As the Department of Energy sets to distributing $6 billion from the Infrastructure Investment and Jobs Act, to support domestic battery material processing, manufacturing, and recycling, the Department is required prioritize material processing and manufacturing applicants that will not use battery material supplied by or originating from a “foreign entity of concern” (FEOC).
Beyond the customary foreign terrorist organization designations by State, or OFAC's SDN list, FEOCs are entities owned by, controlled by, or subject to the jurisdiction or direction of a government of a foreign country that is a "covered nation" (Russia, China, North Korea and Iran).
DOE proposes if an entity is “owned by, controlled by, or subject to the direction” of a government of a foreign country that is a covered nation, the entity is a FEOC.
DOE’s proposed interpretation provides for both (1) control via the holding of 25% or more of an entity’s board seats, voting rights, or equity interest, and (2) control via license or contract conferring rights on a person that amount to a conferral of control.
DOE cites a number of analogous regulatory contexts in which a 25% threshold for considering an entity controlled is used. For instance,
Recognizing that it may be difficult to definitively evaluate the contractual relationships of upstream suppliers, DOE is also considering whether to provide entities with the opportunity to voluntarily request a review of contracts and licensing arrangements by DOE in order to provide additional certainty regarding whether effective control by a FEOC is present.
| Filed on: 12/01/2023 at 8:45 am Scheduled Pub. Date: 12/04/2023 FR Document: 2023-26479 |
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