Menendez Strengthens Foreign Investment Review Bill, Celebrates Bipartisan Passage Through Committee

Menendez Strengthens Foreign Investment Review Bill, Celebrates Bipartisan Passage Through Committee

Recent Pentagon report: "The U.S. does not have a comprehensive policy or the tools to address this massive technology transfer to China…[Beijing's acquisition of top-notch American technology is enabling a] strategic competitor to access the crown jewels of U.S. innovation"

   

WASHINGTON, D.C. – U.S. Senator Bob Menendez, a senior member of the Senate Committee on Banking, Housing and Urban Affairs, and a leading voice on international sanctions and foreign investment review, today celebrated the committee passage of the Foreign Investment Risk Review Modernization Act (FIRRMA), bipartisan legislation that included four Menendez amendments to strengthen the Committee on Foreign Investment in the United States (CFIUS).  As detailed in an extensive Politico investigation, CFIUS currently does not have enough jurisdiction to review foreign investments that countries like China are using extensively to purchase U.S. technology that is essential to national security.

“While President Trump waves a white flag in his Chinese trade negotiations, China is stealing our technology right under our nose,” said Sen. Menendez.  “I’m proud members of both parties could come together to begin to fix this gaping hole in our national security infrastructure that has allowed China to stealthily purchase critical American defense technology.”

One of Menendez’s key provisions included in the legislation would require more information from state-owned enterprises and shell companies.  

“It is critical we update the CFIUS process to better screen foreign investments for risks to our national security,” Menendez continued.  “A key component of that screening, one that I’ve been intensely focused on, is making sure that we have the best information possible on who is benefitting from these investments. So, I’m proud my amendments were accepted to make sure CFIUS looks more closely at foreign governments and shell companies seeking to buy critical technology or infrastructure in the United States.”

Another Menendez amendment established a recusal process and requirement for CFIUS members—including several Cabinet secretaries—who have conflicts of interests due to their own foreign investments.

“As we work to make sure we know as much as possible about the foreign entities looking to invest in sensitive U.S. technology, we should be equally concerned about how the government makes decisions on approving or blocking transactions that might pose a threat to our national security,” Menendez said. “I want to thank all my colleagues for coming to a bipartisan agreement to include my amendment to require CFIUS to establish a recusal process for Administration members that have a conflict of interest with respect to a transaction.”

FIRRMA reforms CFIUS by:

  • Expanding the ability of CFIUS to review certain real estate transactions when they are in close proximity to government installations
  • Requiring greater scrutiny by CFIUS of transactions from countries of ‘special concern’ that involve critical technologies or critical materials
  • Allowing review of transactions when there are material changes in shareholder rights that expand control of or access to sensitive information
  • Providing additional resources to CFIUS to match the expected increased caseload
  • Requiring CFIUS to more closely evaluate state-owned companies and shell companies that don’t report information on their true owners [Menendez amendments]
  • Requiring CFIUS to establish a recusal process for members of the administration that may have conflicts of interest pertaining to transactions under CFIUS review [Menendez amendment]
  • Requiring the Secretary of Commerce to submit a report to Congress on activities to identify and control emerging and foundational technologies [Menendez amendment]

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