September 29, 2020

Volume X, Number 273

September 28, 2020

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CFIUS Regulations and FIRRMA Updates: Proposed CFIUS Filing Fees Announced

The U.S. Department of Treasury has issued proposed regulations that would impose a filing fee on certain voluntary notices filed with the Committee on Foreign Investment in the United States (CFIUS). As discussed in our Feb. 11, 2020, GT Alert, CFIUS is to implement a filing fee pursuant to the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA). The proposed regulations were published in the Federal Register March 9, 2020.

The proposed regulations would introduce a filing fee for parties submitting full voluntary notifications for “covered transactions” as well as “covered real estate transactions.” Importantly, the proposed regulations would not require a filing fee for any short form declaration, mandatory notifications, and reviews unilaterally initiated by CFIUS, with the exception that filing fees are to be applied if a full voluntary notice is required after a short form declaration has been filed.

Proposed Filing Fee Schedule Based on Transaction Value

The proposed regulations adopt a tiered filing fee approach, with fees based on the value of the transaction. The proposed method of calculating transaction value, for purposes of determining the filing fee, will generally be the total value of all consideration paid in the context of the transaction, with certain exceptions. For consideration that fluctuates in value, such as securities or other non-cash assets, the proposed rule calculates value based on the closing price for the security on the previous trading day before the voluntary notice was filed with CFIUS, subject to certain exceptions. For transactions where consideration has not yet been determined, the parties are instructed to calculate value based on a good-faith approximation of the fair market value of the duties or assets subject of the transaction on the date the parties file the notice.

Proposed Tiered Filing Fee Structure 

Value of Transaction
 
Proposed Filing Fee
 
Up to $499,999.99
 
No fee assessed
 
$500,000 to $4,999,999.99
 
$750
 
$5,000,000 to $49,99,999.99
 
$7,500
 
$50,000,000 to $249,999,999
 
$75,000
 
$250,000,000 to $749,999,999.99
 
$150,000
 
$750,000,000 or more
 
$300,000
 

 Timing and Budgeting Considerations

The following factors included in the proposed rule will affect timing and budgeting considerations when preparing to file a voluntary notice:

  • The filing fee is due at time of filing, and CFIUS will not “start the clock,” by initiating the 45-day review period, until the fee is received.
     
  • Filing fees are to be paid to the Treasury Department via electronic payment in U.S. dollars.
     
  • Refunds will generally not be available unless it is later determined a party has overpaid or the transaction is not a covered transaction.
     
  • Resubmissions, where CFIUS has allowed the parties to withdraw and resubmit to include omitted or new information, will not require an additional filing fee.
     
  • Insufficiency of payment could lead to rejection of the voluntary notice later in the process.

Parties may submit comments on the proposed rule to the Treasury Department between March 9, 2020, and April 8, 2020. 

©2020 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume X, Number 69

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About this Author

Kara Bombach, Greenberg Traurig, Washington DC, International Trade and White Collar Defense Attorney
Shareholder

Kara Bombach assists companies to lawfully export goods, technology and services around the globe. She places significant emphasis on helping clients achieve practical, workable solutions to complex regulatory situations arising under anti-corruption and anti-bribery measures (U.S. Foreign Corrupt Practices Act (FCPA) and OECD Convention), export control laws (EAR and ITAR), anti-boycott laws, and special sanctions (embargoes) maintained by the U.S. government (OFAC and other agencies) against various countries (including Iran, Cuba and Sudan), entities and individuals....

202-533-2334
Cyril Brennan, Greenberg Traurig Law Firm, Washington DC, International Trade Law Attorney
Shareholder

Cyril (Cy) Brennan focuses his practice on international trade regulation and compliance, with an emphasis on U.S. export controls and economic sanctions. Cy handles matters regarding the International Traffic in Arms Regulations (ITAR), the Export Administration Regulations (EAR), U.S. sanctions programs administered by the Treasury Department’s Office of Foreign Assets Control (OFAC) and the Department of Commerce’s anti-boycott regulations. In addition, he represents clients before the Committee on Foreign Investment in the United States (CFIUS), and advises clients on the Foreign Corrupt Practices Act (FCPA), the foreign direct investment reporting requirements of the Bureau of Economic Analysis (BEA), and other trade and investment-related regulations in the context of mergers and acquisitions.

Concentrations

  • Export controls and economic sanctions

  • Committee on Foreign Investment in the United States (CFIUS)

  • Anticorruption compliance

  • Foreign direct investment reporting

  • Regulatory due diligence

  • Foreign ownership, control or influence (FOCI)

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Renee Latour, Greenberg Traurig Law Firm, Washington DC, Corporate Law Attorney
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Renee A. Latour focuses her practice on international trade regulation with an emphasis on compliance with U.S. export controls and economic sanctions. Renee assists clients on matters related to international trade that arise under the jurisdiction of various U.S. governmental agencies, including the Departments of Commerce, State, Treasury, and Defense. She advises on U.S. export control laws, anti-boycott laws and special sanctions maintained by the U.S. Government against various countries including Iran, Cuba and Sudan.

Renee also assists...

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Sonali Dohale, Greenberg Traurig Law Firm, Washington DC, Environmental and International Trade Law Attorney
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Sonali Dohale focuses her practice on compliance counseling, environmental due diligence and environmental litigation under state and federal statutes. Sonali’s experience at government regulatory agencies and her background in civil and environmental engineering help give her insight into both the legal and technical challenges faced by her clients.

In addition, Sonali assists clients engaged in international trade with a variety of federal regulatory issues, including matters related to the International Traffic in Arms Regulations (ITAR), the...

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Axel Urie international Trade and Customs Attorney Greenberg Traurig Law Firm
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Axel Urie is a member of the International Trade and Customs Practice in Greenberg Traurig's Washington, D.C. office. He is experienced in trade remedy and customs matters, including litigation for domestic importers, producers, and foreign exporters.

202-530-8539