[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: 31CFR800.303]

[Page 704-705]
 
                  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 C_Coverage
 
Sec. 800.303  Lending transactions.

    (a) The extension of a loan or similar financing by a foreign person 
to a U.S. person, accompanied by the creation in the foreign person of a 
secured interest in securities or other assets of the U.S. person, does 
not, by itself, subject the transaction to section 721. However, if 
control is acquired by the foreign person at the time the loan or other 
financing is extended, then the transaction may be subject to section 
721.
    (1) The Committee will not, at the time of extension of the loan or 
other financing, accept notices from parties to a loan or other 
financing transaction in which control is not acquired by the foreign 
person at that time.
    (2) The Committee will accept notices concerning transactions that 
involve loans or financing by foreign persons where, because of imminent 
or actual default or other condition, there is a significant possibility 
that the foreign person may obtain control of the U.S. person.
    (3) For purposes of this section, in determining whether an 
acquisition of a U.S. person by a foreign person results in foreign 
control under section 721, the Committee will take into account 
arrangements which the foreign person might establish to transfer day-
to-day control over the U.S. person to U.S. nationals.
    (b) Control will not be deemed to be acquired for purposes of 
section 721 in cases involving an acquisition of voting securities or 
assets of a U.S. person by a foreign person upon default, or other 
condition, involving a loan or other financing, provided that the loan 
was made by a syndicate of banks in a loan participation where the 
foreign lender (or lenders) in the syndicate:
    (1) Needs the majority consent of the U.S. participants in the 
syndicate to take action, and cannot on its own initiate any action vis-
a-vis the debtor; or
    (2) Does not have a lead role in the syndicate, and is subject to a 
provision in the loan or financing documents limiting its influence, 
ownership or control of the debtor such that control

[[Page 705]]

for purposes of Sec. 800.204 could not be acquired.