National Security Foreign Investment Reform and Strengthened Transparency Act of 2007

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Summary (how summaries work)

The National Security Foreign Investment Reform and Strengthened Transparency Act of 2007 was written less than one year after the Bush administration received criticism for allowing Dubai Ports World (a United Arab Emirates firm) to manage security at U.S. ports. The bill would direct the executive branch to review business transactions to determine their effect on national security. On February 28, 2007, the House passed the bill 423-0. [1]



Contents

Overview


According to House Speaker Nancy Pelosi's (D-Calif.) information page, the bill:

Strengthens the review process for approving foreign investment:

  • Requires the Committee on Foreign Investment in the United States (CFIUS) to conduct a 30-day review of any national security-related business transaction.[2]
  • After a 30-day review is conducted, CFIUS would be required to conduct a full-scale, 45-day investigation of the effects the business transaction would have on national security if the committee review results in any of the following determinations:
  1. the transaction threatens to impair national security and these threats have not been mitigated during the 30-day review;
  2. the transaction is a foreign government-controlled transaction; or
  3. the transaction raises national security risks associated with foreign ownership of critical infrastructure and those risks have not been fully mitigated during the review.[2]
  • Requires CFIUS to designate a lead agency in reviewing transactions, such as DOD for defense acquisitions.[2]
  • Requires that every transaction be subjected to an assessment by the Director of National Intelligence (DNI) and contains provisions to ensure that the DNI has adequate time to conduct the required assessment. It also clarifies that the DNI will have no policymaking role in CFIUS.[2]

Increases accountability:

  • Requires that the Chairman of CFIUS (the Secretary of the Treasury) and the head of the lead agency approve all transactions where CFIUS consideration is completed within the 30-day review period (limiting delegation of approval authority to the Assistant Secretary level).[2]
  • Requires that the President approve all transactions that have also been subjected to the second-stage 45-day national security investigation. [2]
  • Creates a new Assistant Secretary in the Treasury Department who will be charged with CFIUS responsibilities.[2]
  • Requires CFIUS to provide a written certification of each transaction reviewed to congressional leadership, committees with jurisdiction over the transaction, and in cases involving critical infrastructure, Members representing the relevant district/state. [2]
  • Requires CFIUS to file annual reports to Congress that contain information on transactions handled by the committee during the previous year.[2]

Puts the actions of foreign governments under increased scrutiny:

  • Requires that, in cases involving a company that is controlled by a foreign government, that either 1) the Chairman of CFIUS (the Secretary of the Treasury) and the head of the lead agency certify that the transaction poses no national security threat, and this certification may not be delegated below the Deputy Secretary level; or 2) a second-stage 45-day national security investigation of the transaction must take place. [2]

The cost of the bill was estimated at $10 million from 2007 to 2010. [3]

Bill passage

House passes bill

On February 28, 2007, the House passed the bill, sponsored by Rep. Carolyn Maloney (D-N.Y.), 423-0. [4]


Same for all scorecards:

Scored vote

Scorecard: U.S. Chamber of Commerce 2007 House Scorecard

Org. position: Aye

Description:

"With strong backing by the Chamber, the House passed H.R. 556, the National Security Foreign Investment Reform and Strengthened Transparency Act, by a 423-0 vote. This bipartisan bill makes certain that the administration’s process for vetting proposed foreign investments in the United States meets national security objectives while preserving an open, fair, and nondiscriminatory investment environment. Foreign investment in the United States supports employment for more than 5.1 million Americans who typically earn compensation well above the national average. In 2005, a number of foreign-owned companies reinvested $59 billion in profits back into the U.S. economy, providing U.S. firms with capital for expansion of production facilities and resources for increased research and development spending."

(Original scorecard available at: http://www.uschamber.com/issues/legislators/07htv_house.htm)

Prior to the vote, a motion to recommit the bill with instructions (to prevent a vote) failed 193-229.


Senate passes bill with amendment

On June 29, 2007, the Senate passed the bill with an amendment by unanimous consent. [5]

Final approval

The House approved the Senate amendment on July 11, 2007 by a vote of 370-45.


President Bush signed the bill into law on July 26, 2007.[5]

Articles and resources

References

  1. Robert McElroy, “Managing America: Banking & Finance,” ThisWeekInCongress, March 2, 2007.
  2. 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 "Foreign Investment", House Speaker Nancy Pelosi's Web site. Accessed April 17, 2009.
  3. Robert McElroy, “Managing America: Banking & Finance,” ThisWeekInCongress, March 2, 2007.
  4. Robert McElroy, “Managing America: Banking & Finance,” ThisWeekInCongress, March 2, 2007.
  5. 5.0 5.1 OpenCongress info page on H.R. 556.

Resources

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