Treasury to Finalize Expansion of CFIUS Covered Military Bases
The Treasury Department is putting eight more military bases under the jurisdiction of the Committee on Foreign Investment in the U.S. after proposing the additions in May (see 2305040052). The expansion, effective Sept. 22, includes the Grand Forks Air Force Base in North Dakota that was the subject of a controversial CFIUS decision last year (see 2212150035, 2212290023 and 2208310066) as well as bases in Texas, California, South Dakota, Iowa and Arizona. CFIUS will be able to intervene in certain land purchases by foreign buyers if they are near any of those sensitive military bases.
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Treasury, alongside the Census Bureau, also plans to release a new digital tool to help investors and others understand which real estate purchases may be subject to CFIUS jurisdiction. The tool, which was not yet available as of press time, “allows users to input an address and determine the distance to certain military installations,” the agency said in its final rule released Aug. 22. “The tool was developed to assist the public and is provided for reference only; it should not be interpreted as guidance or an advisory opinion by CFIUS with respect to any particular transaction.”
The agency received several comments on its proposed rule to add the eight military bases, including one that said the list should also include Whiteman Air Force Base in Missouri. Treasury declined to consider the base, saying the Defense Department makes those decisions and “will continue on an ongoing basis to assess its military installations and the geographic scope set under the rule.”
Another commenter asked for guidance about whether “legal name changes, inherited property, and gifts to relatives” fall under the scope of CFIUS’ definition of real estate transactions. The agency said covered real estate transactions are only purchases, leases or concessions by or to a “foreign person of covered real estate that affords the foreign person” certain property rights, and real estate acquired through a gift or inheritance is “distinct” from that definition.
But an investor that “amends a property record or document to reflect a legal name change” may fall under the definition, the agency said, adding that “further analysis of the underlying reason for the name change would be required.” Treasury said a corporate name change may “follow an acquisition transaction,” and “depending on the rights conveyed in that transaction, could be a covered real estate transaction.”
Treasury also made several “technical amendments” to update the names of five military bases already listed: Fort Cavazos (formerly Fort Hood), Texas; Fort Gregg-Adams (formerly Fort Lee), Virginia; Fort Johnson (formerly Fort Polk), Louisiana; Fort Liberty (formerly Fort Bragg), North Carolina; and Fort Moore (formerly Fort Benning), Georgia. The name changes take effect Aug. 23.