House Passes Foreign Investment Reform Bill
Washington,
June 26, 2018 -
The House of Representatives today passed the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) by a strong bipartisan vote of 400-2.
“This bill is a comprehensive reform of the Committee on Foreign Investment in the United States (CFIUS) - the first update of its kind in over a decade. CFIUS is authorized to review foreign investment transactions that may threaten our national security, and although these authorities have been wielded carefully, Congress must remain vigilant when delegating additional powers that may have far-reaching effects,” said Financial Services Committee Chairman Jeb Hensarling (R-TX) during today’s debate on the House Floor. “We target those transactions and countries – including China – that truly present a national security risk, but without giving bureaucrats free rein to strangle the investment and innovation that makes our country strong to begin with."
H.R. 5841, the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), sponsored by Representative Robert Pittenger (R-NC), would provide a comprehensive update to both the Committee on Foreign Investment in the United States (CFIUS) and the export control regime. CFIUS, a cross-agency panel that screens proposed foreign investments for national security risks, has not been updated since 2007 and requires modernization to keep pace with the growing number and complexity of foreign investment deals. At the same time, H.R. 5841 makes clear that the U.S. must maintain its enthusiastic support for foreign investment, which is crucial for U.S. jobs, innovation, and productivity.
H.R. 5841 addresses potential national security threats, particularly those emanating from China, by closing loopholes in CFIUS's jurisdiction. The bill also clarifies terms involving critical technologies and infrastructure to give U.S. businesses and foreign investors legal and regulatory certainty.
"For over two years, we have fought for CFIUS reform and the implementation of stronger policies to combat strategic and disruptive Chinese activities. Today, I am grateful that the House is taking action on this issue. This landmark legislation will take enormous steps to improve our foreign investment review process to prevent further transfers of military applicable technologies to the Chinese government," said Pittenger.
“In 2016, new foreign direct investment added $894 billion in value to the U.S. economy. But with a surge of malign investment by the Chinese in U.S. assets resulting in the theft of American intellectual property and the transfer of critical technology, it is vital that Congress modernize both the Committee on Foreign Investment in the United States and our export controls. We can do this by closing loopholes and preventing adversaries from obtaining access to sensitive personal data and critical technology or gaining influence over the management or operations of critical infrastructure in the United States. At the same time, preserving an open investment climate is critical to American competitiveness and economic strength, which is itself a component of American national security. I am proud of the Committee’s work to implement these needed, nonpartisan reforms and I want to especially thank Chairman Hensarling, Representative Pittenger, and House Leadership for their important work to bolster both economic growth and strong national security," said Representative Andy Barr (R-KY), Chairman of the Subcommittee on Monetary Policy and Trade.
The Financial Services Committee favorably reported this bill to the House in May 2018 by a unanimous vote of 53-0.
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