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Hensarling Applauds Passage of NDAA with Critical Foreign Investment Reforms

Washington, Jul 26 -

House Financial Services Committee Chairman Jeb Hensarling (R-TX) issued the following statement upon passage of the conference report to the “John S. McCain National Defense Authorization Act (H.R. 5515).” Hensarling was a House conferee with jurisdiction over the Foreign Investment Risk Review Modernization Act (FIRRMA), which reforms the Committee on Foreign Investment in the United States (CFIUS).

“By focusing on businesses that own, operate, or provide critical infrastructure, targeting specific information or influence that could be transferred, and limiting new jurisdiction to certain categories of investors connected with problematic countries, this agreement ensures the reforms to CFIUS are narrowly focused on national security while keeping America’s doors open to investment—and I was proud to support it.

“I want to thank House Armed Services Committee Chairman Mac Thornberry (R-TX) for his leadership and willingness to work with the Financial Services Committee on a number of provisions where we had shared jurisdiction. I also want to thank the author of the House’s CFIUS bill, Congressman Robert Pittenger (R-NC), who has been a tireless advocate for reform, and my fellow conferees from the Financial Services Committee – Ranking Member Maxine Waters (D-CA) and Monetary Policy and Trade Subcommittee Chairman Andy Barr (R-KY) – for their hard work to ensure that the will of the House was reflected in the conference report.”

The provisions in the final CFIUS agreement taken from the House bill include:

• Elimination of concepts such as “non-passive investment,” “critical infrastructure companies,” and “critical technology companies,” thereby sparing thousands of U.S. businesses with no nexus to national security from potential CFIUS reviews;
• Elimination of ownership and dollar amount thresholds as triggers for CFIUS jurisdiction;
• Elimination of “catch-all” and “parallel business partnership” triggers for expanded CFIUS jurisdiction;
• Elimination of CFIUS discretion to name critical technologies by bypassing export controls;
• Elimination of blanket CFIUS discretion to mandate declarations for any covered transaction;
• Elimination of CFIUS certification authorities for Deputy Assistant Secretary-level individuals, which would have eroded political accountability;
• Inclusion of jurisdiction for certain investments involving the release of U.S. citizens’ sensitive personal data;
• Inclusion of a permanent statutory authority for the administration of export controls;
• Restriction on CFIUS’s use of the term “critical infrastructure,” which will focus resources on specific systems and assets that are likely to be of importance to national security;
• Restriction on regulators’ discretion over the term “material nonpublic technical information;”
• Restriction on how “involvement in substantive decision-making” is applied for minority investments;
• Restriction on filing fee amounts that may be charged by CFIUS.