Banking Committee Approves Bill to Respond to Dubai Ports Controversy
Legislation Would Beef Up Federal Oversight of Foreign Acquisitions
WASHINGTON (March 30, 2006) – Responding to the controversy generated over the recent Dubai Ports World deal, the Senate Banking Committee today unanimously approved legislation that would require federal investigators to ensure that there is no national security threat before approving foreign acquisitions of U.S. firms. Sen. Tom Carper, D-Del., a member of the Banking panel, said the bill would make sure that homeland security is given greater weight whenever the federal government approves deals such as the one involving Dubai Ports World, which sought to take over operations at several U.S. ports. “The controversy generated over the Dubai Ports deal showed that we need to make sure that homeland security is not an afterthought whenever a foreign company tries to take over an American firm,” said Carper. “In a post 9-11 world, it’s vitally important that we fully investigate any potential security risk before we allow foreign companies, particularly those controlled by foreign governments, to assume control over a vital economic interest. This bill is still a work in progress but represents a step in the right direction. My hope is we can work in a bipartisan way to enact this legislation quickly.” The legislation would modify current regulations governing the Committee for Foreign Investment in the United States (CFIUS), the inter-agency panel that oversees foreign acquisitions of American firms. Specifically, the bill would: · Grant the Department of Defense a more important role in the CFIUS process. The bill would keep the Treasury Department as the lead chair in the CFIUS process but elevate the Department of Defense to vice chair to ensure that national security concerns are addressed alongside the need to promote foreign investment. · Add the National Director of Intelligence to the CFIUS board and require an intelligence assessment on all acquisitions brought before the panel. · Require a full, 45-day investigation if the acquiring entity is controlled by a foreign government or if the acquisition would result in control of critical infrastructure. · Give Congress more oversight into the CFIUS process. CFIUS would have to report to Congress whenever a review has begun, an investigation has been undertaken, and when an investigation is complete. CFIUS would also have to provide an annual report to Congress about its actions through the year, and the chair and vice chair of CFIUS would have to testify annually before Congress. Carper said we need to “strike the right balance” between protecting our national security interests and promoting foreign investment in the United States. “It is possible to keep Americans safe while at the same time promoting healthy foreign investment in the United States – a key ingredient to growing the economy and creating jobs,” said Carper.