[Code of Federal Regulations]
[Title 31, Volume 3]
[Revised as of July 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR800.104]

[Page 698]
 
                  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 
 
                            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.