[Code of Federal Regulations]

[Title 31, Volume 3]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 31CFR800.104]



[Page 932]

 

                  TITLE 31--MONEY AND FINANCE: TREASURY

 

  CHAPTER VIII--OFFICE OF INTERNATIONAL INVESTMENT, DEPARTMENT OF THE 

                                TREASURY

 

PART 800_REGULATIONS PERTAINING TO MERGERS, ACQUISITIONS, AND TAKEOVERS 

BY FOREIGN PERSONS--Table of Contents

 

                            Subpart A_General

 

Sec. 800.104  Transactions or devices for avoidance.



    Any transaction(s) or other device(s) entered into or employed for 

the purpose of avoiding section 721 shall be disregarded, and section 

721 and these rules shall be applied to the substance of the 

transaction(s).



    Example. Corporation A is organized under the laws of a foreign 

state and is wholly owned and controlled by a foreign national. With a 

view towards avoiding possible application of section 721, Corporation A 

transfers money to a U.S. citizen, who, pursuant to informal 

arrangements with Corporation A and on its behalf, purchases all the 

shares in Corporation X, a corporation which is organized under the laws 

of a state of the United States, and which engages in business 

activities in the United States. That sham transaction is subject to 

section 721.