On August 13, President Trump signed into law the Foreign Investment Risk Review Modernization Act (FIRRMA), which expands the role of the Committee on Foreign Investment in the United States (CFIUS) in reviewing national security concerns arising from transactions in which foreign individuals or entities invest in or acquire U.S. businesses. Under both the prior law and the current law, CFIUS reviews certain transactions that may endanger national security (covered transactions) and refers a subset of covered transactions to the president for potential suspension, prohibition or unwinding.

FIRRMA expands the scope of CFIUS review in several ways. It extends the CFIUS review period an additional 30 days to a maximum of 135 days, makes filing mandatory in certain instances and adds a filing fee of up to 1 percent of transaction value or $300,000. It also brings into CFIUS purview sales and leases of real estate (outside of the sale of a business) located near sensitive government facilities. It further covers investments in U.S. companies that give a foreign investor a more than passive interest in “critical technology” and “critical infrastructure” firms, including firms that maintain personal data that may be exploited in a manner that threatens national security.

Much of the substance of FIRRMA remains to be implemented through rulemaking. U.S. companies in a number of industries not traditionally considered to be defense or security-related will need to consider these rules when taking investments from foreign investors or when selling or spinning off businesses to foreign or foreign-controlled buyers.