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Rule

Office of International Investment; Regulations Pertaining to Mergers, Acquisitions, and Takeovers by Foreign Persons

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

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AGENCY:

Department of the Treasury.

ACTION:

Final rule.

SUMMARY:

This final rule amends regulations that implement section 721 of Title VII of the Defense Production Act of 1950 (the “DPA”), as added by section 5021 of the Omnibus Trade and Competitiveness Act of 1988. This rule amends only those provisions relating to the filing of voluntary notice with the Committee on Foreign Investment in the United States (CFIUS).

DATES:

This final rule is effective as of April 7, 2003.

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FOR FURTHER INFORMATION CONTACT:

Gay Sills, Director, Office of International Investment, Department of the Treasury, 15th Street and Pennsylvania Ave., NW., Washington, DC 20220, (202) 622-1860.

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SUPPLEMENTARY INFORMATION:

Section 136 of the Defense Production Act Amendments of 1992 (Pub. L. 102-558) amended section 709 of the DPA by requiring that any regulation issued under the DPA be published in the Federal Register and that opportunity for public comment be provided for not less than thirty days. Accordingly, this regulation was published in proposed form in the Federal Register on November 21, 2002. The Treasury Department received no comments. The regulations are therefore now being published in final form, exactly as proposed.

This final regulation provides parties that file a notice with CFIUS under section 721 with the option of filing electronically, providing just a single paper copy to CFIUS, or the option of continuing the current practice of providing CFIUS 13 paper copies. By filing electronically, companies could substantially decrease the paperwork burden of providing CFIUS notice under section 721.

Executive Order 12866

These regulations are not subject to the requirements of Executive Order 12866 because they relate to foreign and military affairs functions of the United States.

Paperwork Reduction Act

The collections of information provided for in this rule have been previously reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.) under OMB control number 1505-0121. The proposed rule does not change the information collection other than to permit an alternative means of submitting notice to the Committee on Foreign Investment in the United States.

Administrative Procedure Act

Because this final rule relates to foreign and military affairs functions of the United States, it is not subject to a delayed effective date pursuant to 5 U.S.C. 553(a)(1).

Regulatory Flexibility Act

This regulation implements Section 721 of the Defense Production Act of 1950 (“Section 721”) (50 U.S.C. App. 2170)(”DPA”). Section 709 of the DPA (50 U.S.C. App. 2159) provides that the regulations issued under it are not subject to the rulemaking requirements of the Administrative Procedure Act (5 U.S.C. 553). Notwithstanding this exemption, section 709 of the DPA was amended by section 136 of the Defense Production Act Amendments of 1992 (Pub. L. 102-558) to require any regulation issued under the DPA to be published in the Federal Register for at least thirty days to provide for public comment. This requirement subjected the proposed regulation to the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). It is hereby certified that this final rule will not have a significant economic impact on a substantial number of small entities. When the proposed rule was published, the Treasury Department estimated that an average filing requires about 60 hours of preparation time. This final rule will permit parties to file notifications electronically, which is expected to reduce the preparation time somewhat because it will no longer be necessary to provide 13 paper copies of a filing. Instead, a filer can provide a single paper copy to the Treasury Department along with the electronic filing. Therefore, the impact of the final rule on small companies that file notifications with CFIUS is expected to be marginally beneficial.

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List of Subjects in 31 CFR Part 800

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Authority and Issuance

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For the reasons set out in the preamble,

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PART 800—REGULATIONS PERTAINING TO MERGERS, ACQUISITIONS, AND TAKEOVERS BY FOREIGN PERSONS

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1. The authority citation for part 800 continues to read as follows:

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Authority: Section 721 of Pub. L. 100-418, 102 Stat. 1107, made permanent law by section 8 of Pub. L. 102-99, 105 Stat. 487 (50 U.S.C. App. 2170) and amended by section 837 of the National Defense Authorization Act for Fiscal Year 1993, Pub. L. 102-484, 106 Stat. 2315, 2463; E.O. 12661, 54 FR 779, 3 CFR, 1988 Comp., p. 618.

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2. Section 800.401 is revised to read as follows:

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Procedures for notice.

(a) A party or parties to an acquisition subject to section 721 may submit a voluntary notice to the Committee of the proposed or completed acquisition by:

(1) Sending thirteen copies of the information set out in § 800.402 to the Staff Chairman of the Committee on Foreign Investment in the United States (“Staff Chairman”), Office of International Investment, Department of the Treasury, 15th Street and Pennsylvania Avenue, NW., Washington, DC 20220; or

(2) Sending:

(i) One signed paper copy of the information set out in § 800.402 to the Staff Chairman of the Committee on Foreign Investment in the United States (“Staff Chairman”), Office of International Investment, Department of the Treasury, 15th Street and Pennsylvania Avenue, NW., Washington, DC 20220; and

(ii) One electronic copy of this same information in Adobe Acrobat (PDF) or Microsoft Word format to the following e-mail address: CFIUS@do.treas.gov. Electronic filings that exceed 5 Megabytes (MB) will need to be divided into smaller transmissions of no more than 5 MB each, which should be sent individually as attachments to separate e-mails.

(b) Any member of the Committee may submit an agency notice of a proposed or completed acquisition to the Committee through its Staff Chairman if that member has reason to believe, based on facts then available, that the acquisition is subject to section 721 and may have adverse impacts on the national security. In the event of agency notice, the Committee will promptly furnish the parties to the acquisition with written advice of such notice.

(c) No agency notice, or review or investigation by the Committee, shall be made with respect to a transaction more than three years after the date of conclusion of the transaction, unless the Chairman of the Committee, in consultation with other members of the Committee, requests an investigation.

(d) No communications other than those described in paragraphs (a), (b) and (c) of this section shall constitute notice for purposes of section 721. In any case where a party or parties file(s) electronically under paragraph (a) of this section, the signed paper copy shall constitute the original copy, and CFIUS will not notify the parties of its acceptance of a filing until the original copy has been received by the Office of International Investment.

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John B. Taylor,

Under Secretary of the Treasury.

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[FR Doc. 03-8302 Filed 4-4-03; 8:45 am]

BILLING CODE 4810-25-P