On July 8, 2024, the U.S. Department of the Treasury (“Treasury”), as Chair of the Committee on Foreign Investment in the United States (“CFIUS”), issued a Notice of Proposed Rulemaking (the “Proposed Rule”) that would modify and expand CFIUS’s jurisdiction over certain transactions by foreign persons involving real estate in the United States.

For background, in 2018, Congress enacted the Foreign Investment Risk Review Modernization Act (“FIRRMA”), which, among other things, granted CFIUS authority to review certain real estate transactions near military installations listed in an appendix to CFIUS’s real estate regulations (see our prior update here).  Prior to FIRRMA, CFIUS did not have jurisdiction over real estate transactions that did not involve a U.S. business.  The Proposed Rule, which follows a recent assessment conducted by the Department of Defense (a member of CFIUS), would add 59 military installations, across 30 states, to the list of designated installations in the CFIUS regulations.  This means that CFIUS will now have jurisdiction to review certain transactions involving real estate within specified ranges of those facilities.

Whether CFIUS has jurisdiction over transactions involving real estate depends on the proximity of the real estate to certain designated installations.  The most sensitive installations have a radius of one mile, meaning that CFIUS would have jurisdiction over transactions involving real estate located within one mile of the designated installations.  Other installations have a radius of 100 miles.  The Proposed Rule would: (i) add 40 military installations to the list of facilities over which CFIUS has jurisdiction to review transactions involving real estate located within a one-mile radius; and (ii) add 19 installations to the list of facilities involving a 100-mile radius.  In addition, the Proposed Rule moves eight previously designated installations from the list of installations subject to a one mile radius to the list of installations subject to a 100-mile radius.

A 30-day public comment period will commence once the Proposed Rule is published in the Federal Register.