CFIUS Update V
Critical Technology under FIRRMA
February 25, 2020
As previously discussed, the US Department of Treasury issued two sets of final rules (the “Final Rules”) on January 13, 2020 implementing the Foreign Investment Risk Review Modernization Act, effective February 13, 2020. The Final Rules expanded the jurisdiction of the Committee on Foreign Investment in the United States to review certain non-controlling foreign investments in a US business which, among other things, “produces, designs, tests, manufactures, fabricates, or develops one or more critical technologies” involving certain specifically enumerated industries based on North American Industry Classification System (NAICS) codes.
The Final Rules defines “critical technology” to include (i) items on the United States Munitions List set forth in the International Traffic in Arms Regulations, (ii) items on the Commerce Control List set forth in the Export Administration Regulations (see here), (iii) select nuclear equipment, materials, software, and technology; (iv) select agents and toxins; or (v) "emerging and foundational technologies" controlled under Section 1758 of the Export Control Reform Act of 2018 (the “ECRA”) (50 U.S.C 4817; see here).
Notably, the Final Rules have not independently defined the scope of “emerging and foundational technologies”, but instead incorporated by reference the emerging and foundational technologies to be identified under Section 1758 of the ECRA, thus the ultimate scope of “critical technologies” still remains subject to the regulatory development as required by the ECRA .
The Final Rules defines “critical technology” to include (i) items on the United States Munitions List set forth in the International Traffic in Arms Regulations, (ii) items on the Commerce Control List set forth in the Export Administration Regulations (see here), (iii) select nuclear equipment, materials, software, and technology; (iv) select agents and toxins; or (v) "emerging and foundational technologies" controlled under Section 1758 of the Export Control Reform Act of 2018 (the “ECRA”) (50 U.S.C 4817; see here).
Notably, the Final Rules have not independently defined the scope of “emerging and foundational technologies”, but instead incorporated by reference the emerging and foundational technologies to be identified under Section 1758 of the ECRA, thus the ultimate scope of “critical technologies” still remains subject to the regulatory development as required by the ECRA .