Description
The CTA, enacted as part of the National Defense Authorization Act for 2021, requires "reporting companies" to report anyone who owns or controls a 25 percent or greater beneficial ownership interest to a registry maintained by FinCEN. FIRRMA, enacted in 2018 with final regs released in 2020, expanded CFIUS' jurisdiction to include real estate transactions involving the purchase, lease, or concession of certain real estate by a foreign person. These new regimes create new hurdles for borrowers, lenders, and their counsel when structuring commercial real estate loans.
The CTA requires reporting companies to disclose detailed information on each control party and requires that customer due diligence performed by lenders be conformed to the CTA. Existing entities must file beneficial ownership statements within two years after the effective date of the regulations. Any material ownership changes must be reported within one year after such changes are made. Sponsors and lenders will need to examine ownership structures for potential CTA disclosures before and after entering a loan.
FIRRMA expanded CFIUS' authority to review "covered real estate transactions," which are defined under FIRRMA as transactions that give a foreign person control over "covered real estate." Understanding those definitions is critical to comply with the statute, which includes extensive notification and reporting requirements and gives CFIUS the ability to prohibit covered real estate transactions unless they fall within certain exemptions.
Listen as our authoritative panel discusses the ramifications of the CTA and FIRRMA for borrower ownership structuring and loan provisions related to borrower compliance in real estate finance deals.
Presented By
Mr. Beahn has extensive experience representing clients in national security reviews before the Committee on Foreign Investment in the United States, the “Team Telecom” executive branch agencies and the Defense Counterintelligence and Security Agency. He has successfully represented domestic and foreign clients, including purchasers, sellers, investors, private equity sponsors and consortia, and other institutional investors, in transactions and investments subject to CFIUS and other national security reviews. Mr. Beahn has represented clients in a number of the most complex transactions ever approved by CFIUS, DCSA and Team Telecom and has negotiated several of the most comprehensive mitigation agreements executed with the U.S. government. He also represent clients on related national security issues, including supply chain matters, risk mitigation, and compliance monitoring.
Mr. Ferranti has extensive experience representing clients in complex commercial real estate transactions, including in the areas of acquisitions, dispositions, joint ventures, development projects, foreign investment, financings and ground and space leasing. He regularly represents financial institution, sovereign wealth fund, investment fund and individual and institutional investor and developer clients including Olayan America, Credit Suisse, Shorenstein Properties and Metropolitan Life Insurance Co. Mr. Ferranti has written publications in Real Estate Finance & Investment and Law360 and has been involved in a number of speaking engagements at seminars and conferences on various real estate subjects.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Tuesday, May 4, 2021
- schedule
1:00 p.m. ET./10:00 a.m. PT
- Corporate Transparency Act
- Ownership and control thresholds
- Types of entities covered: exempt entities
- Reporting obligations: FinCEN registry
- Lender compliance with CTA
- FIRRMA
- Covered real estate transactions
- Covered real estate
- Reporting obligations
- CFIUS review and ability to block foreign investment
The panel will review these and other important issues:
- What types of LLC members and shareholders must be disclosed to FinCEN under the CTA?
- Does the CTA apply to partnerships?
- How will the CTA change the lender's approach to borrower due diligence and what continuing obligations should be reflected in loan documents?
- What constitutes "covered real estate"?
