Effective November 10, 2018, the U.S. Treasury Department implemented an interim regulation termed “determination and temporary provisions pertaining to a pilot program to review certain transactions involving foreign persons and critical technology.” (Hereinafter “Regulation”.)  

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Pursuant to this Regulation, parties are required to notify the Committee on Foreign Investment in the United States (hereinafter “CFIUS”), prior to closing, of certain transactions involving “critical technologies.”  Parties must file the appropriate notice with the CFIUS at least 45 days prior to closing of transaction.  From there, the CFIUS will review the proposed transaction and issue further directives.  Failure to do so can lead to drastic penalties: including a civil penalty up to the value of the transaction.

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The term “critical technologies” is further defined in 27 specific industries.  The following are some industries of potential interest:

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 Aircraft manufacturing

 Aircraft engine and engine parts manufacturing

 Alumina refining and primary aluminum production

 Computer storage device manufacturing

 Electronic computer manufacturing

 Optical instrument and lens manufacturing

 Basic inorganic chemical manufacturing

 Radio and television broadcasting and wireless communications equipment manufacturing

 Research and development in nanotechnology

 Research and development in biotechnology

 Secondary smelting and alloying of aluminum

 Semiconductor and related device manufacturing

 Semiconductor machinery manufacturing

 Telephone apparatus manufacturing

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If you recently completed any investment transactions in these industries, or plan to do so in the future, please contact Formosan Brothers attorneys-at-law.  We will be happy to help you through the mandatory reporting process.

Best regards,

Formosan Brothers, Attorneys-at-Law.

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[Contact Information]

LiPu Lee

E: lipolee@mail.fblaw.com.tw

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