment. In the event that a
transaction is restructured to be effectuated in multiple phases,
Sec. Sec. 800.1103(e)(1) and 802.1103(h)(1) address calculation of a
fee in such a circumstance.
The Treasury Department considered different approaches to the fee
structure--including additional transaction value ranges and lower fee
amounts--and decided that the structure in the final rule is the most
appropriate for reasons including proportionality and administrability.
The commenter's proposed fee structure would have the effect of raising
fees on lower value transactions and reducing fees on higher value
transactions, as compared to the fee schedule in the interim rule.
Additionally, in considering the proposed fee structure, the Treasury
Department evaluated that additional fee bands could increase
complexity for parties and the Committee in terms of the analysis
required to determine which fee amount is relevant to a particular
transaction--especially where the precise transaction value may not be
known at the time of the filing. The filing fee structure in the
interim rule allows the Committee to appropriately generate funding--
consistent with FIRRMA--in order to support the work of the Committee,
but at the same time, keep the cost as a proportion of transaction
value low. In terms of incentives to voluntarily file a notice with
CFIUS where a fee is required, the Treasury Department notes that the
benefit of filing a notice and paying the fee is the ``safe harbor''
that
[[Page 45313]]
may be obtained upon the conclusion of CFIUS review where there are no
unresolved national security concerns. This is of considerable value to
transaction parties, particularly those who have determined that filing
a notice is appropriate given the circumstances of the transaction and
the potential interest the Committee may have in the transaction if not
notified. Finally, transaction parties can take advantage of the
declaration process, which does not require a fee.
No additional comments were received. Therefore, the final rule
adopts the interim rule as published.
III. Rulemaking Requirements
Executive Order 12866
This rule is not subject to the general requirements of Executive
Order 12866, which covers review of regulations by the Office of
Information and Regulatory Affairs (OIRA) in the Office of Management
and Budget (OMB), because it relates to a foreign affairs function of
the United States, pursuant to section 3(d)(2) of that order. In
addition, this rule is 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.
Paperwork Reduction Act
The collection of information contained in this rule was submitted
to OMB for review along with the proposed rule, in accordance with the
Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control
number 1505-0121.
The notice requirements in 31 CFR part 800 and 31 CFR part 802 were
approved under the Paperwork Reduction Act with a per respondent burden
of 130 hours and 116 burden hours, respectively. In the proposed rule
establishing filing fees, the Treasury Department invited public
comments with respect to the amended reporting requirements under
Sec. Sec. 800.502(c)(1)(viii) and 802.502(b)(1)(ix). No comments were
received. 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 OMB control number.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq., RFA)
generally requires an agency to prepare an initial regulatory
flexibility analysis unless the agency certifies that the rule will
not, once implemented, have a significant economic impact on a
substantial number of small entities. The RFA applies whenever an
agency is required to publish a general notice of proposed rulemaking
under section 553(b) of the Administrative Procedures Act (APA), or any
other law. As set forth in the preamble to the proposed rule
establishing filing fees at Section III, because rules issued pursuant
to the Defense Production Act, such as this rule, are not subject to
the APA or another law requiring the publication of a general notice of
proposed rulemaking, the RFA does not apply. Nevertheless, for the
reasons detailed in the RFA section of the proposed and interim rules,
the Secretary of the Treasury certified that the rule, if implemented,
``will not have a significant economic impact on a substantial number
of small entities,'' 5 U.S.C. 605(b). This final rule makes limited
changes to interim rules already in effect that will not have a
significant economic impact on a substantial number of small entities.
The Treasury Department also invited public comment on how the proposed
rule would affect small entities.
Congressional Review Act
This rule has been submitted to OIRA which has determined that the
rule is not a ``major'' rule under the Congressional Review Act.
List of Subjects
31 CFR Part 800
Fees, Foreign investments in the United States, Investment
companies, Investments, National defense.
31 CFR Part 802
Fees, Federal buildings and facilities, Foreign investments in the
United States, Government property, Investigations, Investment
companies, Investments, Land sales, National defense, Public lands,
Real property acquisition, Reporting and recordkeeping requirements.
Accordingly, the interim rule amending 31 CFR parts 800 and 802
regarding the establishment of filing fees, which was published in the
Federal Register at 85 FR 23736 on April 29, 2020, is adopted as final
without change. The interim rules amending 31 CFR parts 800 and 802
that were published in the Federal Register at 85 FR 3112 and 85 FR
3158 on January 17, 2020 are adopted as final with the following
changes:
PART 800--REGULATIONS PERTAINING TO CERTAIN INVESTMENTS IN THE
UNITED STATES BY FOREIGN PERSONS
0
1. The authority citation for part 800 continues to read as follows:
Authority: 50 U.S.C. 4565; E.O. 11858, as amended, 73 FR 4677.
Subpart B--Definitions
Sec. 800.239 [Amended]
0
2. Amend Sec. 800.239 in paragraph (a) by removing ``and investments''
after ``where the fund's activities''.
PART 802--REGULATIONS PERTAINING TO CERTAIN TRANSACTIONS BY FOREIGN
PERSONS INVOLVING REAL ESTATE IN THE UNITED STATES
0
3. The authority citation for part 802 continues to read as follows:
Authority: 50 U.S.C. 4565; E.O. 11858, as amended, 73 FR 4677.
Subpart B--Definitions
Sec. 802.232 [Amended]
0
4. Amend Sec. 802.232 in paragraph (a) by removing ``and investments''
after ``where the fund's activities''.
Dated: July 10, 2020.
Thomas Feddo,
Assistant Secretary for Investment Security.
[FR Doc. 2020-15336 Filed 7-27-20; 8:45 am]
BILLING CODE 4810-25-P
