Clock Ticking on Effective Date for Some Provisions of Outbound Rule
Okay, let’s not beat a dead horse. The E.O. has been released, and the Treasury Department is seeking comment on their implementing rule, which likely won’t be finalized until next year. But experts clarify that some of the provisions may be effective immediately.
WHAT HAPPENED
As most Foreign Investment Watch readers know, the Treasury Department has published its proposal on outbound investment, as per President Biden’s Executive Order, and is now seeking comments on its Advanced Notice of Proposed Rulemaking.
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Blank Rome partner Anthony Rapa says that it will be important for transaction parties to monitor developments in Congress, “which still may seek to weigh in on the subject.”
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COMPLIANCE / NEXT STEPS
Some have asked whether these “look back” provisions might require a monitoring and enforcement function at Treasury. Goujon at Rhodium Group says that Treasury “is not seeking to boil the ocean with the new rules.” Rather, she says, the compliance burden is on companies to report in. “Over time,” she adds, “I suspect we will see Treasury investigative capacity to expand, as well as dedicated resources for partner alignment.” We covered this topic last week (see the section titled, “Lookback and Enforcement”).
Anthony Rapa, a partner at Blank Rome, agrees, and says firms “should anticipate that Treasury could be prepared to exercise its monitoring function early on, as the rollout of the ANPRM and unveiling of the Outbound Investment Program website may indicate that Treasury is inclined to lean in on the program.”
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“Clock Ticking on Effective Date for Some Provisions of Outbound Rule,” was published in Foreign Investment Watch on August 20, 2023.