US Treasury issues proposed regulations establishing filing fees for certain voluntary CFIUS notifications

On March 4, 2020, the US Department of Treasury issued proposed regulations that would, if adopted, establish, for the first time, filing fees for certain voluntary CFIUS notifications. The fees are being implemented as required under the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA).

Under the proposed regulations, which are scheduled to be formally published in the Federal Register on March 9, 2020, parties submitting full voluntary notifications for "covered transactions" under 31 CFR part 800 or "covered real estate transactions" under 31 CFR part 802 will be subject to filing fees ranging from zero to US$300,000, depending on the value of the transaction. The proposed fee schedule is as follows:

Valuation will generally be calculated based on the total value of all consideration that has been or will be paid in the context of the transaction by or on behalf of the foreign person who is a party to the transaction, including cash, assets, shares or other ownership interests, debt forgiveness, services, or other in-kind consideration. There is an exception, however, for covered transactions where the value of the transaction is equal to or greater than US$5 million, but the value of the interests or rights acquired in the US business is less than US$5 million. In such cases, the fee will be US$750.

The fees will not be applicable to short form declarations, mandatory notifications, or for any unilateral review initiated by CFIUS. The fees will apply, however, to transactions that are first submitted as a declaration but for which the Committee requests a full voluntary filing. The Committee will not formally accept a voluntary notification for review until the fee is paid (unless a rare waiver is obtained).

Interested parties may submit comments on the proposed rule beginning on March 9, 2020 through April 8, 2020. Comments can be submitted online at www.regulations.gov or by mail to US Department of the Treasury, Attention: Laura Black, Director of Investment Security Policy and International Relations, 1500 Pennsylvania Avenue NW, Washington, DC 20220.

We will continue to monitor these, and related, developments closely and publish additional updates, as appropriate.