H.R.556: National Security Foreign Investment Reform and Strengthened Transparency Act of 2007 - U.S. Congress

Official Summary

7/26/2007--Public Law. (This measure has not been amended since it was passed by the Senate on June 29, 2007. The summary of that version is repeated here.) Foreign Investment and National Security Act of 2007 - (Sec. 2) Amends the Defense Production Act of 1950 to revise provisions concer

Official Summary

(Sec. 2)

Amends the Defense Production Act of 1950 to revise provisions concerning presidential authority to review certain mergers, acquisitions, and takeovers to direct the President, acting through the Committee on Foreign Investment in the United States (CFIUS), and upon receiving written notification from any parties to a possible merger, acquisition or takeover proposed or pending after August 23, 1988, which could result in foreign control of any person engaged in interstate commerce (covered transaction), to review such covered transaction to determine its effects on national security. Requires CFIUS to investigate a covered transaction which it determines is a foreign government-controlled transaction. Permits any party to a covered transaction to initiate a review by submitting a written notice of the transaction to CFIUS. Authorizes the President or CFIUS to initiate a review of:
(1) any covered transaction;
(2) any covered transaction that has been previously reviewed or investigated, if any party submitted false or misleading material information; or
(3) any covered transaction that has been previously reviewed or investigated, if any party intentionally materially breaches a mitigation agreement or condition imposed on the transaction. Requires CFIUS to immediately conduct an investigation of the effects of certain covered transactions on national security and to take necessary actions to protect the national security, if a review results in a determination that:
(1) the transaction threatens to impair national security and that threat has not been mitigated, or the transaction is a foreign government-controlled transaction;
(2) the transaction would result in control of any U.S. critical infrastructure by a foreign person, if CFIUS determines that the transaction could impair national security and that impairment has not been properly mitigated; or
(3) the lead agency for each covered transaction recommends, and CFIUS concurs, that an investigation be undertaken. Requires such investigations to be completed within 45 days. Provides that an investigation of a foreign government-controlled transaction or one involving a critical infrastructure will not be required if the Secretary of the Treasury and the head of the lead agency jointly determine that the transaction will not impair national security. Requires the chairperson of CFIUS:
(1) to publish in the Federal Register guidance on the types of transactions that CFIUS has reviewed and that have presented national security considerations; and
(2) and head of the lead agency to transmit to specified Members of Congress a certified notice and written report concerning each investigation of a covered transaction. Requires the Director of National Intelligence to conduct an analysis of any threat to national security posed by a covered transaction.

(Sec. 3)

Establishes:
(1) CFIUS as a multi-agency statutory committee and revises its membership; and
(2) an additional Assistant Secretary of the Treasury to perform CFIUS-related duties. Requires the Secretary to designate a CFIUS member(s) to act as the lead agency or agencies with respect to a covered transaction.

(Sec. 4)

Adds several factors to be considered by the President in evaluating a covered transaction, including whether the proposed transaction:
(1) has national security-related effects on U.S. critical technologies; and
(2) is a foreign government-controlled transaction.

(Sec. 5)

Authorizes CFIUS or a lead agency to enter into agreements with parties to a covered transaction to mitigate any threat to national security. Requires the lead agency to negotiate, modify, monitor, and enforce such agreements. Requires designated agencies to provide periodic reports to CFIUS on the implementation of any agreements or conditions.

(Sec. 6)

Authorizes the President to suspend or prohibit any covered transaction that threatens to impair national security. (Current law authorizes the President to suspend or prohibit a transaction by or with foreign persons so that their control will not threaten to impair national security.) Requires (under current law, authorizes) the President to consider specified factors (including those added in this Act) when determining whether to suspend or prohibit a covered transaction.

(Sec. 7)

Requires:
(1) upon request, CFIUS to brief certain Members of Congress of covered transactions for which action has concluded; and
(2) CFIUS annual reports to Congress after completed investigations. Requires specific report information with respect to possible foreign acquisition of U.S. companies involved in the research, development, or production of critical technologies, as well as possible industrial espionage activities. Requires the Secretary to:
(1) annually study foreign direct investments in the United States, especially investments in critical infrastructure and industries affecting national security by foreign governments (or their agents) which comply with any boycott of Israel or do not ban terrorist organizations; and
(2) report each study's results to Congress. Directs the Inspector General of the Treasury to:
(1) conduct an investigation of each failure of the Department of the Treasury to make any report required by CFIUS; and
(2) report to the appropriate congressional committees on investigation results.

(Sec. 8)

Requires the certification of information submitted by a party to a covered transaction.

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U.S. Congress - H.R.556 National Security Foreign Investment Reform and Strengthened Transparency Act of 2007

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(Sec. 2)

(Sec. 3)

(Sec. 4)

(Sec. 5)

(Sec. 6)

(Sec. 7)

(Sec. 8)

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