On October 10, 2018, the US Department of the Treasury launched a significant pilot program to implement part of the Foreign Investment Risk Review Modernization Act (FIRRMA) while final rules are being crafted. The pilot goes into effect on November 10, 2018, and makes two important changes to the Committee on Foreign Investment in the United States (CFIUS):

First, with some exceptions for investment funds, the pilot program expands the jurisdiction of CFIUS to capture any foreign investment (direct or indirect) in a specially defined category of US companies called a “pilot program U.S. business” where a foreign investor obtains any material nonpublic technical information, access to the board of the business, or the ability to influence the production or development of critical technologies.

Second, the pilot program mandates notification to CFIUS of any investment in a pilot program US business. CFIUS will have 30 days to respond to such notifications, potentially requiring a full CFIUS filing. CFIUS will also have the power to impose civil penalties for noncompliance.