Real estate investments by foreigners near more military posts would be subject to review under proposal

Transactions by foreign persons for real estate near more than 50 additional military installations in 30 states would be subject to scrutiny by the federal body that oversees foreign investment in the United States, according to a proposal issued Monday, the Treasury Department said.

In a notice of proposed rulemaking (NPRM), the Treasury, as chair of the Committee on Foreign Investment in the United States (CFIUS), said the proposal is designed to expand CFIUS’s jurisdiction over certain transactions by foreign persons involving real estate in the U.S.

Among the key changes in the proposal, Treasury said, is that it would expand or update:

  • CFIUS’s jurisdiction over real estate transactions to include those within a one-mile radius around 40 additional military installations;
  • CFIUS’s jurisdiction over real estate transactions to include those within a 100-mile radius around 19 additional military installations;
  • CFIUS’s jurisdiction over real estate transactions between 1 mile and 100 miles around eight military installations already listed in the regulations;
  • The names of 14 military installations already listed in the regulations to better assist the public in identifying the relevant sites; and
  • The location of seven military installations already listed in the current regulations to better assist the public in identifying the relevant sites.

According to Treasury, the 50 military additional installations in the 30 states, would be appended to the existing list of installations around which CFIUS has jurisdiction, including over land purchases. This latest update would vastly expand the reach of CFIUS’s real estate jurisdiction, while maintaining its sharp focus on national security, Treasury maintained.

Treasury noted that 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 in close proximity to a military installation or another facility or property of the United States Government.

More specifically, Treasury said, that is real estate near facilities 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.

Treasury also pointed out that 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 proposal was issued with a 30-day comment period.

Treasury Issues Proposed Rule to Expand CFIUS Coverage of Real Estate Transactions Near Military Installations

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