Filing Fees for Notices of Certain Investments in the United States by Foreign Persons and Certain Transactions by Foreign Persons Involving Real Estate in the United States
| Published date | 29 April 2020 |
| Citation | 85 FR 23736 |
| Record Number | 2020-08916 |
| Section | Rules and Regulations |
| Court | Investment Security Office |
Federal Register, Volume 85 Issue 83 (Wednesday, April 29, 2020)
[Federal Register Volume 85, Number 83 (Wednesday, April 29, 2020)]
[Rules and Regulations]
[Pages 23736-23745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08916]
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DEPARTMENT OF THE TREASURY
Office of Investment Security
31 CFR Parts 800 and 802
RIN 1505-AC65
Filing Fees for Notices of Certain Investments in the United
States by Foreign Persons and Certain Transactions by Foreign Persons
Involving Real Estate in the United States
AGENCY: Office of Investment Security, Department of the Treasury.
ACTION: Interim rule with request for comments.
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SUMMARY: The interim rule establishes a fee for parties filing a formal
written notice of a transaction for review by the Committee on Foreign
Investment in the United States (CFIUS). In establishing a fee for such
notices, this rule implements section 1723 of the Foreign Investment
Risk Review Modernization Act of 2018, which amends section 721 of the
Defense Production Act of 1950 to allow CFIUS to collect fees. This
interim rule includes a request for additional public comment.
DATES:
Effective date: The interim rule is effective on May 1, 2020.
Comment date: The Department of the Treasury (Treasury Department)
is seeking written comments from the public on the interim rule, which
must be received by June 1, 2020.
ADDRESSES: Written comments on the interim rule may be submitted
through one of two methods:
Electronic Submission: Comments may be submitted
electronically through the Federal government eRulemaking portal at
https://www.regulations.gov. Electronic submission of comments allows
the commenter maximum time to prepare and submit a comment, ensures
timely receipt, and enables the Treasury Department to make the
comments available to the public.
Mail: Send to U.S. Department of the Treasury, Attention:
Laura Black, Director of Investment Security Policy and International
Relations, 1500 Pennsylvania Avenue NW, Washington, DC 20220.
We encourage comments to be submitted via https://www.regulations.gov. Please submit comments only and include your name
and company name (if any), and cite ``Filing Fees for Notices of
Certain Investments in the United States by Foreign Persons and Certain
Transactions by Foreign Persons Involving Real Estate in the United
States'' in all correspondence. In general, the Treasury Department
will post all comments to https://www.regulations.gov without change,
including any business or personal information provided, such as names,
addresses, email addresses, or telephone numbers. All comments
received, including attachments and other supporting material, will be
part of the public record and subject to public disclosure. You should
only submit information that you wish to make publicly available.
FOR FURTHER INFORMATION CONTACT: For questions about this rule,
contact: Laura Black, Director of Investment Security Policy and
International Relations; Meena R. Sharma, Deputy Director of Investment
Security Policy and International Relations; David Shogren, Senior
Policy Advisor; or James Harris, Senior Policy Advisor, at U.S.
Department of the Treasury, 1500 Pennsylvania Avenue NW, Washington, DC
20220; telephone: (202) 622-3425; email: [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
On March 9, 2020, the Department of the Treasury (Treasury
Department) published a notice of proposed rulemaking amending 31 CFR
part 800 (Part 800) and 31 CFR part 802 (Part 802) to establish filing
fees. 85 FR 13586 (March 9, 2020). (The Office of the Federal Register
made the proposed rule available for public inspection on March 4,
2020.) The proposed rule proposed establishing a filing fee for
``covered transactions'' under Part 800 and ``covered real estate
transactions'' under Part 802 that are filed with the Committee on
Foreign Investment in the United States (CFIUS or the Committee) as
formal written notices. The proposed rule created a new subpart K on
filing fees in each of Part 800 and Part 802, and made a limited number
of revisions to other related sections of those regulations. Public
comments on the proposed rule were due by April 3, 2020 and are
discussed below. This interim rule establishes the filing fees for Part
800 and Part 802--effective May 1, 2020--and also allows the public an
additional opportunity to comment on the rule.
In establishing a fee for formal written notices, this rule
implements section 1723 of the Foreign Investment Risk Review
Modernization Act of 2018 (FIRRMA), which amends section 721 of the
Defense Production Act of 1950 (DPA) to allow CFIUS to collect fees.
FIRRMA authorizes the collection of
[[Page 23737]]
fees with respect to covered transactions and covered real estate
transactions for which a formal written notice is filed with the
Committee--as opposed to, for example, transactions submitted through a
declaration. FIRRMA directs that the fee be based on the value of the
transaction, taking various factors into account. It also provides that
such fees may not exceed an amount equal to the lesser of one percent
of the value of the transaction, or $300,000, adjusted annually for
inflation.
Through FIRRMA, Congress authorized CFIUS to collect fees for
transactions filed by parties through written notices in order to
offset the expenses of the Committee associated with conducting
activities under section 721 of the DPA. Given the growing volume of
work and resources devoted to CFIUS, the Treasury Department determined
that implementing filing fees is appropriate at this time. As discussed
in further detail below, the Treasury Department does not expect the
filing fees to impact levels of foreign investment into the United
States or decisions to file transactions with CFIUS more generally. The
United States remains committed to its open investment policy, and the
funding provided through the filing fees will support CFIUS in
fulfilling its mission of protecting national security while continuing
to welcome foreign investment.
II. Overview of Comments on the Proposed Rule
During the public comment period, the Treasury Department received
written submissions on the proposed rule. All comments received by the
end of the comment period are available on the public rulemaking docket
at https://www.regulations.gov.
The Treasury Department considered each comment submitted on the
proposed rule. Some of the comments were more general in nature, such
as discussing the impact of the rule on foreign investment in the
United States. The Treasury Department recognizes the vital importance
of foreign investment to the U.S. economy. The Treasury Department
drafted the proposed rule, and made revisions in issuing this interim
rule, taking into consideration various factors including the effect on
foreign investment, effect on small business concerns, and expenses of
the Committee associated with conducting activities under section 721
of the DPA. As discussed in the preamble to the proposed rule, the
Treasury Department considered different approaches to the fee
structure and decided that the structure in the proposed rule and this
interim rule was the most appropriate for reasons including
proportionality, administration, clarity, and impact on parties'
decision whether to file a notice. Overall, this filing fee structure
allows the Committee to appropriately generate funding--consistent with
Congressional intent--in order to support the work of the Committee,
but at the same time, the proportional cost in terms of transaction
value is maintained at a low level. This is discussed further below.
One commenter noted that the proposed rule would not establish
filing fees for declarations, but that parties could submit a
declaration on a transaction for which CFIUS subsequently requests a
written notice. The commenter noted that this structure could create a
financial incentive for CFIUS not to complete all action through the
declaration process. The Treasury Department disagrees with this
assertion. First, the approach in the proposed rule and this interim
rule is consistent with what Congress authorized under FIRRMA--that is,
the Committee may impose a filing fee for notices, but not for
declarations. Second, it is in the Committee's interest--both
financially and administratively--to complete all action with respect
to appropriate transactions through the declaration process. The
personnel and resource costs to the Committee of reviewing a notice are
not insignificant and may often exceed the fee for filing a notice.
Thus, there is no real financial incentive for CFIUS not to complete
all action with respect to a transaction through the declaration
process. Third, CFIUS is further bound by the requirement in FIRRMA
that the total amount of fees collected may not exceed the costs of
administering section 721. Finally, as noted above, foreign investment
is vital to the U.S. economy. CFIUS is committed to completing all
action with respect to benign transactions as quickly as possible and
maintaining an open investment environment. The incentives weigh in
favor of CFIUS completing all action with respect to transactions in a
timely manner, as appropriate in light of national security
considerations.
In addition to the comments on the substance of the rule, one
commenter requested an extension of the public comment period for the
proposed rule in light of the challenges posed by the novel coronavirus
pandemic. The Treasury Department recognizes the challenges posed by
the coronavirus pandemic during the public comment period for the
proposed rule. Therefore, as discussed further below, this rule is
being issued as an interim rule and the public will have until June 1,
2020 to provide additional comments. The Treasury Department will,
however, begin to collect fees on May 1, 2020 to ensure that revenue
collected in fiscal year 2020 is as closely aligned as possible to the
estimates made in the Consolidated Appropriations Act, 2020. These fees
will partially offset the ongoing expenses of the Committee, including
workforce expansion and resource expenditure to support the full
implementation of FIRRMA.
The section-by-section analysis below includes responses to other
comments and notes edits that were made to the rule for consistency and
clarity.
III. Summary of Comments and Changes from the Proposed Rule
a. Sections 800.1101/802.1101--Amount of Fee
Consistent with the proposed rule, Sec. Sec. 800.1101 and 802.1101
set forth the fee amount based on the value of the transaction.
Commenters suggested that the Treasury Department impose no fee, or
set the fees lower than those in the proposed rule. The commenters
noted that filing fees could discourage foreign investment in the
United States, and that money used for filing fees would detract from
money that would otherwise go into U.S. business expansion. No specific
data or examples were provided in support of these comments.
The interim rule does not make any changes to the fee structure or
amounts. As explained in the preamble to the proposed rule, because the
fees represent only a small amount (0.15 percent or less) of the
overall value of a given transaction, the Treasury Department does not
believe that the imposition of fees will impact the flow of foreign
investment into the United States. In fact, the Treasury Department
expects that parties may routinely expend more on legal and accounting
fees in connection with a transaction. Additionally, the benefit of
filing a notice and paying the fee is the ``safe harbor'' that may be
obtained upon the conclusion of CFIUS review. This is of considerable
value to transaction parties. Furthermore, transaction parties can take
advantage of the declaration process, which does not require a fee.
One commenter requested that the Treasury Department create an
exemption for ``low-risk'' foreign investors from specific ally and
partner countries of the United States. The commenter suggested either
relieving the relevant filers of the obligation to pay a fee or
creating a separate fee structure with lower fees for these
[[Page 23738]]
foreign investors. The commenter asserted that, with respect to low
threat investors, the administrative burden on CFIUS resources is
relatively low and that investments by these investors would not
require CFIUS to spend a considerable amount of time and money
reviewing such transactions.
The interim rule does not make any changes in response to this
comment. CFIUS reviews every transaction based on the particular facts
and circumstances of the transaction. Every transaction filed with the
Committee as a notice requires specific analysis, due diligence, and
work product, regardless of whether the foreign person is from an ally
or partner country. Therefore, creating an exemption from fees, or a
lower fee structure, for certain foreign investors is not appropriate.
The interim rule clarifies that the filing fees take effect for
formal written notices filed with the Committee on or after May 1,
2020. Parties that have filed a draft written notice pursuant to Sec.
800.501(g) or Sec. 802.501(g) prior to May 1, 2020, but file a formal
written notice on or after May 1, 2020, will be required to pay the
filing fee.
b. Sections 800.1102/802.1102--Timing of Payment
Consistent with the proposed rule, Sec. Sec. 800.1102 and 802.1102
discuss the timing of acceptance of a formal written notice in
connection with transactions where a fee is required. Payment must be
received by the Treasury Department before a formal written notice will
be accepted for review.
A commenter requested that the Treasury Department consider
allowing a ``grace period'' for payment of the fee (e.g., 15 days after
acceptance of a written notice) when the Committee is not able to
complete all action with respect to a transaction through a declaration
and the parties subsequently file a written notice. The commenter
explained that the grace period would reduce delay with respect to the
Committee's review of the transaction.
The interim rule does not make any changes in response to this
comment. Based on over a year of experience with parties filing a
notice after a declaration, the Treasury Department does not anticipate
that requiring payment of the fee at the time of filing a formal
written notice will cause unnecessary delay. Parties filing a notice
after a declaration typically take a few days, if not longer, to
prepare and file the notice. Additionally, the Treasury Department will
accept electronic payment of filing fees, which allows fast payment
processing. Therefore, allowing a grace period for payment of the fee
is unnecessary.
c. Sections 800.1103/802.1103--Valuation
The proposed rule described how to determine the value of a
transaction for purposes of the fee at Sec. Sec. 800.1103 and
802.1103.
One commenter requested clarification whether ``other ownership
interests'' and ``in-kind consideration'' include intangible assets,
such as intellectual property rights. In most cases, the value of a
transaction will be the total value of all consideration that has been
or will be paid in the context of the transaction by or on behalf of
the foreign person that is a party to the transaction, including cash,
assets, shares or other ownership interests, debt forgiveness,
services, or other in-kind consideration. This encompasses intangible
assets, in whatever form. The interim rule adds a reference to
intellectual property in the example at Sec. 800.1103(f)(3) to further
clarify this point.
One commenter requested that the ``value of the transaction'' be
calculated on the basis of the target's U.S. business operations alone
rather than the combination of U.S. and non-U.S. operations as
proposed. The commenter argued that because CFIUS's jurisdiction is
with respect to particular types of transactions involving a U.S.
business or real estate, the calculation of transaction value for
determining fees should follow the same principle.
The interim rule does not make any changes in response to this
comment. FIRRMA directs that the fee shall be based on the ``value of
the transaction,'' and the approach in the proposed rule and interim
rule is consistent with the statute. Moreover, basing the filing fee on
only the value of the U.S. business operations of the target company,
rather than on the contemplated or completed transaction itself, could
introduce undesirable complexity to the filing fee rule. Parties
negotiate and arrive at a value for the overall transaction in the
standard course of dealmaking, which is not always the case with
respect to ascribing a value to a particular geographic portion of the
target's business. It is important to note, however, that the Treasury
Department recognizes there may be situations where a target company
with global operations has a limited presence in the United States. In
response, the proposed rule and interim rule include an exception for
transactions where the value of the transaction is equal to or greater
than $5,000,000, but the value of the interest acquired in the U.S.
business is less than $5,000,000. In such cases, the fee will be $750.
One commenter requested that the rule take into account the unique
characteristics of biotechnology companies, arguing that revenue
(rather than valuation) is the true indicator of company size, or in
the alternative, there should be a separate fee schedule for low or
pre-revenue companies.
The interim rule does not make any changes in response to this
comment. First, FIRRMA directs that the fee be based on the value of
the transaction taking various factors into account, including the
effect on small business concerns. Basing the fee on the transaction
value, rather than the target company's revenue, is consistent with
FIRRMA, as noted above, and an appropriate way to set the fee. The
measure of the value of a transaction should be the amount of
consideration that has been or will be paid, not solely the revenue of
a company. In the event that a target company is a low revenue or pre-
revenue business, the Treasury Department anticipates that the
transaction parties will apportion the fee amount between the parties
appropriately. Regardless of the target's revenue, the foreign investor
is electing to acquire the assets or invest in the U.S. business, and
therefore has some ability to pay. Moreover, in no event will the fee
exceed 0.15 percent of the value of the transaction. Alternatively,
parties have the option of submitting a declaration, which does not
require a fee.
The interim rule includes some clarifying and technical edits in
Sec. Sec. 800.1103 and 802.1103. These edits include clarifications to
Sec. 800.1103(c)(2) to account for the possibility that more than one
U.S. business might be contributed to a joint venture, in which case,
the value of the transaction is the collective value of each U.S.
business contributed. The Treasury Department is considering, and in
particular welcomes comment on, alternative approaches to valuing a
joint venture transaction. One alternative approach under consideration
is to value a joint venture transaction on the basis of the foreign
person's proportional ownership interest in the joint venture. Another
approach is to base the value on the contribution made by the foreign
person to the joint venture. In addition, references in subpart K of
the rule to ``interests,'' ``assets,'' and ``rights'' were streamlined,
as appropriate. For example, in Sec. 800.1103(c)(3) ``interest'' is
meant to be inclusive of any assets or rights acquired, as the case may
be for a particular transaction. Clarifying edits were also made to
some of the examples, now consolidated at Sec. Sec. 800.1103(f) and
802.1103(i).
[[Page 23739]]
Finally, in Sec. 800.1103(e), and the corresponding provision in
Sec. 802.1103(h), edits were made to clarify the treatment of
multiple-phase transactions and transactions involving contingent
equity interest. In a multiple-phase transaction, the value of the
transaction includes the total value of each phase, as may be
reasonably determined as of the date of the filing. For contingent
equity interest, the rule describes how to value the consideration for
the acquisition of the contingent equity interest as well as the
consideration for the interest upon conversion, subject to certain
factors. The examples at Sec. Sec. 800.1103(f)(7) and (8), and
802.1103(i)(5) and (6), add further clarity.
d. Sections 800.1104/802.1104--Manner of Payment
No comments were received concerning this section. Accordingly,
consistent with the proposed rule, Sec. Sec. 800.1104 and 802.1104
provide the manner in which payment is to be made. Parties must pay by
electronic payment, in U.S. dollars, and in accordance with the
instructions available on the Treasury Department's website.
e. Sections 800.1105/802.1105--Refunds
No comments were received concerning this section. Consistent with
the proposed rule, Sec. Sec. 800.1105 and 802.1105 discuss the
circumstances when refunds may be issued. The Treasury Department will
not refund a filing fee except in the specific instances noted in the
rule.
f. Sections 800.1106/802.1106--Waiver
No comments were received concerning this section. Consistent with
the proposed rule, Sec. Sec. 800.1106 and 802.1106 describe when a
waiver of the filing fee in whole or in part may be issued.
g. Sections 800.1107/802.1107--Refilings
No comments were received concerning this section. Consistent with
the proposed rule, Sec. Sec. 800.1107 and 802.1107 discuss
applicability of the filing fee in the context of refiled notices.
h. Sections 800.1108/802.1108--Rejection of Voluntary Notice
No comments were received concerning this section. Consistent with
the proposed rule, Sec. Sec. 800.1108 and 802.1108 discuss the process
of rejecting a notice for insufficient payment of the fee.
IV. Rulemaking Requirements
Executive Order 12866
This rule is not subject to the general requirements of Executive
Order 12866, which covers review of regulations by the Office of
Information and Regulatory Affairs (OIRA) in the Office of Management
and Budget (OMB), because it relates to a foreign affairs function of
the United States, pursuant to section 3(d)(2) of that order. In
addition, this rule is not subject to review under section 6(b) of
Executive Order 12866 pursuant to section 7(c) of the April 11, 2018
Memorandum of Agreement between the Treasury Department and OMB, which
states that CFIUS regulations are not subject to OMB's standard
centralized review process under Executive Order 12866.
Justification for Interim Rule
The proposed rule on filing fees was filed with the Office of the
Federal Register on March 4, 2020 and made available for public
inspection at that time. The public comment period ended 30 days later
on April 3, 2020. The Treasury Department received five comment letters
from the public, including one letter requesting an extension in light
of the challenges posed by the novel coronavirus pandemic to the normal
operations of potentially interested parties.
Although several public comments were timely submitted, the
Treasury Department recognizes that some potentially interested parties
may have been unable to comment because of the unique challenges posed
by the coronavirus pandemic. While the Treasury Department has
determined that publishing this rule now and making it effective on May
1, 2020, is appropriate for the reasons stated above, the Treasury
Department also believes that it would benefit the public and the
Committee to receive additional comments on the rule before it is made
final. For that reason, an additional public comment period will
commence concurrently with the filing of this rule with the Office of
the Federal Register. The Treasury Department will consider additional
comments submitted before finalizing this interim rule.
Paperwork Reduction Act
The collection of information contained in this rule has been
submitted to the OMB for review along with the proposed rule, in
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d))
under control number 1505-0121.
The notice requirements in Part 800 and Part 802 were approved
under the Paperwork Reduction Act with a per respondent burden of 130
hours and 116 burden hours, respectively. In the proposed rule, the
Treasury Department invited public comments with respect to the amended
reporting requirements under Sec. Sec. 800.502(c)(1)(viii) and
802.502(b)(1)(ix). No comments were received. An agency may not conduct
or sponsor and a person is not required to respond to a collection of
information unless it displays a valid OMB control number.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq., RFA)
generally requires an agency to prepare an initial regulatory
flexibility analysis unless the agency certifies that the rule will
not, once implemented, have a significant economic impact on a
substantial number of small entities. The RFA applies whenever an
agency is required to publish a general notice of proposed rulemaking
under section 553(b) of the APA, or any other law. As set forth in the
preamble to the proposed rule at Section III, because rules issued
pursuant to the DPA, such as this rule, are not subject to the APA or
another law requiring the publication of a general notice of proposed
rulemaking, the RFA does not apply. Nevertheless, for the reasons
detailed in the RFA section of the proposed rule, the Secretary of the
Treasury certified that the proposed rule, if implemented, will not
have a ``significant economic impact on a substantial number of small
entities,'' 5 U.S.C. 605(b). The Treasury Department also invited
public comment on how the proposed rule would affect small entities.
Only one commenter discussed the proposed rule's analysis with
respect to the potential impact on small businesses, particularly in
the biotechnology industry. The commenter noted that an analysis of
venture capital investment trends in the U.S. biotechnology industry
suggests that biotechnology companies may be disproportionately
impacted by the rule due to having characteristics of small businesses
despite valuations being more typical of large businesses. The
commenter did not offer additional details supporting the implicit
assertion that biotechnology companies are small businesses or the
conclusion that they are disproportionately impacted by the rule. Due
to the limitations in available data, it is difficult to draw
conclusions with respect to the biotechnology industry and the
particular impact of this interim rule. In any case, as discussed in
the proposed rule, the fee is only incurred when parties file a
[[Page 23740]]
formal written notice of a transaction with the Committee. (Even then,
transactions under a certain size pay no fee or only a small fee of no
more than 0.15 percent of the value of the transaction.) No fee is
required for the submission of a declaration, which is available for
any transaction under Part 800 and Part 802. Declarations will take
less time and incur less cost for parties to complete. Additional
information about declarations, including the procedures to file them
and their content requirements, is available in the final CFIUS rules
at 85 FR 3112 (Jan. 17, 2020) and 85 FR 3158 (Jan. 17, 2020).
For the reasons above, the Secretary of the Treasury certifies that
this interim rule will not have a significant economic impact on a
substantial number of small entities.
Congressional Review Act
This rule has been submitted to OIRA which has determined that the
rule is not a ``major'' rule under the Congressional Review Act.
List of Subjects
31 CFR Part 800
Foreign investments in the United States, Investments, Investment
companies, National defense, Fees.
31 CFR Part 802
Foreign investments in the United States, Federal buildings and
facilities, Government property, Investigations, Investments,
Investment companies, Land sales, National defense, Public lands, Real
property acquisition, Reporting and Recordkeeping requirements, Fees.
For the reasons set forth in the preamble, the Treasury Department
amends 31 CFR parts 800 and 802 as follows:
PART 800--REGULATIONS PERTAINING TO CERTAIN INVESTMENTS IN THE
UNITED STATES BY FOREIGN PERSONS
0
1. The authority citation for part 800 continues to read as follows:
Authority: 50 U.S.C. 4565; E.O. 11858, as amended, 73 FR 4677.
Subpart E--Notices
Sec. 800.501 [Amended]
0
2. Amend Sec. 800.501:
0
a. In paragraph (a) by adding ``, and paying the fee required under
subpart K of this part'' after ``including the certification required
under paragraph (l) of that section''; and
0
b. In paragraph (f) by adding ``, and payment of the fee required under
subpart K of this part,'' after ``including the certification required
by Sec. 800.502(l)''.
0
3. Amend Sec. 800.502 by revising paragraph (c)(1)(viii) to read as
follows:
Sec. 800.502 Contents of voluntary notices.
* * * * *
(c) * * *
(1) * * *
(viii)(A) The value of the transaction in U.S. dollars, as
determined under Sec. 800.1103, and the parties' assessment of the
applicable fee due under Sec. 800.1101, including an explanation of
the methodology used to determine such valuation and applicable fee;
and
(B) If different than the value of the transaction provided in
paragraph (c)(1)(viii)(A) of this section, a good faith approximation
of the net value of the interest acquired in the U.S. business in U.S.
dollars, as of the date of the notice.
* * * * *
0
4. Amend Sec. 800.503:
0
a. In paragraph (a)(1), by removing the word ``and'';
0
b. By redesignating paragraph (a)(2) as paragraph (a)(3); and
0
c. By adding new paragraph (a)(2).
The addition reads as follows:
Sec. 800.503 Beginning of 45-day review period.
(a) * * *
(2) Confirmed that the applicable fee required under subpart K of
this part has been received by the Department of the Treasury, or
waived; and
* * * * *
0
5. Amend Sec. 800.504 by redesignating paragraphs (a)(3) and (4) as
paragraphs (a)(4) and (5), respectively, and adding new paragraph
(a)(3) to read as follows:
Sec. 800.504 Deferral, rejection, or disposition of certain
voluntary notices.
(a) * * *
(3) Reject any voluntary notice at any time upon determining that
the filing fee paid by the parties was insufficient under subpart K of
this part, subject to Sec. 800.1108.
* * * * *
0
6. Add subpart K to read as follows:
Subpart K--Filing Fees
Sec.
800.1101 Amount of fee.
800.1102 Timing of payment.
800.1103 Valuation.
800.1104 Manner of payment.
800.1105 Refunds.
800.1106 Waiver.
800.1107 Refilings.
800.1108 Rejection of voluntary notice.
Subpart K--Filing Fees
Sec. 800.1101 Amount of fee.
Except as otherwise provided in this subpart, the parties filing a
formal written notice of a transaction with the Committee under Sec.
800.501(a) on or after May 1, 2020, shall pay a filing fee as follows:
(a) Where the value of the transaction is less than $500,000: No
fee;
(b) Where the value of the transaction is equal to or greater than
$500,000 but less than $5,000,000: $750;
(c) Where the value of the transaction is equal to or greater than
$5,000,000 but less than $50,000,000: $7,500;
(d) Where the value of the transaction is equal to or greater than
$50,000,000 but less than $250,000,000: $75,000;
(e) Where the value of the transaction is equal to or greater than
$250,000,000 but less than $750,000,000: $150,000;
(f) Where the value of the transaction is equal to or greater than
$750,000,000: $300,000.
Sec. 800.1102 Timing of payment.
Subject to Sec. Sec. 800.1106 through 800.1108, the Staff
Chairperson shall not accept a formal written notice under Sec.
800.503(a) until payment of any fee required under this subpart is
received by the Department of the Treasury in the manner specified on
the Committee's section of the Department of the Treasury website.
Sec. 800.1103 Valuation.
(a) Except as provided in paragraph (c) of this section, the value
of the transaction for purposes of determining the required fee amount
in this subpart means the total value of all consideration that has
been or will be provided in the context of the transaction by or on
behalf of the foreign person that is a party to the transaction,
including cash, assets, shares or other ownership interests, debt
forgiveness, or services or other in-kind consideration.
(b) Determining the value of consideration:
(1) Where the consideration is or includes securities traded on a
national securities exchange, the value of the securities is the
closing price on the national securities exchange on which the
securities are primarily traded on the trading day immediately prior to
the date the parties file the formal written notice with the Committee
under Sec. 800.501(a), or if the securities were not traded on that
day, the last published closing price.
(2) Where the consideration is or includes other non-cash assets,
services, interests, or other in-kind consideration, the value of the
assets, services,
[[Page 23741]]
interests, or other in-kind consideration is their fair market value as
of the date the parties file the formal written notice.
(3) Where the transaction is or includes a lending transaction, the
consideration includes the cash value of the loan, or similar financing
arrangement, made available or provided by or on behalf of the foreign
person that is a party to the transaction.
(4) Where the transaction is or includes the conversion of a
contingent equity interest previously acquired by a foreign person that
is a party to the transaction, the consideration includes what was paid
by or on behalf of the foreign person to initially acquire the
contingent equity interest, in addition to any other consideration paid
or to be paid in connection with the conversion.
(c) Exceptions:
(1) To the extent the consideration to be provided by the foreign
person has not been or cannot reasonably be determined as of the date
the parties file the notice, the value of the transaction includes,
with respect to the interest for which consideration has not been
determined, the fair market value of the interest being acquired in the
transaction as of the date the parties file the formal written notice.
Note 1 to Sec. 800.1103(c)(1): The consideration amount may be
determined notwithstanding minor standard adjustments that are to be
made at closing.
(2) Where the transaction involves a merger or the contribution of
one or more U.S. businesses to a joint venture, the value of the
transaction is the fair market value of the U.S. business(es) being
merged or contributed.
(3) Where the value of a transaction is $5,000,000 or more, but the
transaction includes one or more non-U.S. businesses, and the value of
the interest acquired in the U.S. business is less than $5,000,000, the
filing fee under Sec. 800.1101(b) is applicable. The value of the U.S.
business, for purposes of this paragraph, is the fair market value of
the assets of the U.S. business.
(d) Fair market value means the price that would be received in
exchange for sale of an interest, or paid to receive a service or to
transfer liability, in an orderly transaction between market
participants.
(1) In determining fair market value, parties shall make a good
faith estimate and generally may rely on the last valuation as
presented in financial statements prepared in accordance with generally
accepted accounting principles (GAAP) or other widely recognized
accounting principles, such as the International Financial Reporting
Standards, or the valuation of an independent appraiser; provided,
however, that if no valuation has occurred within the prior two fiscal
quarters, or if there have been significant changes to the fair market
value since the last valuation, the parties shall make a good faith
estimate at the time of filing the formal written notice, or, if the
parties are filing after the completion of the transaction, the
completion date of the transaction.
(2) In determining the fair market value of services, the parties
may rely upon the value of services determined by the parties as set
forth in an executed written agreement, or make an estimate at the time
of filing the formal written notice based upon rates charged to third
parties or upon recent industry reports or other sources of comparable
commercial data; provided, however, if such sources are unavailable,
the parties shall make a good faith estimate. If the parties are filing
after completion of the transaction, the parties shall make an estimate
of the fair market value as of the completion date.
(3) The Staff Chairperson is not bound by the parties'
characterization of the transaction and its value or the parties' good
faith approximation provided to the Committee under Sec.
800.502(c)(1)(viii).
(e) Multiple-phase and contingent equity interest transactions:
(1) Where a transaction will be effectuated in multiple phases, the
value of the transaction includes the total value of the multiple
phases, as may be reasonably determined as of the date the parties file
the formal written notice.
(2) Where a transaction is or includes the acquisition of
contingent equity interest, the value of the transaction includes the
consideration that was paid by or on behalf of the foreign person to
acquire the contingent equity interest, and, if the conditions that
lead to conversion will occur imminently, the conditions are within the
control of the acquiring party, and the consideration for the interest
that would be acquired upon conversion or satisfaction of contingent
conditions can be reasonably determined at the time of acquisition, any
other consideration paid or to be paid in connection with the
conversion.
Note 2 to Sec. 800.1103(e)(2): See Sec. 800.1103(b)(4)
regarding consideration for a contingent equity interest where the
interest has been converted to equity.
(f) Examples:
(1) Example 1. Corporation A, a foreign person, proposes to acquire
all of the issued and outstanding shares of Corporation B, a U.S.
business, in exchange for $100,000,000 in cash. Assuming no other
relevant facts, the value of the transaction is $100,000,000, and the
filing fee is $75,000.
(2) Example 2. Corporation A, a foreign person, proposes to acquire
all of the issued and outstanding shares of Corporation B, a U.S.
business, in a two-for-one stock swap transaction whereby a holder of a
share of Corporation B's stock is entitled to receive two shares of
Corporation A's stock. Corporation A's stock is listed on the NASDAQ, a
national securities exchange. In aggregate, the holders of Corporation
B's stock will receive 10,000,000 shares of Corporation A's stock in
the transaction. On the trading day immediately prior to the filing of
the formal written notice, the closing price of Corporation A's stock
on NASDAQ was $20 per share. Assuming no other relevant facts, the
value of the transaction is $200,000,000, and the filing fee is
$75,000.
(3) Example 3. Corporation B, a U.S. business, is issuing new
shares that will represent 50 percent of its issued and outstanding
shares. Corporation A, a foreign person, proposes to acquire these
shares. As consideration, Corporation A will contribute to Corporation
B certain inventory, machines, and intellectual property. The parties
to the transaction estimate in good faith, based on the most recent
quarterly financial statements of Corporation A, which were prepared in
accordance with GAAP, that the fair market value of the assets
contributed as consideration is $40,000,000. Assuming no other relevant
facts, the value of the transaction is $40,000,000, and the filing fee
is $7,500.
(4) Example 4. Corporation A and Corporation B are establishing a
joint venture, JV Corp., which will be controlled by Corporation B, a
foreign person. Corporation A contributes a U.S. business, the fair
market value of which is $150,000,000, to JV Corp. Corporation B
contributes $150,000,000 in cash to JV Corp. The value of the
transaction is $150,000,000, which is equal to the value of the U.S.
business being contributed. Assuming no other relevant facts, the
filing fee is $75,000.
(5) Example 5. Corporation A, a foreign person, enters into a stock
purchase agreement with Person Z to acquire 100 percent of the issued
and outstanding shares of Corporation B, a U.S. business. The value of
the consideration has not been determined because it will be payable
only once Corporation B achieves certain development and sales
milestones, and it will be 10 percent of Corporation B's revenue over a
future five-year period. The parties estimate in good faith that the
fair market value of 100 percent of the shares of Corporation B is
[[Page 23742]]
$30,000,000 based on a number of factors, including application of
well-known accounting standards such as Financial Accounting Standards
Board Statement 157, a recent valuation conducted by a third-party
auditor, and a proposal to acquire Corporation B made by another bidder
for approximately $30,000,000 in cash. Assuming no other relevant
facts, the value of the transaction is $30,000,000, and the filing fee
is $7,500.
(6) Example 6. Corporation A, a foreign person, proposes to acquire
100 percent of the assets of Corporation B, a foreign person, for
$100,000,000. Corporation B has subsidiaries in several countries,
including Corporation C, a U.S. business. The fair market value of
Corporation C's assets is $1,000,000. Assuming no other relevant facts,
under paragraph (c)(3) of this section, a $750 filing fee is required.
(7) Example 7. Corporation A, a foreign person, proposes to acquire
50 percent of the voting interest of Corporation B, a U.S. business.
Under the terms of a stock purchase agreement, the transaction will be
effectuated in two phases. First, Corporation A will acquire 25 percent
of the voting interest of Corporation B in exchange for $30,000,000
(phase 1). Two months later, Corporation A will acquire the other 25
percent of the voting interest of Corporation B in exchange for another
$30,000,000 (phase 2). Assuming no other relevant facts, the value of
the consideration is $60,000,000 (the total consideration for both
phases), and the filing fee is $75,000.
(8) Example 8. Corporation A, a foreign person, pays $5,000,000 to
acquire 100,000 shares and call options from Corporation B, a U.S.
business. The call options can be exercised after 90 days, and if
exercised, Corporation A will have the right to acquire another 60,000
shares of Corporation B in exchange for an additional $3,000,000.
Because the options may be exercised imminently, conversion of the call
options is in the control of Corporation A, and the consideration for
the interest acquired as a result of conversion can be reasonably
determined, the value of the transaction includes the consideration for
the shares and the call options as well as the consideration paid to
exercise the options. Assuming no other relevant facts, the value of
the consideration is $8,000,000, and the filing fee is $7,500.
(g) The determination of the value of the transaction for purposes
of calculating the filing fee in no way limits the Committee's
jurisdiction or its authority to review, investigate, mitigate, impose
penalties regarding, or take any other action regarding any covered
transaction.
Sec. 800.1104 Manner of payment.
Parties to a transaction must pay any filing fee by electronic
payment. The filing fee must be paid in U.S. dollars. Instructions for
paying filing fees are available on the Committee's section of the
Department of the Treasury website.
Sec. 800.1105 Refunds.
(a) Except as provided in paragraphs (b) and (c) of this section,
the Department of the Treasury shall not refund a filing fee in whole
or in part.
(b) If the Committee determines that the transaction is not a
covered transaction, the filing fee shall be refunded.
(c) In response to a petition by a party, if the Staff Chairperson
determines, based on the information and representations contained in
the formal written notice, as well as any other information provided by
the parties, that a party or the parties to a transaction paid a filing
fee in an amount greater than required at the time of filing, the
Department of the Treasury shall refund the amount of overpayment to
the party or parties who paid the filing fee.
Sec. 800.1106 Waiver.
If the Staff Chairperson determines that extraordinary
circumstances relating to national security warrant, the Staff
Chairperson may waive the filing fee in whole or in part and will
notify the parties in writing. No waiver shall be implied, even where
the Staff Chairperson does not reject a voluntary notice under Sec.
800.1108 for failure to pay the required filing fee.
Sec. 800.1107 Refilings.
The parties to a transaction shall not be required to pay an
additional filing fee in the event that the Staff Chairperson permits
the parties to withdraw and refile a notice under Sec. 800.509(c)(2),
unless the Staff Chairperson determines that a material change to the
transaction has occurred, or a material inaccuracy or omission was made
by the parties in information provided to the Committee, that requires
the Committee to consider new information, in which case the Staff
Chairperson will inform the parties in writing.
Sec. 800.1108 Rejection of voluntary notice.
The Staff Chairperson may reject a voluntary notice under Sec.
800.504(a)(3) upon a determination that the amount of the filing fee
paid by the parties was insufficient under this subpart. Prior to
rejecting a notice under Sec. 800.504(a)(3), the Staff Chairperson
shall inform the parties in writing of the insufficiency of payment and
provide the parties three business days to pay the remainder of the
filing fee. If the Staff Chairperson does not reject a voluntary notice
under Sec. 800.504(a)(3) upon a determination that the amount of the
filing fee payment paid by the parties was insufficient under this
section, the balance of the fee remains payable unless the Staff
Chairperson notifies the parties in writing that the payment has been
waived in whole or in part.
PART 802--PROVISIONS PERTAINING TO CERTAIN TRANSACTIONS BY FOREIGN
PERSONS INVOLVING REAL ESTATE IN THE UNITED STATES
0
7. The authority citation for part 802 continues to read as follows:
Authority: 50 U.S.C. 4565; E.O. 11858, as amended, 73 FR 4677
Subpart E--Notices
Sec. 802.501 [Amended]
0
8. Amend Sec. 802.501:
0
a. In paragraph (a) by adding ``, and paying the fee required under
subpart K of this part'' after ``including the certification required
under paragraph (h) of that section''; and
0
b. In paragraph (f) by adding ``, and payment of the fee required under
subpart K of this part,'' after ``including the certification required
by Sec. 802.502(h)''.
0
9. Amend Sec. 802.502 by revising paragraph (b)(1)(ix) to read as
follows:
Sec. 802.502 Contents of voluntary notices.
* * * * *
(b) * * *
(1) * * *
(ix)(A) The value of the transaction in U.S. dollars, as determined
under Sec. 802.1103, and the parties' assessment of the applicable fee
due under Sec. 802.1101, including an explanation of the methodology
used to determine such valuation and applicable fee; and
(B) If different than the value of the transaction provided in
paragraph (b)(1)(ix)(A) of this section, a good faith approximation of
the fair market value of the interest acquired in the covered real
estate in U.S. dollars, as of the date of the notice.
* * * * *
0
10. Amend Sec. 802.503:
0
a. In paragraph (a)(1), by removing the word ``and'';
0
b. By redesignating paragraph (a)(2) as paragraph (a)(3); and
0
c. By adding new paragraph (a)(2).
The addition reads as follows:
[[Page 23743]]
Sec. 802.503 Beginning of 45-day review period.
(a) * * *
(2) Confirmed that the applicable fee required under subpart K of
this part has been received by the Department of the Treasury, or
waived; and
* * * * *
0
11. Amend Sec. 802.504 by redesignating paragraphs (a)(3) and (4) as
paragraphs (a)(4) and (5), respectively, and adding new paragraph
(a)(3) to read as follows:
Sec. 802.504 Deferral, rejection, or disposition of certain
voluntary notices.
(a) * * *
(3) Reject any voluntary notice at any time upon determining that
the filing fee paid by the parties was insufficient under subpart K of
this part, subject to Sec. 802.1108.
* * * * *
0
12. Add subpart K to read as follows:
Subpart K--Filing Fees
Sec.
802.1101 Amount of fee.
802.1102 Timing of payment.
802.1103 Valuation.
802.1104 Manner of payment.
802.1105 Refunds.
802.1106 Waiver.
802.1107 Refilings.
802.1108 Rejection of voluntary notice.
Subpart K--Filing Fees
Sec. 802.1101 Amount of fee.
Except as otherwise provided in this subpart, the parties filing a
formal written notice of a transaction with the Committee under Sec.
802.501(a) on or after May 1, 2020, shall pay a filing fee as follows:
(a) Where the value of the transaction is less than $500,000: No
fee;
(b) Where the value of the transaction is equal to or greater than
$500,000 but less than $5,000,000: $750;
(c) Where the value of the transaction is equal to or greater than
$5,000,000 but less than $50,000,000: $7,500;
(d) Where the value of the transaction is equal to or greater than
$50,000,000 but less than $250,000,000: $75,000;
(e) Where the value of the transaction is equal to or greater than
$250,000,000 but less than $750,000,000: $150,000;
(f) Where the value of the transaction is equal to or greater than
$750,000,000: $300,000.
Sec. 802.1102 Timing of payment.
Subject to Sec. Sec. 802.1106 through 802.1108, the Staff
Chairperson shall not accept a formal written notice under Sec.
802.503(a) until payment of any fee required under this subpart is
received by the Department of the Treasury in the manner specified on
the Committee's section of the Department of the Treasury website.
Sec. 802.1103 Valuation.
Except as provided in paragraph (e) of this section, the value of
the transaction for purposes of determining the required fee amount in
this subpart shall be determined as follows:
(a) For a transaction structured as a purchase, by the total value
of all consideration that has been or will be provided in the context
of the transaction by or on behalf of the foreign person that is a
purchaser in the transaction, including cash, assets, shares or other
ownership interests, debt forgiveness, or services or other in-kind
consideration.
(b) For a transaction structured as a lease, by the value of the
sum of, as applicable:
(1) Any fixed payments to be paid by the foreign person that is a
lessee in the transaction to, or for the benefit of, the lessor over
the term of the lease;
(2) Any variable payments that depend on an index or a rate (such
as a market interest rate) to be paid by the foreign person that is a
lessee in the transaction to, or for the benefit of, the lessor, over
the term of the lease, measured for purposes of this section by using
the index or rate on the day immediately prior to the date the parties
file the formal written notice; and
(3) Any non-cash consideration to be provided by the foreign person
that is a lessee in the transaction to, or for the benefit of, the
lessor, over the term of the lease, as may be reasonably determined as
of the date the parties file the formal written notice.
(c) For a transaction structured as a concession, by the value of
the sum of all rent, fees, and charges to be paid by the foreign person
to the grantor and any non-cash consideration to be provided by such
foreign person to, or for the benefit of, the grantor, over the term of
a concession agreement, as may be reasonably determined as of the date
the parties file the formal written notice.
(d) Determining the value of consideration:
(1) Where the consideration is or includes securities traded on a
national securities exchange, the value of the securities is the
closing price on the national securities exchange on which the
securities are primarily traded on the trading day immediately prior to
the date the parties file the formal written notice with the Committee
under Sec. 802.501(a), or if the securities were not traded on that
day, the last published closing price.
(2) Where the consideration is or includes other non-cash assets,
services, interests, or other in-kind consideration, including real
property contributed by a foreign person that is party to a transaction
involving the exchange of land or contribution to a joint venture, the
value of the assets, service, interests, or other in-kind consideration
is their fair market value as of the date the parties file the formal
written notice.
(3) Where the transaction is or includes a lending transaction, the
consideration includes the cash value of the mortgage, loan, or similar
financing arrangement, made available or provided by or on behalf of
the foreign person that is a party to the transaction.
(4) Where the transaction is or includes the conversion of a
contingent equity interest previously acquired by a foreign person that
is a party to the transaction, the consideration includes what was paid
by or on behalf of the foreign person to initially acquire the
contingent equity interest, in addition to any other consideration paid
or to be paid in connection with the conversion.
(e) Exceptions:
(1) In the case of a purchase, to the extent the consideration to
be provided by the foreign person has not been or cannot reasonably be
determined as of the date the parties file the formal written notice,
the value of the transaction includes, with respect to assets for which
consideration has not been determined, the fair market value of the
assets being purchased in the transaction as of the date the parties
file the formal written notice.
Note 1 to Sec. 802.1103(e)(1): The consideration amount may be
determined notwithstanding minor standard adjustments that are to be
made at closing.
(2) In the case of a lease or concession, where the consideration
to be provided by the foreign person has not been or cannot reasonably
be determined at the time of filing, or, where the parties cannot
reasonably determine the value of rent, fees, charges, or services
under paragraph (c) of this section, the filing fee required shall be
that required under Sec. 802.1101(b).
(f) The Staff Chairperson is not bound by the parties'
characterization of the transaction and its value or their good faith
approximation provided to the Committee under Sec. 802.502(b)(1)(ix).
(g) Fair market value means the price that would be received in
exchange for sale of an interest, or paid to receive a service or to
transfer liability, in an orderly transaction between market
participants.
(1) In determining fair market value, parties shall make a good
faith estimate and generally may rely on the last
[[Page 23744]]
valuation as presented in financial statements prepared in accordance
with generally accepted accounting principles or other widely
recognized accounting principles, such as the International Financial
Reporting Standards, or the valuation of an independent appraiser;
provided, however, that if no valuation has occurred within the prior
two fiscal quarters, or if there have been significant changes to the
fair market value since the last valuation, the parties shall make a
good faith estimate at the time of filing the formal written notice,
or, if the parties are filing after the completion of the transaction,
the completion date of the transaction.
(2) In determining the fair market value of services, the parties
may rely upon the value of services determined by the parties as set
forth in an executed written agreement, or make an estimate at the time
of filing the formal written notice based upon rates charged to third
parties or recent industry reports or other sources of comparable
commercial data; provided, however, if such sources are unavailable,
the parties shall make a good faith estimate. If the parties are filing
after completion of the transaction, the parties shall make an estimate
of the fair market value as of the completion date.
(h) Multiple-phase and contingent equity interest transactions:
(1) Where a transaction will be effectuated in multiple phases, the
value of the transaction includes the total value of the multiple
phases, as may be reasonably determined as of the date the parties file
the formal written notice.
(2) Where a transaction is or includes the acquisition of
contingent equity interest, the value of the transaction includes the
consideration that was paid by or on behalf of the foreign person to
acquire the contingent equity interest, and, if the conditions that
lead to conversion will occur imminently, the conditions are within the
control of the acquiring party, and the consideration for the interest
that would be acquired upon conversion or satisfaction of contingent
conditions can be reasonably determined at the time of acquisition, any
other consideration paid or to be paid in connection with the
conversion.
Note 2 to Sec. 800.1103(h)(2): See Sec. 802.1103(d)(4)
regarding consideration for a contingent equity interest where the
interest has been converted to equity.
(i) Examples:
(1) Example 1. Corporation A, a foreign person, enters into an
agreement for the purchase of a parcel of covered real estate (Parcel
X) from Corporation B. In exchange for ownership of Parcel X,
Corporation A forgives a debt owed to it by Corporation B that is
valued at $5,000,000 and pays $35,000,000 to Corporation B. Assuming no
other relevant facts, the value of the transaction is $40,000,000, and
the filing fee is $7,500.
(2) Example 2. Corporation A, a foreign person, enters into an
agreement to lease a parcel of covered real estate from Corporation B.
Pursuant to the agreement, Corporation A will pay Corporation B a fixed
annual payment of $300,000 for a term of three years, with an option to
renew the lease at the end of the term. Assuming no other relevant
facts, the value of the transaction is $900,000, and the filing fee is
$750.
(3) Example 3. Corporation A, a foreign person, proposes to enter
into a concession agreement with a U.S. public entity for the right to
use certain covered real estate for the purpose of developing and
operating terminal infrastructure at a covered port. The concession
agreement is for a five-year term. Under the concession agreement,
Corporation A will pay the U.S. public entity a use charge of $450,000
per year starting in the second year. The concession agreement also
requires Corporation A to pay utility fees and common area maintenance
charges of $5,000 per month for the full concession term. Assuming no
other relevant facts, the value of the transaction is $2,100,000, based
on the $1,800,000 use charge and $300,000 in utility fees. The filing
fee is $750.
(4) Example 4. Corporation A, a foreign person, proposes to enter
into an oil, gas and mineral lease with a U.S. public entity. Under the
terms of the lease, Corporation A pays a lease bonus of $1,000 per acre
as an inducement to execute the lease with respect to a 10-acre parcel
of covered real estate. The lease has a 10-year term. Corporation A
must pay a royalty of 12.5 percent with respect to oil or gas
production from the leased parcel. In the absence of such production,
the foreign person is obligated to pay a rental fee of $1,000 per acre
per year for the first five years and $2,000 per acre thereafter.
Assuming no other relevant facts, the value of the transaction is
$160,000 and there is no filing fee.
(5) Example 5. Corporation A, a foreign person, proposes to
purchase Plot X and Plot Y. The transaction will be completed in two
phases. Corporation A will first acquire Plot X for $30,000,000 (phase
1). One month later, Corporation A will acquire Plot Y for another
$30,000,000 (phase 2). Assuming no other relevant facts, the value of
the consideration is $60,000,000 (the total consideration for both
phases), and the filing fee is $75,000.
(6) Example 6. Corporation A, a foreign person, proposes to
purchase Plot X and acquire an option to purchase Plot Y. Corporation A
will acquire Plot X and the option related to Plot Y in exchange for
$30,000,000. Corporation A informs its shareholders that within two
months, it will exercise the option to purchase Plot Y in exchange for
another $30,000,000. Because the option to convert is imminent and in
the control of Corporation A, and the consideration can be reasonably
determined, the value of the transaction includes the consideration to
be paid in connection with the conversion. Assuming no other relevant
facts, the value of the consideration is $60,000,000 (the total
consideration for the purchase of Plot X and the option to purchase
Plot Y), and the filing fee is $75,000.
(j) The determination of the value of the transaction for purposes
of calculating the filing fee in no way limits the Committee's
jurisdiction or its authority to review, investigate, mitigate, impose
penalties regarding, or take any other action regarding any covered
real estate transaction.
Sec. 802.1104 Manner of payment.
Parties to a transaction must pay any filing fee by electronic
payment. The filing fee must be paid in U.S. dollars. Instructions for
paying filing fees are available on the Committee's section of the
Department of the Treasury website.
Sec. 802.1105 Refunds.
(a) Except as provided in paragraphs (b) and (c) of this section,
the Department of the Treasury shall not refund a filing fee in whole
or in part.
(b) If the Committee determines that the transaction is not a
covered real estate transaction, the filing fee shall be refunded.
(c) In response to a petition by a party, if the Staff Chairperson
determines, based on the information and representations contained in
the formal written notice, as well as any other information provided by
the parties, that a party or the parties to a transaction paid a filing
fee in an amount greater than required at the time of filing, the
Department of the Treasury shall refund the amount of overpayment to
the party or parties who paid the filing fee.
Sec. 802.1106 Waiver.
If the Staff Chairperson determines that extraordinary
circumstances relating to national security warrant, the
[[Page 23745]]
Staff Chairperson may waive the filing fee in whole or in part and will
notify the parties in writing. No waiver shall be implied, even where
the Staff Chairperson does not reject a voluntary notice under Sec.
802.1108 for failure to pay the required filing fee.
Sec. 802.1107 Refilings.
The parties to a transaction shall not be required to pay an
additional filing fee in the event that the Staff Chairperson permits
the parties to withdraw and refile a notice under Sec. 802.509(c)(2),
unless the Staff Chairperson determines that a material change to the
transaction has occurred, or a material inaccuracy or omission was made
by the parties in information provided to the Committee, that requires
the Committee to consider new information, in which case the Staff
Chairperson will inform the parties in writing.
Sec. 802.1108 Rejection of voluntary notice.
The Staff Chairperson may reject a voluntary notice under Sec.
802.504(a)(3) upon a determination that the amount of the filing fee
paid by the parties was insufficient under this subpart. Prior to
rejecting a notice under Sec. 802.504(a)(3), the Staff Chairperson
shall inform the parties in writing of the insufficiency of payment and
provide the parties three business days to pay the remainder of the
filing fee. If the Staff Chairperson does not reject a voluntary notice
under Sec. 802.504(a)(3) upon a determination that the amount of the
filing fee payment paid by the parties was insufficient under this
section, the balance of the fee remains payable unless the Staff
Chairperson notifies the parties in writing that the payment has been
waived in whole or in part.
Dated: April 22, 2020.
Thomas Feddo,
Assistant Secretary for Investment Security.
[FR Doc. 2020-08916 Filed 4-28-20; 8:45 am]
BILLING CODE 4810-25-P
