Treasury Issues Final Rule Expanding CFIUS Coverage of Real Estate Transactions Around More Than 60 Military Installations

WASHINGTON – Today, the U.S. Department of the Treasury (Treasury), as Chair of the Committee on Foreign Investment in the United States (CFIUS), in close coordination and cooperation with the U.S. Department of Defense (Department of Defense), issued a final rule that significantly expands its ability to review certain real estate transactions by foreign persons near more than 60 military bases and installations across 30 states. Pursuant to legislation that Congress passed in 2018, CFIUS has the authority to review certain real estate transactions near specified military installations and to take action in appropriate circumstances. Nearly 60 military installations will be added to an existing list of military installations around which CFIUS has jurisdiction over real estate transactions and CFIUS jurisdiction around nearly 10 existing installations will be extended. This latest update expands the reach of CFIUS’s real estate jurisdiction while maintaining its sharp focus on national security.

“The Biden-Harris Administration will continue to use our strong investment screening tools to advance America’s national security and protect our military installations from external threats,” said Secretary of the Treasury Janet L. Yellen. “This final rule will significantly increase the ability of CFIUS to thoroughly review real estate transactions near bases and will allow us to deter and stop foreign adversaries from threatening our Armed Forces, including through intelligence gathering.”

“Today’s final rule is a significant milestone in safeguarding critical U.S. military and defense installations,” said Assistant Secretary for Investment Security Paul Rosen. “The expansion of CFIUS jurisdiction around more than 60 military installations across 30 states highlights the work of CFIUS to be nimble and responsive to the evolving nature of the threats we face in the context of foreign investment that raises national security concerns.”

CFIUS jurisdiction over real estate transactions, provided by Congress in the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), allows CFIUS to review the purchase or lease by, or concession to, a foreign person of real estate in the United States that is in close proximity to a military installation or another facility or property of the United States Government that is sensitive for reasons relating to national security; could reasonably provide the foreign person the ability to collect intelligence on activities being conducted at such an installation, facility, or property; or could otherwise expose national security activities at such an installation, facility, or property to the risk of foreign surveillance. The CFIUS regulations governing real estate transactions identify a subset of military installations around which certain real estate transactions are covered under CFIUS’s jurisdiction.

The Department of Defense, a member of CFIUS, regularly assesses its military installations and the geographic scope established under the CFIUS regulations to ensure appropriate application in light of evolving national security considerations. This final rule is the result of a recent comprehensive assessment conducted by the Department of Defense regarding its military installations. The final rule enhances CFIUS’s authorities through the following key changes:

• Expands CFIUS’s jurisdiction over certain real estate transactions to include those within a one-mile radius around 40 additional military installations;

• Expands CFIUS’s jurisdiction over certain real estate transactions to include those within a 100-mile radius around 19 additional military installations;

• Expands CFIUS’s jurisdiction over certain real estate transactions between 1 mile and 100 miles around eight military installations already listed in the regulations;

• Updates the names of 14 military installations already listed in the regulations to better assist the public in identifying the relevant sites; and

• Updates the locations of seven military installations already listed in the current regulations to better assist the public in identifying the relevant sites.

The final rule will become effective 30 days after publication in the Federal Register and is available at https://www.cfius.gov/.

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