FIRRMA, Foreign Investment Risk Review Modernization Act: Investing in the USA Will Become More Difficult in Key Sectors
FIRRMA, Foreign Investment Risk Review...

The National Defense Authorization Act, introduced for the 2019 fiscal year, has updated and broadened the powers of the Commission on Foreign Investments in the United States (CFIUS), in addition to having modified FIRRMA (Foreign Investment Risk Review Modernization Act).

Investments carried out in the USA on behalf on foreigners will be subject to stricter control procedures if they are seen as a risk to American national security. Such investments include all those regarding crucial infrastructure, fundamental technologies dealing with the sensitive personal information of American citizens, or concerning transactions in the real estate market. In short, the areas primarily involved will be: certain strategic real estate acquisitions, acquisitions made via PE in technological corporations and the transfer of technology abroad.

New mechanisms regarding import and re-export regimes have been introduced, requiring a more extensive identification and control of transactions.

Those involved should expect a longer timeframe for the presentation (and execution) of the supporting documentation required by CFIUS for the proposed transaction. The Commission may authorize the transaction, require more information, or begin a unilateral revision of the transaction, even after the closing.


Following the recommendation of CFIUS, the President of the United States has the power to suspend or prohibit investment operations in the United States of America in light of Section 721 of the Exon-Florio Act introduced in the Defense Production Act of 1950.

CFIUS, led by the Secretary of the Treasury, recommends investment operations to the President of the Republic, who, in turn, can either accept or decline.

In November of 2018, the first pilot program dealing with technology regarded as critical was launched. All foreign investments are subject to a mandatory filing under Section 31 CFR 801.401



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