On June 25, 2026, the U.S. Department of Agriculture (USDA) published a proposed rule (the Proposed Rule) that would significantly expand the scope and enforcement of the Agricultural Foreign Investment Disclosure Act of 1978 (AFIDA), which requires foreign persons who acquire, transfer, or hold interests in U.S. agricultural land to report those transactions and holdings to USDA. The Proposed Rule would broaden what qualifies as “agricultural land,” lower the ownership thresholds that trigger reporting, impose a new tiered penalty structure with heightened consequences for foreign adversaries, and transfer oversight of the program to USDA’s Office of Homeland Security (OHS), reflecting a broader shift in the U.S. government’s treatment of AFIDA as a national security tool rather than a purely agricultural data-collection exercise. The Proposed Rule follows a December 2025 Advanced Notice of Proposed Rulemaking and is informed by recommendations from a 2024 Government Accountability Office review, congressional directives in recent appropriations legislation, including a requirement that USDA share AFIDA data with the Committee on Foreign Investment in the United States (CFIUS) to support reviews of transactions that may raise national security concerns, and principles articulated in USDA’s 2025 National Farm Security Action Plan.

Comments on the Proposed Rule are due by August 10, 2026.

Background

AFIDA was enacted in 1978 to require foreign persons, including individuals, corporations, and governments, to disclose their interests in U.S. agricultural land to USDA. For most of its history, AFIDA has functioned primarily as a data-collection tool, administered by USDA’s Farm Service Agency (FSA) through a paper-based filing process. More recently, Congress and the executive branch have increasingly linked AFIDA to broader national security objectives, including the work of CFIUS. This shift accelerated with the 2025 National Farm Security Action Plan, which called on USDA to “fully integrate agriculture into the broader national security enterprise,” and with the transfer of AFIDA’s administration from FSA to OHS, the USDA office responsible for coordinating departmental action on national security issues, including USDA’s role in CFIUS. The Proposed Rule would codify this transfer and implement the associated reforms.

Overview of Proposed Changes

The Proposed Rule would make changes across four main areas: (1) expanding the definitions that determine who must report and what land is covered; (2) increasing the information required in AFIDA filings, which would need to be submitted through an electronic portal; (3) establishing a new tiered penalty structure with heightened penalties for foreign adversaries; and (4) narrowing the appeals process for penalty assessments.

Definitional Changes and Expanded Scope

The Proposed Rule expands the scope of persons and land subject to AFIDA reporting through changes and additions to defined terms in the regulation:

  • Agricultural Land. The Proposed Rule would expand the definition of “Agricultural Land” significantly to include a number of new categories, including: solar electric power generation, wind electric power generation, and pipeline transportation; support activities for agriculture and forestry; entities in the animal and agricultural supply chain (including slaughtering, processing, and warehousing); agricultural production “under cover” (such as greenhouses and nurseries); land used for research in agriculture, biotechnology, biology, fisheries, forests, and veterinary science; and conservation land that could be used for farming, ranching, forestry, or timber production. The Proposed Rule also would remove the current exemption for surface and subsurface easements and rights of way used for non-agricultural purposes, requiring reporting for all such interests. In addition, the Proposed Rule would eliminate the existing de minimis exemption for agricultural land tracts not exceeding 10 acres with annual gross receipts of less than $1,000.
  • Foreign Adversary and Foreign Adversary Controlled Entity. The Proposed Rule introduces two new defined terms, “foreign adversary” and “foreign adversary controlled entity,” that would subject certain foreign persons to increased scrutiny and heightened penalties. A “foreign adversary” is defined as any foreign government or foreign non-government person from, a citizen of, or a controlled entity headquartered in a “foreign country of concern” as defined by the CHIPS and Science Act of 2022. That statute identifies the People’s Republic of China, the Democratic People’s Republic of Korea, the Russian Federation, the Islamic Republic of Iran, and “any other country determined to be a country of concern by the Secretary of State.” Separately, a “foreign adversary controlled entity” is defined as any entity, including any corporation, partnership, trust, or association, that is owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary. As discussed below, these classifications affect both reporting obligations and penalties.

Key Changes to Disclosure and Reporting Requirements

  • Filing Method. The Proposed Rule would replace the current paper filing system for AFIDA disclosures with an electronic submission portal.
  • Enhanced Disclosure Content. The Proposed Rule would expand the information required in AFIDA disclosures. Among the most significant additions, filers would need to provide the type of interest held (including percentage ownership or leasehold interest), current acreage at the time of transfer, and a geospatial map delineating property boundaries and subdivided by land use type (crop, pasture, forest, other agriculture, and non-agricultural). Reports would also need to include information about preexisting relationships between the new owner and previous management of the land, including involvement in day-to-day operations, as well as new personal identifiers such as foreign passport numbers. For corporate and other non-individual, non-governmental entities, the Proposed Rule would codify requirements to report the identities and percentage interests of all persons holding significant interest or substantial control (as defined below), aggregate interests by country, and an ownership diagram depicting relationships among interest holders. If the actual use of the land changes from the reported intended use, the foreign person would need to file a change report, and failure to do so would constitute a violation of AFIDA.
  • Reduction of Leasehold Exemption. Under current rules, leases of less than 10 years are exempt from reporting requirements. The Proposed Rule would narrow this exemption to cover only leases of less than one year, measured as a single period of time or as the aggregate of multiple leases over a continuous or discontinuous period. The Proposed Rule would eliminate this exemption entirely for lessees that are foreign adversaries or foreign adversary controlled entities (as defined above). USDA is seeking public comment on whether to eliminate the exemption entirely for all foreign persons.
  • Lowering of Aggregate Ownership Reporting Threshold. Current regulations impose a 10% individual interest threshold and a 50% aggregate interest threshold, but the Proposed Rule would reduce the aggregate threshold to 10%, meaning aggregate foreign interest of 10% or greater would trigger AFIDA reporting obligations. Any interest held by a foreign adversary or foreign adversary controlled entity would trigger reporting obligations regardless of the amount of interest held. Any “beneficial owner,” defined as any foreign person who exercises decision-making authority over the agricultural land or the entity holding it, including through intermediary tiers of ownership, would also trigger reporting obligations regardless of ownership percentage. USDA has also requested comment on whether the aggregate threshold should be further reduced to 5%.
  • Newly Reportable Holdings. Foreign persons who were not previously required to file under AFIDA but are required to file under the revised regulations would be required to file a report within 90 days of the effective date of any final rule.

Key Changes to Penalties and Enforcement

  • Tiered Penalty Structure. The Proposed Rule would substantially overhaul AFIDA’s current penalty regime, which imposes a recurring penalty of one-tenth of one percent of fair market value per week for late filings. In its place, the Proposed Rule would establish a new structure with significantly higher penalty rates that vary based on the type of violation and whether the violator is classified as a foreign adversary or foreign adversary controlled entity. Under the Proposed Rule, penalties for late filings would begin on the 91st day after the date on which a report was required, with an initial civil penalty of $250. Penalties would accrue at a rate of 2.5% of the fair market value of the holder’s interest every seven days for foreign adversaries and foreign adversary controlled entities, and 1.5% for all other foreign persons, up to an aggregate cap of 25% of fair market value per violation. Penalties would be assessed separately for each violation. The Proposed Rule would also remove all currently available downward adjustments to penalties, including adjustments for extenuating circumstances, and would establish separate penalty schedules for late-filed transfer and inheritance reports, newly reportable holdings, and incomplete or false filings. The penalty for incomplete, misleading, or false reports, or failure to maintain a report with accurate information, would not exceed 25% of fair market value.
  • Narrowed Appeals Window. The Proposed Rule would also halve the time allowed for an appeal from 60 days to 30 days and replace the current appeals options, which include a written statement or a hearing, with a single paper-based review process. Under the proposed process, the appellant would submit all relevant facts, reasons, and pertinent documents to the OHS Director, whose determination would be administratively final.

Implications

The Proposed Rule represents a significant expansion of AFIDA’s reach and enforcement. Foreign persons holding interests in U.S. agricultural land, or considering transactions that might involve U.S. real estate, even real estate that might not appear to be agricultural in nature, should consider how the proposed changes could affect their reporting obligations. In particular, the Proposed Rule would broaden the types of land and interests that trigger reporting, lower the ownership thresholds at which reporting is required, require substantially more information in filings, and impose a significantly more aggressive penalty structure for non-compliance. Information disclosed through AFIDA filings would be shared with CFIUS and made available to the public.

***

Cleary Gottlieb’s foreign investment and national security team is monitoring the rulemaking and is available to assist clients in understanding the potential impact of the Proposed Rule on their operations and investments, preparing for the proposed requirements, and submitting comments during the comment period.

For more insights and analysis from Cleary lawyers on policy and regulatory developments from a legal perspective, visit What to Expect From a Second Trump Administration.

On June 8, 2026, the U.S. Department of Defense (DOD) published an updated list of “Chinese military companies” operating in the United States as required by Section 1260H of the National Defense Authorization Act (NDAA) for Fiscal Year 2021 (the 1260H List), which was last published on January 7, 2025.[1] The updated list adds dozens of entities, including some of the largest publicly traded companies in China, spanning the automotive and electric vehicle, e-commerce, artificial intelligence, robotics, semiconductors, solar technology, and biotechnology sectors. These additions continue the trend of a steady expansion of the 1260H List from traditional defense and state-owned enterprises.[2] The updated 1260H List now identifies nearly 200 entities, including a number of subsidiaries listed alongside their parent companies. Notable new additions include BYD, NIO, Alibaba, Baidu, Unitree, TP-Link, and WuXi AppTec.[3] The update also removed 10 entities from the prior list.

Continue Reading Department of Defense Adds Major Technology, Automotive, and Biotechnology Firms to 1260H Chinese Military Companies List

Over the past few weeks, the Trump administration marked the latest phase in its escalation of sanctions against Cuba, the subject of the longest running U.S. sanctions program. On May 1, 2026, President Trump issued Executive Order (E.O.) 14404, establishing a new secondary sanctions regime that authorizes the imposition of sanctions on companies, individuals, and financial institutions operating in certain sectors of the Cuban economy, as well as Cuban government entities and affiliates.  Although U.S. sanctions against Cuba already broadly prohibit U.S. parties and their non-U.S. subsidiaries from dealings or transactions with Cuba, the E.O. represents a broader Trump administration policy of increasing economic pressure on the Cuban government by leveraging the threat of secondary sanctions to limit Cuba’s economic engagement with other countries.

Continue Reading Trump Administration Begins to Implement New Cuba Secondary Sanctions Regime Targeting Business With Cuba

On May 7, 2026, the U.S. Department of Defense (DoD) published a proposed rule (the Proposed Rule) that would, for the first time, require companies performing unclassified work for DoD to disclose whether they are subject to foreign ownership, control, or influence (FOCI), a screening process that historically has been required primarily for contractors with access to classified information.[1] DoD estimates that the Proposed Rule would affect an estimated 37,740 contractors and subcontractors. The Proposed Rule would implement statutory mandates under the National Defense Authorization Acts (NDAAs) for Fiscal Years 2020 and 2021, as well as elements of a 2024 DoD policy instruction on FOCI risk mitigation.[2] Comments on the Proposed Rule are due on July 6, 2026.

Continue Reading DoD Proposes Expanding Foreign Ownership Screening Beyond Classified Contracts

On April 14, 2026, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) issued two new General Licenses (GL), GLs 56 and 57, authorizing commercial negotiations with the Government of Venezuela (GoV) and the provision of a broad range of ordinary-course financial services involving the Venezuelan central bank and three state-controlled banks or GoV individual employees and affiliates.

Continue Reading OFAC Authorizes Commercial Negotiations With the Government of Venezuela and Certain Financial Services

The Cleary Gottlieb CFIUS team submitted a comment on March 18, 2026 in response to the Request for Information (RFI) issued by the U.S. Department of the Treasury (Treasury), as chair of the Committee on Foreign Investment in the United States (CFIUS), regarding a new Known Investor Program and ways to make CFIUS’s foreign investment review process more efficient. The comment is available here. Drawing on our experience advising foreign investors and U.S. businesses across a wide range of investor profiles, transaction structures, and industry sectors, we offer practical, experience-based observations aimed at assisting CFIUS in developing the Known Investor Program into a workable, broadly available program that fosters foreign direct investment into the United States while protecting national security. Our comments are offered in the spirit of the RFI’s stated goals of increasing efficiencies in the CFIUS process to facilitate investment from allies and partners while preserving the rigor of the national security review.[1]

Continue Reading Cleary Gottlieb Comments on CFIUS Known Investor Program and Process Streamlining

On March 26, 2026, the U.S. Department of the Treasury (Treasury), Office of Foreign Assets Control (OFAC) rescinded Directive 1 under Executive Order (E.O.) 14038, which had prohibited transactions in Belarusian sovereign debt with maturity of longer than 90 days issued since December 2, 2021. In parallel with the rescission of Directive 1, OFAC issued General License (GL) 14, authorizing transactions involving the Belarussian Bank of Development and Reconstruction Belinvestbank Joint Stock Company (Belinvestbank), among other entities. OFAC also removed several significant Belarusian potash sector entities from the Specially Designated Nationals and Blocked Persons List (SDN List).

Continue Reading OFAC Lifts Belarus Sovereign Debt Ban, Eases Sanctions on Belarusian Potash Sector

On March 27, 2026, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) amended an existing General License (GL) and issued two new GLs authorizing new activity in Venezuela’s mining and minerals sectors. Since January 2026, the U.S. government has issued a series of general licenses authorizing sector- or activity-specific dealings relating to Venezuela under specified conditions. GLs 51A, 54, and 55 extend this framework — previously primarily focused on the oil and gas sector — to Venezuela’s minerals sector, including gold.

Continue Reading OFAC Expands Authorized Activities in Venezuelan Mining Sector

On March 30, 2026, the Department of Justice’s National Security Division (NSD) issued a press release reinforcing that companies seeking to voluntarily self-disclose criminal violations of national security laws—including export control and sanctions laws, and foreign investment and foreign telecommunication laws—should report those disclosures directly to NSD.[1] The announcement follows the Department of Justice’s (DOJ) March 10, 2026 release of its first-ever Department-wide Corporate Enforcement Policy (CEP), which established a unified framework for how DOJ evaluates corporate voluntary self-disclosures, cooperation, and remediation across all DOJ components, except the Antitrust Division.[2]

Continue Reading NSD Flags Its Role as the Front Door for National Security-Related Voluntary Self-Disclosures Under the New Department-Wide Corporate Enforcement Policy

On March 18, 2026, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) issued General License (GL) 52, authorizing certain transactions involving Petróleos de Venezuela, S.A. (PdVSA), or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest (collectively, PdVSA Entities) by an established U.S. entity.[1] Concurrently with GL 52, OFAC issued two new Venezuela-related Frequently Asked Questions (FAQs) addressing key aspects of GL 52. Since January 2026, the U.S. government has issued a series of general licenses authorizing sector- or activity-specific dealings relating to Venezuela (including PdVSA Entities) under specified conditions. This latest general license represents a further step by the U.S. government to encourage investment in Venezuelan oil production, as part of a broader effort to expand Venezuela’s production and export capacity.[2]

Continue Reading OFAC Issues GL 52, Further Loosening Sanctions Against PdVSA