Bill on Foreign Investment Advances
Thursday, March 1, 2007
The House agreed yesterday to give the government broader powers to review foreign investments in U.S. power plants, ports and other facilities that could be vulnerable to terrorist attacks.
The legislation, passed 423 to 0, would give legal muscle to a once-obscure federal office that gained attention a year ago when a Dubai company planned to manage six large U.S. ports.
The deal fell through after lawmakers from both parties said the Committee on Foreign Investment in the United States, or CFIUS, ignored serious national security concerns in signing off on the transaction.
The legislation, which moves to the Senate, would expand the definition of transactions that require CFIUS review to include those involving homeland security and critical infrastructures, and would take steps to ensure that high-level officials would be involved in decisions by the multi-agency group.
"This bill contains very tough provisions to protect national security, including the ability for CFIUS to reopen reviews when companies don't comply with mitigation agreements designed to reduce security risks," said Rep. Carolyn B. Maloney (D-N.Y.), a sponsor.
The legislation would ensure that Congress is notified when investigations are complete. Lawmakers' complaints that they were left out of the process were a major factor in the anger engendered by the proposed Dubai Ports World deal.
It would require a 45-day investigation, after the initial 30-day review, of any deal involving companies controlled by foreign governments.
Last year, with Congress under Republican control, the House and Senate approved legislation to revamp the CFIUS process, but the two chambers were unable to compromise on a common bill.
The Bush administration said in a statement that it supported the House bill but expressed some reservations, including that extending the investigations to 45 days "may discourage foreign investment by generating uncertainty and delay."
Todd Malan, president of the Organization for International Investment, an association representing U.S. subsidiaries of foreign companies, said he was pleased.
"From a business standpoint, it doesn't screw anything up," Malan said. "It maintains CFIUS's role as a screening process, not as a barrier to foreign investment."