Press Releases

Subcommittee Examines Proposed CFIUS Legislation


Washington, April 12, 2018 -

The Monetary Policy and Trade Subcommittee met today to discuss proposed legislation that would update the operations of the multi-agency panel known as the Committee on Foreign Investment in the United States (CFIUS). The proposed bill, H.R. 4311, the “Foreign Investment Risk Review Modernization Act of 2017 (FIRRMA),” would expand CFIUS’s jurisdiction to include certain outbound transactions, non-passive investments, and real estate purchases and leases.

“The dramatic increase in the number, size, and complexity of deals CFIUS scanned last year, combined with the notable rise in the percentage of deals that have Chinese ties, is a clear indicator that we should examine ways to modernize the CFIUS process as we head into the third decade of the 21st Century,” said Subcommittee Chairman Andy Barr (R-KY). “Together, I am confident that Congress can improve the CFIUS process in a way that protects national security, while also being careful not to drive away unobjectionable deals that create jobs and opportunities for Americans of all walks of life.”

Topline Quotes from Witnesses

“While it may be appropriate for the government to review outbound investment transactions involving certain technologies, we believe that the language of Section 3(a)(5)(B)(v) is ill-suited to address the very legitimate national security risks that the bill’s proponents have identified. Specifically, this provisions’ sweeping scope over companies and transactions that are not likely to present national security issues would prevent CFIUS from focusing its finite resources on the activities most likely to give rise to genuine national security risks.”– Jonathan S. Kallmer, Senior Vice President, Global Policy, Information Technology Industry Council

“…I am broadly supportive of the CFIUS modernization effort, but I think more work is needed to ensure that the outcome does not have the unintended consequence of chilling investment in the U.S. and harming our competitiveness around the world – both of which are important to our economic strength, which is the backbone of President Trump’s National Security Strategy. … In other words, I humbly suggest that without fixing this bill – we could harm our national security – not enhance it.” – The Honorable Clay Lowery, Managing Director, Rock Creek Global Advisors, and former Assistant Secretary for International Affairs, U.S. Department of the Treasury

“First, any of the steps we take to deter technology transfer from China--which include both CFIUS reform and changes to export controls--needs to be coordinated with allies to be effective. Otherwise, we create an incentive for talent and companies to move offshore. … Second, while defensive measures like CFIUS reform and better export controls are important, they are not the key to winning a technology race with China. The more concerned we are about the national security threat that China represents, as Chairman of the Joint Chiefs of Staff Dunford indicated when he placed China as the #1 national security threat by 2025, the more important it is to invest in science and technology, encourage Americans to pursue STEM education and increase federally funded R&D.” – Michael A. Brown, Presidential Innovation Fellow, Defense Innovation Unit Experimental

“HR 4311 offers several enhancements to the current process that elegantly balance the need to maintain an open investment posture while achieving the primary goal of protecting national security. The legislation expands CFIUS authorities to address today’s threats, provides the mechanism for increasing resources and identifies additional factors relevant to any national security assessments.” – Giovanna M. Cinelli, Partner, Morgan Lewis

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