The Senate Banking Committee today unanimously approved legislation requiring federal investigators to ensure no national security threat exists before approving foreign acquisitions of U.S. firms - an issue that stems back to the controversial Dubai Ports World deal last year.
As a member of the banking committee, Sen. Tom Carper (D-Del) said the bill helps ensure homeland security is given greater priority when the federal government approves deals like the one with Dubai Ports World, which last year sought to take over operations at several U.S. ports.
"Homeland security must remain a top priority whenever a foreign company plans to take over an American firm," Sen, Carper said. "After 9-11, the federal government must fully investigate potential security risks before we allow foreign companies, particularly those controlled by foreign governments, to assume control of our vital economic interests, including our ports like ours in Wilmington."
The "Foreign Investment and National Security Act of 2007," modifies current regulations governing the Committee for Foreign Investment in the United States (CFIUS), the inter-agency panel that oversees foreign acquisitions of American firms. This mirrors legislation that passed the Senate banking committee last year, but never became law. This new version would:
• Mandate an investigation for acquisitions by foreign government-owned companies unless the Secretary of the Treasury and the head of the lead agency jointly determine that the transaction will not impair U.S. national security;
• Add the National Director of Intelligence to the CFIUS board, and require an intelligence assessment on all acquisitions brought before the panel;
• Require an assessment of a country's compliance with U.S. and multilateral counterterrorism, non-proliferation and export control regimes for acquisitions by state-owned companies in the investigation stage;
• Give Congress more oversight into the CFIUS process by requiring CFIUS to report to Congress whenever a review started, an investigation is undertaken, and when an investigation is complete;
• Mandate the designation of a lead agency for each reviewed transaction charged with negotiating any conditions necessary to ensure that national security is protected; and
• Create a lead agency - appointed by the Treasury Department - for each CFIUS review that would be responsible for negotiating, monitoring and enforcing mitigation agreements on behalf of CFIUS. The lead agency would be chosen based on the type of transaction.
"We must strike the right balance between protecting our national security interests and promoting foreign investment in the United States," Sen Carper concluded. "I believe we can keep Americans safe, and at the same time encourage healthy foreign investment that creates jobs and expands economic growth here at home."