Authority to review certain mergers, acquisitions, and takeovers
Definitions
In this section:
Clarification
Committee; chairperson
Control
Covered transaction
In general
Except as otherwise provided, the term “covered transaction” means—
any transaction described in subparagraph (B)(i); and
any transaction described in clauses (ii) through (v) of subparagraph (B) that is proposed, pending, or completed on or after the effective date set forth in section 1727 of the Foreign Investment Risk Review Modernization Act of 2018.
Transactions described
A transaction described in this subparagraph is any of the following:
Any merger, acquisition, or takeover that is proposed or pending after
Subject to subparagraphs (C) and (E), the purchase or lease by, or a concession to, a foreign person of private or public real estate that—
is located in the United States;
is, is located within, or will function as part of, an air or maritime port; or
is in close proximity to a United States military installation or another facility or property of the United States Government that is sensitive for reasons relating to national security;
could reasonably provide the foreign person the ability to collect intelligence on activities being conducted at such an installation, facility, or property; or
could otherwise expose national security activities at such an installation, facility, or property to the risk of foreign surveillance; and
meets such other criteria as the Committee prescribes by regulation, except that such criteria may not expand the categories of real estate to which this clause applies beyond the categories described in subclause (II).
Any other investment, subject to regulations prescribed under subparagraphs (D) and (E), by a foreign person in any unaffiliated United States business that—
owns, operates, manufactures, supplies, or services critical infrastructure;
produces, designs, tests, manufactures, fabricates, or develops one or more critical technologies; or
maintains or collects sensitive personal data of United States citizens that may be exploited in a manner that threatens national security.
Any change in the rights that a foreign person has with respect to a United States business in which the foreign person has an investment, if that change could result in—
foreign control of the United States business; or
an investment described in clause (iii).
Any other transaction, transfer, agreement, or arrangement, the structure of which is designed or intended to evade or circumvent the application of this section, subject to regulations prescribed by the Committee.
Real estate transactions
Exception for certain real estate transactions
A real estate purchase, lease, or concession described in subparagraph (B)(ii) does not include a purchase, lease, or concession of—
a single “housing unit”, as defined by the Census Bureau; or
real estate in “urbanized areas”, as defined by the Census Bureau in the most recent census, except as otherwise prescribed by the Committee in regulations in consultation with the Secretary of Defense.
Definition of close proximity
List of sites
In general
Periodic review of list
Not later than one year after
review the installations, facilities, and properties, if any, included by that member on the list developed under subclause (I); and
submit to the chairperson a report on that review, after approval of the report by the Assistant Secretary or equivalent official designated for the agency under subsection (k)(4)(A)(i), which shall include—
any recommended updates or revisions to the list regarding installations, facilities, and properties administered by the member of the Committee;
any recommendations with respect to what distance, including close proximity or extended range, should apply for purposes of real estate described in subparagraph (B)(ii)(II)(bb); and
a detailed justification and risk assessment underlying any recommendations made under subitem (BB).
Other investments
Other investment defined
For purposes of subparagraph (B)(iii), the term “other investment” means an investment, direct or indirect, by a foreign person in a United States business described in that subparagraph that is not an investment described in subparagraph (B)(i) and that affords the foreign person—
access to any material nonpublic technical information in the possession of the United States business;
membership or observer rights on the board of directors or equivalent governing body of the United States business or the right to nominate an individual to a position on the board of directors or equivalent governing body; or
any involvement, other than through voting of shares, in substantive decisionmaking of the United States business regarding—
the use, development, acquisition, safekeeping, or release of sensitive personal data of United States citizens maintained or collected by the United States business;
the use, development acquisition, or release of critical technologies; or
the management, operation, manufacture, or supply of critical infrastructure.
Material nonpublic technical information defined
In general
For purposes of clause (i)(I), and subject to regulations prescribed by the Committee, the term “material nonpublic technical information” means information that—
provides knowledge, know-how, or understanding, not available in the public domain, of the design, location, or operation of critical infrastructure; or
is not available in the public domain, and is necessary to design, fabricate, develop, test, produce, or manufacture critical technologies, including processes, techniques, or methods.
Exemption for financial information
Regulations
In general
United States businesses that own, operate, manufacture, supply, or service critical infrastructure
The regulations prescribed by the Committee with respect to an investment described in subparagraph (B)(iii)(I) shall—
specify the critical infrastructure subject to that subparagraph based on criteria intended to limit application of that subparagraph to the subset of critical infrastructure that is likely to be of importance to the national security of the United States; and
enumerate specific types and examples of such critical infrastructure.
Specific clarification for investment funds
Treatment of certain investment fund investments
Notwithstanding clause (i)(II) and subject to regulations prescribed by the Committee, an indirect investment by a foreign person in a United States business described in subparagraph (B)(iii) through an investment fund that affords the foreign person (or a designee of the foreign person) membership as a limited partner or equivalent on an advisory board or a committee of the fund shall not be considered an “other investment” for purposes of subparagraph (B)(iii) if—
the fund is managed exclusively by a general partner, a managing member, or an equivalent;
the general partner, managing member, or equivalent is not a foreign person;
the advisory board or committee does not have the ability to approve, disapprove, or otherwise control—
investment decisions of the fund; or
decisions made by the general partner, managing member, or equivalent related to entities in which the fund is invested;
the foreign person does not otherwise have the ability to control the fund, including the authority—
to approve, disapprove, or otherwise control investment decisions of the fund;
to approve, disapprove, or otherwise control decisions made by the general partner, managing member, or equivalent related to entities in which the fund is invested; or
to unilaterally dismiss, prevent the dismissal of, select, or determine the compensation of the general partner, managing member, or equivalent;
the foreign person does not have access to material nonpublic technical information as a result of its participation on the advisory board or committee; and
the investment otherwise meets the requirements of this subparagraph.
Treatment of certain waivers
In general
Exception
Exception for air carriers
Rule of construction
Country specification
Transfers of certain assets pursuant to bankruptcy proceedings or other defaults
Critical infrastructure
Critical technologies
In general
The term “critical technologies” means the following:
Defense articles or defense services included on the United States Munitions List set forth in the International Traffic in Arms Regulations under subchapter M of chapter I of title 22, Code of Federal Regulations.
Items included on the Commerce Control List set forth in Supplement No. 1 to part 774 of the Export Administration Regulations under subchapter C of chapter VII of title 15, Code of Federal Regulations, and controlled—
pursuant to multilateral regimes, including for reasons relating to national security, chemical and biological weapons proliferation, nuclear nonproliferation, or missile technology; or
for reasons relating to regional stability or surreptitious listening.
Specially designed and prepared nuclear equipment, parts and components, materials, software, and technology covered by part 810 of title 10, Code of Federal Regulations (relating to assistance to foreign atomic energy activities).
Nuclear facilities, equipment, and material covered by part 110 of title 10, Code of Federal Regulations (relating to export and import of nuclear equipment and material).
Select agents and toxins covered by part 331 of title 7, Code of Federal Regulations, part 121 of title 9 of such Code, or part 73 of title 42 of such Code.
Emerging and foundational technologies controlled pursuant to section 4817 of this title.
Recommendations
In general
Matters informing recommendations
Foreign government-controlled transaction
Intelligence community
Investment
Lead agency
Party
United States
United States business
National security reviews and investigations
National security reviews
In general
Upon receiving written notification under subparagraph (C) of any covered transaction, or pursuant to a unilateral notification initiated under subparagraph (D) with respect to any covered transaction, the President, acting through the Committee—
shall review the covered transaction to determine the effects of the transaction on the national security of the United States; and
shall consider the factors specified in subsection (f) for such purpose, as appropriate.
Control by foreign government
Written notice
In general
In general
Comments and acceptance
In general
Completeness
Stipulations required
Withdrawal of notice
Continuing discussions
Inclusion of partnership and side agreements
Declarations for certain covered transactions
In general
Regulations
Committee response to declaration
In general
Upon receiving a declaration under this clause with respect to a covered transaction, the Committee may, at the discretion of the Committee—
request that the parties to the transaction file a written notice under clause (i);
inform the parties to the transaction that the Committee is not able to complete action under this section with respect to the transaction on the basis of the declaration and that the parties may file a written notice under clause (i) to seek written notification from the Committee that the Committee has completed all action under this section with respect to the transaction;
initiate a unilateral review of the transaction under subparagraph (D); or
notify the parties in writing that the Committee has completed all action under this section with respect to the transaction.
Timing
Rule of construction
Mandatory declarations
Regulations
Certain covered transactions with foreign government interests
In general
Substantial interest defined
Waiver
Other declarations required by Committee
Exception
The submission of a declaration described in subclause (I) shall not be required pursuant to this subclause with respect to an investment by an investment fund if—
the fund is managed exclusively by a general partner, a managing member, or an equivalent;
the general partner, managing member, or equivalent is not a foreign person; and
the investment fund satisfies, with respect to any foreign person with membership as a limited partner on an advisory board or a committee of the fund, the criteria specified in items (cc) and (dd) of subsection (a)(4)(D)(iv).
Submission of written notice as an alternative
Timing and refiling of submission
In general
Refiling of declaration
Penalties
Stipulations regarding transactions
In general
In a written notice submitted under clause (i) or a declaration submitted under clause (v) with respect to a transaction, a party to the transaction may—
stipulate that the transaction is a covered transaction; and
if the party stipulates that the transaction is a covered transaction under item (aa), stipulate that the transaction is a foreign government-controlled transaction.
Basis for stipulation
Unilateral initiation of review
Subject to subparagraph (G), the President or the Committee may initiate a review under subparagraph (A) of—
any covered transaction (other than a covered transaction described in subparagraph (E));
any covered transaction described in subparagraph (E), if any party to the transaction submitted false or misleading material information to the Committee in connection with the Committee’s consideration of the transaction or omitted material information, including material documents, from information submitted to the Committee; or
any covered transaction described in subparagraph (E), if—
any party to the transaction or the entity resulting from consummation of the transaction materially breaches a mitigation agreement or condition described in subsection (l)(3)(A);
such breach is certified to the Committee by the lead department or agency monitoring and enforcing such agreement or condition as a material breach; and
the Committee determines that there are no other adequate and appropriate remedies or enforcement tools available to address such breach.
Covered transactions described
A covered transaction is described in this subparagraph if—
the Committee has informed the parties to the transaction in writing that the Committee has completed all action under this section with respect to the transaction; or
the President has announced a decision not to exercise the President’s authority under subsection (d) with respect to the transaction.
Timing
Limit on delegation of certain authority
Identification of non-notified and non-declared transactions
The Committee shall establish a process to identify covered transactions for which—
a notice under clause (i) of subparagraph (C) or a declaration under clause (v) of that subparagraph is not submitted to the Committee; and
information is reasonably available.
National security investigations
In general
Applicability
Subparagraph (A) shall apply in each case in which—
a review of a covered transaction under paragraph (1) results in a determination that—
the transaction threatens to impair the national security of the United States and the risk has not been mitigated during or prior to the review of a covered transaction under paragraph (1);
the transaction is a foreign government-controlled transaction; or
the transaction would result in control of any critical infrastructure of or within the United States by or on behalf of any foreign person, if the Committee determines that the transaction could impair national security, and that such impairment to national security has not been mitigated by assurances provided or renewed with the approval of the Committee, as described in subsection (l), during the review period under paragraph (1); or
the lead agency recommends, and the Committee concurs, that an investigation be undertaken.
Timing
In general
Extension for extraordinary circumstances
In general
Nondelegation
Notification to parties
Exception
In general
Nondelegation
Guidance on certain transactions with national security implications
Certifications to Congress
Certified notice at completion of review or assessment
Certified report at completion of investigation
Certification procedures
In general
Each certified notice and report required under subparagraphs (A) and (B), respectively, shall be submitted to the members of Congress specified in clause (iii), and shall include—
a description of the actions taken by the Committee with respect to the transaction;
a certification that all relevant national security factors have received full consideration; and
whether the transaction is described under clause (i), (ii), (iii), (iv), or (v) of subsection (a)(4)(B).
Content of certification
Members of Congress
Each certified notice and report required under subparagraphs (A) and (B), respectively, shall be transmitted—
to the Majority Leader and the Minority Leader of the Senate;
to the chair and ranking member of the Committee on Banking, Housing, and Urban Affairs of the Senate and of any committee of the Senate having oversight over the lead agency;
to the Speaker and the Minority Leader of the House of Representatives;
to the chair and ranking member of the Committee on Financial Services of the House of Representatives and of any committee of the House of Representatives having oversight over the lead agency; and
with respect to covered transactions involving critical infrastructure, to the members of the Senate from the State in which the principal place of business of the acquired United States person is located, and the member from the Congressional District in which such principal place of business is located.
Signatures; limit on delegation
In general
Delegation of certifications
In general
Limitation on delegation with respect to certain transactions
Authority to consolidate documents
Analysis by Director of National Intelligence
Analysis required
In general
Views of intelligence community
Updates
Independence and objectivity
Basic threat information
In general
Covered transaction described
A covered transaction is described in this clause if—
the transaction is described in subsection (a)(4)(B)(ii);
the Director of National Intelligence has completed an analysis pursuant to subparagraph (A) involving each foreign person that is a party to the transaction during the 12 months preceding the review or investigation of the transaction under this section; or
the transaction otherwise meets criteria agreed upon by the Committee and the Director for purposes of this subparagraph.
Timing
Interaction with intelligence community
Independent role of Director
Assessment of operational impact
Submission to Congress
Submission of additional information
Notice of results to parties
Regulations
Regulations prescribed under this section shall include standard procedures for—
submitting any notice of a covered transaction to the Committee;
submitting a request to withdraw a covered transaction from review;
resubmitting a notice of a covered transaction that was previously withdrawn from review; and
providing notice of the results of a review or investigation to the parties to the covered transaction, upon completion of all action under this section.
Tolling of deadlines during lapse in appropriations
Confidentiality of information
In general
Exceptions
Paragraph (1) shall not prohibit the disclosure of the following:
Information relevant to any administrative or judicial action or proceeding.
Information to Congress or any duly authorized committee or subcommittee of Congress.
Information important to the national security analysis or actions of the Committee to any domestic governmental entity, or to any foreign governmental entity of a United States ally or partner, under the exclusive direction and authorization of the chairperson, only to the extent necessary for national security purposes, and subject to appropriate confidentiality and classification requirements.
Information that the parties have consented to be disclosed to third parties.
Cooperation with allies and partners
In general
Requirements
The process established under subparagraph (A) should, in the discretion of the chairperson—
be designed to facilitate the harmonization of action with respect to trends in investment and technology that could pose risks to the national security of the United States and countries that are allies or partners of the United States;
provide for the sharing of information with respect to specific technologies and entities acquiring such technologies as appropriate to ensure national security; and
include consultations and meetings with representatives of the governments of such countries on a recurring basis.
Action by the President
In general
Announcement by the President
The President shall announce the decision on whether or not to take action pursuant to paragraph (1) with respect to a covered transaction not later than 15 days after the earlier of—
the date on which the investigation of the transaction under subsection (b) is completed; or
the date on which the Committee otherwise refers the transaction to the President under subsection (l)(2).
Enforcement
Findings of the President
The President may exercise the authority conferred by paragraph (1), only if the President finds that—
there is credible evidence that leads the President to believe that a foreign person that would acquire an interest in a United States business or its assets as a result of the covered transaction might take action that threatens to impair the national security; and
provisions of law, other than this section and the International Emergency Economic Powers Act [50 U.S.C. 1701 et seq.], do not, in the judgment of the President, provide adequate and appropriate authority for the President to protect the national security in the matter before the President.
Factors to be considered
Actions and findings nonreviewable
In general
Civil actions
Procedures for review of privileged information
Applicability of use of information provisions
Factors to be considered
For purposes of this section, the President or the President’s designee may, taking into account the requirements of national security, consider—
domestic production needed for projected national defense requirements,
the capability and capacity of domestic industries to meet national defense requirements, including the availability of human resources, products, technology, materials, and other supplies and services,
the control of domestic industries and commercial activity by foreign citizens as it affects the capability and capacity of the United States to meet the requirements of national security,
the potential effects of the proposed or pending transaction on sales of military goods, equipment, or technology to any country—
identified by the Secretary of State—
under section 4605(j) 1
under section 4605(l) 1 of this title, as a country of concern regarding missile proliferation; or
under section 4605(m) 1 of this title, as a country of concern regarding the proliferation of chemical and biological weapons;
identified by the Secretary of Defense as posing a potential regional military threat to the interests of the United States; or
listed under section 2139a(c) of title 42 on the “Nuclear Non-Proliferation-Special Country List” (15 C.F.R. Part 778, Supplement No. 4) or any successor list;
the potential effects of the proposed or pending transaction on United States international technological leadership in areas affecting United States national security;
the potential national security-related effects on United States critical infrastructure, including major energy assets;
the potential national security-related effects on United States critical technologies;
whether the covered transaction is a foreign government-controlled transaction, as determined under subsection (b)(1)(B);
as appropriate, and particularly with respect to transactions requiring an investigation under subsection (b)(1)(B), a review of the current assessment of—
the adherence of the subject country to nonproliferation control regimes, including treaties and multilateral supply guidelines, which shall draw on, but not be limited to, the annual report on “Adherence to and Compliance with Arms Control, Nonproliferation and Disarmament Agreements and Commitments” required by section 2593a of title 22;
the relationship of such country with the United States, specifically on its record on cooperating in counter-terrorism efforts, which shall draw on, but not be limited to, the report of the President to Congress under section 7120 of the Intelligence Reform and Terrorism Prevention Act of 2004; and
the potential for transshipment or diversion of technologies with military applications, including an analysis of national export control laws and regulations;
the long-term projection of United States requirements for sources of energy and other critical resources and material; and
such other factors as the President or the Committee may determine to be appropriate, generally or in connection with a specific review or investigation.
Additional information to Congress; confidentiality
Briefing requirement on request
Application of confidentiality provisions
In general
Proprietary information
Regulations
In general
Content
Regulations issued under this subsection shall—
provide for the imposition of civil penalties for any violation of this section, including any mitigation agreement entered into, conditions imposed, or order issued pursuant to this section;
to the extent possible—
minimize paperwork burdens; and
coordinate reporting requirements under this section with reporting requirements under any other provision of Federal law;
provide for an appropriate role for the Secretary of Labor with respect to mitigation agreements; and
provide that, in any review or investigation of a covered transaction conducted by the Committee under subsection (b), the Committee should—
consider the factors specified in subsection (f); and
as appropriate, require parties to provide to the Committee the information necessary to consider such factors.
Effect on other law
Technology risk assessments
Committee on Foreign Investment in the United States
Establishment
Membership
The Committee shall be comprised of the following members or the designee of any such member:
The Secretary of the Treasury.
The Secretary of Homeland Security.
The Secretary of Commerce.
The Secretary of Defense.
The Secretary of State.
The Attorney General of the United States.
The Secretary of Energy.
The Secretary of Labor (nonvoting, ex officio).
The Director of National Intelligence (nonvoting, ex officio).
The heads of any other executive department, agency, or office, as the President determines appropriate, generally or on a case-by-case basis.
Chairperson
Hiring authority
Senior officials
In general
Department of the Treasury
In general
Assistant Secretary for Investment Security
Special hiring authority
Designation of lead agency
The Secretary of the Treasury shall designate, as appropriate, a member or members of the Committee to be the lead agency or agencies on behalf of the Committee—
for each covered transaction, and for negotiating any mitigation agreements or other conditions necessary to protect national security; and
for all matters related to the monitoring of the completed transaction, to ensure compliance with such agreements or conditions and with this section.
Other members
Meetings
Actions by the Committee to address national security risks
Suspension of transactions
Referral to President
Mitigation
Agreements and conditions
In general
Abandonment of transactions
Agreements and conditions relating to completed transactions
Treatment of outdated agreements or conditions
Limitations
An agreement may not be entered into or condition imposed under subparagraph (A) with respect to a covered transaction unless the Committee determines that the agreement or condition resolves the national security concerns posed by the transaction, taking into consideration whether the agreement or condition is reasonably calculated to—
be effective;
allow for compliance with the terms of the agreement or condition in an appropriately verifiable way; and
enable effective monitoring of compliance with and enforcement of the terms of the agreement or condition.
Jurisdiction
Risk-based analysis required
In general
Actions of members of the Committee
In general
Failure to reach consensus
If the Committee fails to reach consensus with respect to a recommendation under clause (i) regarding a covered transaction, the members of the Committee who support an alternative recommendation shall produce—
a written statement justifying the alternative recommendation; and
as appropriate, a risk-based analysis that supports the alternative recommendation.
Definitions
Tracking authority for withdrawn notices
In general
If any written notice of a covered transaction that was submitted to the Committee under this section is withdrawn before any review or investigation by the Committee under subsection (b) is completed, the Committee shall establish, as appropriate—
interim protections to address specific concerns with such transaction that have been raised in connection with any such review or investigation pending any resubmission of any written notice under this section with respect to such transaction and further action by the President under this section;
specific time frames for resubmitting any such written notice; and
a process for tracking any actions that may be taken by any party to the transaction, in connection with the transaction, before the notice referred to in clause (ii) is resubmitted.
Designation of agency
Negotiation, modification, monitoring, and enforcement
Designation of lead agency
Reporting by designated agency
The lead agency in connection with any agreement entered into or condition imposed with respect to a covered transaction shall—
provide periodic reports to the Committee on any material modification to any such agreement or condition imposed with respect to the transaction; and
ensure that any material modification to any such agreement or condition is reported to the Director of National Intelligence, the Attorney General of the United States, and any other Federal department or agency that may have a material interest in such modification.
Compliance plans
In general
Elements
Each plan required by clause (i) with respect to an agreement entered into under paragraph (3)(A) shall include an explanation of—
which member of the Committee will have primary responsibility for monitoring compliance with the agreement;
how compliance with the agreement will be monitored;
how frequently compliance reviews will be conducted;
whether an independent entity will be utilized under subparagraph (E) to conduct compliance reviews; and
what actions will be taken if the parties fail to cooperate regarding monitoring compliance with the agreement.
Effect of lack of compliance
If, at any time after a mitigation agreement or condition is entered into or imposed under paragraph (3)(A), the Committee or lead agency, as the case may be, determines that a party or parties to the agreement or condition are not in compliance with the terms of the agreement or condition, the Committee or lead agency may, in addition to the authority of the Committee to impose penalties pursuant to subsection (h)(3) and to unilaterally initiate a review of any covered transaction under subsection (b)(1)(D)(iii)—
negotiate a plan of action for the party or parties to remediate the lack of compliance, with failure to abide by the plan or otherwise remediate the lack of compliance serving as the basis for the Committee to find a material breach of the agreement or condition;
require that the party or parties submit a written notice under clause (i) of subsection (b)(1)(C) or a declaration under clause (v) of that subsection with respect to a covered transaction initiated after the date of the determination of noncompliance and before the date that is 5 years after the date of the determination to the Committee to initiate a review of the transaction under subsection (b); or
seek injunctive relief.
Use of independent entities to monitor compliance
Successors and assigns
Additional compliance measures
Annual report to Congress
In general
Contents of report relating to covered transactions
The annual report under paragraph (1) shall contain the following information, with respect to each covered transaction, for the reporting period:
A list of all notices filed and all reviews or investigations of covered transactions completed during the period, with—
a description of the outcome of each review or investigation, including whether an agreement was entered into or condition was imposed under subsection (l)(3)(A) with respect to the transaction being reviewed or investigated, and whether the President took any action under this section with respect to that transaction;
basic information on each party to each such transaction;
the nature of the business activities or products of the United States business with which the transaction was entered into or intended to be entered into; and
information about any withdrawal from the process.
Specific, cumulative, and, as appropriate, trend information on the numbers of filings, investigations, withdrawals, and decisions or actions by the President under this section.
Cumulative and, as appropriate, trend information on the business sectors involved in the filings which have been made, and the countries from which the investments have originated.
Information on whether companies that withdrew notices to the Committee in accordance with subsection (b)(1)(C)(ii) have later refiled such notices, or, alternatively, abandoned the transaction.
The types of security arrangements and conditions the Committee has used to mitigate national security concerns about a transaction, including a discussion of the methods that the Committee and any lead agency are using to determine compliance with such arrangements or conditions.
A detailed discussion of all perceived adverse effects of covered transactions on the national security or critical infrastructure of the United States that the Committee will take into account in its deliberations during the period before delivery of the next report, to the extent possible.
Statistics on compliance plans conducted and actions taken by the Committee under subsection (l)(6), including subparagraph (D) of that subsection, during that period, a general assessment of the compliance of parties with agreements entered into and conditions imposed under subsection (l)(3)(A) that are in effect during that period, including a description of any actions taken by the Committee to impose penalties or initiate a unilateral review pursuant to subsection (b)(1)(D)(iii), and any recommendations for improving the enforcement of such agreements and conditions.
Cumulative and, as appropriate, trend information on the number of declarations filed under subsection (b)(1)(C)(v), the actions taken by the Committee in response to those declarations, the business sectors involved in those declarations, and the countries involved in those declarations.
A description of—
the methods used by the Committee to identify non-notified and non-declared transactions under subsection (b)(1)(H);
potential methods to improve such identification and the resources required to do so; and
the number of transactions identified through the process established under that subsection during the reporting period and the number of such transactions flagged for further review.
A summary of the hiring practices and policies of the Committee pursuant to subsection (k)(4).
A list of the waivers granted by the Committee under subsection (b)(1)(C)(v)(IV)(bb)(CC).
Information on whether the most recent list of sites identified under subsection (a)(4)(C)(iii) reflects consideration of any recommended updates and revisions submitted under subclause (II) of that subsection. Upon request from the Committee on Financial Services of the House of Representatives or the Committee on Banking, Housing, and Urban Affairs of the Senate, the Committee shall provide to that committee a classified briefing regarding that list.
Contents of report relating to critical technologies
In order to assist Congress in its oversight responsibilities with respect to this section, the President and such agencies as the President shall designate shall include in the annual report submitted under paragraph (1)—
an evaluation of whether there is credible evidence of a coordinated strategy by 1 or more countries or companies to acquire United States companies involved in research, development, or production of critical technologies for which the United States is a leading producer;
an evaluation of whether there are industrial espionage activities directed or directly assisted by foreign governments against private United States companies aimed at obtaining commercial secrets related to critical technologies; and
a description of the technologies recommended by the chairperson under subsection (a)(6)(B) for identification under the interagency process set forth in section 4817(a) of this title.
Form of report
In general
Inclusion in classified version
Inclusions in unclassified version
The unclassified version of the report required under paragraph (1) shall include, with respect to covered transactions for the reporting period—
the number of notices submitted under subsection (b)(1)(C)(i);
the number of declarations submitted under subsection (b)(1)(C)(v) and the number of such declarations that were required under subclause (IV) of that subsection;
the number of declarations submitted under subsection (b)(1)(C)(v) for which the Committee required resubmission as notices under subsection (b)(1)(C)(i);
the average number of days that elapsed between submission of a declaration under subsection (b)(1)(C)(v) and the acceptance of the declaration by the Committee;
the median and average number of days that elapsed between acceptance of a declaration by the Committee and a response described in subsection (b)(1)(C)(v)(III);
information on the time it took the Committee to provide comments on, or to accept, notices submitted under subsection (b)(1)(C)(i), including—
the average number of business days that elapsed between the date of submission of a draft notice and the date on which the Committee provided written comments on the draft notice;
the average number of business days that elapsed between the date of submission of a formal written notice and the date on which the Committee accepted or provided written comments on the formal written notice; and
if the average number of business days for a response by the Committee reported under subclause (I) or (II) exceeded 10 business days—
an explanation of the causes of such delays, including whether such delays are caused by resource shortages, unusual fluctuations in the volume of notices, transaction characteristics, or other factors; and
an explanation of the steps that the Committee anticipates taking to mitigate the causes of such delays and otherwise to improve the ability of the Committee to provide comments on, or to accept, notices within 10 business days;
the number of reviews or investigations conducted under subsection (b);
the number of investigations that were subject to an extension under subsection (b)(2)(C)(ii);
information on the duration of those reviews and investigations, including the median and average number of days required to complete those reviews and investigations;
the number of notices submitted under subsection (b)(1)(C)(i) and declarations submitted under subsection (b)(1)(C)(v) that were rejected by the Committee;
the number of such notices and declarations that were withdrawn by a party to the covered transaction;
the number of such withdrawals that were followed by the submission of a subsequent such notice or declaration relating to a substantially similar covered transaction; and
such other specific, cumulative, or trend information that the Committee determines is advisable to provide for an assessment of the time required for reviews and investigations of covered transactions under this section.
Certification of notices and assurances
In general
Each notice, and any followup information, submitted under this section and regulations prescribed under this section to the President or the Committee by a party to a covered transaction, and any information submitted by any such party in connection with any action for which a report is required pursuant to paragraph (6)(B) of subsection (l), with respect to the implementation of any mitigation agreement or condition described in paragraph (3)(A) of subsection (l), or any material change in circumstances, shall be accompanied by a written statement by the chief executive officer or the designee of the person required to submit such notice or information certifying that, to the best of the knowledge and belief of that person—
the notice or information submitted fully complies with the requirements of this section or such regulation, agreement, or condition; and
the notice or information is accurate and complete in all material respects.
Effect of failure to submit
The Committee may not complete a review under this section of a covered transaction and may recommend to the President that the President suspend or prohibit the transaction under subsection (d) if the Committee determines that a party to the transaction has—
failed to submit a statement required by paragraph (1); or
included false or misleading information in a notice or information described in paragraph (1) or omitted material information from such notice or information.
Applicability of law on fraud and false statements
Testimony
In general
Not later than March 31 of each year, the chairperson, or the designee of the chairperson, shall appear before the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate to present testimony on—
anticipated resources necessary for operations of the Committee in the following fiscal year at each of the departments or agencies represented on the Committee;
the adequacy of appropriations for the Committee in the current and the previous fiscal year to—
ensure that thorough reviews and investigations are completed as expeditiously as possible;
monitor and enforce mitigation agreements; and
identify covered transactions for which a notice under clause (i) of subsection (b)(1)(C) or a declaration under clause (v) of that subsection was not submitted to the Committee;
management efforts to strengthen the ability of the Committee to meet the requirements of this section; and
activities of the Committee undertaken in order to—
educate the business community, with a particular focus on the technology sector and other sectors of importance to national security, on the goals and operations of the Committee;
disseminate to the governments of countries that are allies or partners of the United States best practices of the Committee that—
strengthen national security reviews of relevant investment transactions; and
expedite such reviews when appropriate; and
promote openness to foreign investment, consistent with national security considerations.
Sunset
Funding
Establishment of Fund
Authorization of appropriations for the Committee
Filing fees
In general
Determination of amount of fee
In general
The amount of the fee to be assessed under subparagraph (A) with respect to a covered transaction—
may not exceed an amount equal to the lesser of—
1 percent of the value of the transaction; or
$300,000, adjusted annually for inflation pursuant to regulations prescribed by the Committee; and
shall be based on the value of the transaction, taking into account—
the effect of the fee on small business concerns (as defined in section 632 of title 15);
the expenses of the Committee associated with conducting activities under this section;
the effect of the fee on foreign investment; and
such other matters as the Committee considers appropriate.
Updates
Deposit and availability of fees
Notwithstanding section 3302 of title 31, fees collected under subparagraph (A) shall—
be deposited into the Fund solely for use in carrying out activities under this section;
to the extent and in the amounts provided in advance in appropriations Acts, be available to the chairperson;
remain available until expended; and
be in addition to any appropriations made available to the members of the Committee.
Study on prioritization fee
In general
Submission to Congress
Transfer of funds
Centralization of certain Committee functions
In general
Functions
Rule of construction
Source
(Sept. 8, 1950, ch. 932, title VII, § 721, as added Pub. L. 100–418, title V, § 5021,Notes
Editorial Notes
References in Text
Codification
Amendments
Statutory Notes and Related Subsidiaries
Effective Date of 2018 Amendment
Immediate Applicability of Certain Provisions.—
The following shall take effect on the date of the enactment of this Act [
Sections 1705, 1707, 1708, 1709, 1710, 1713, 1714, 1715, 1716, 1717, 1718, 1720, 1721, 1722, 1723, 1724, and 1725 [amending this section and enacting provisions set out as a note under this section] and any amendments made by those sections.
Section 1712 [amending this section] and the amendments made by that section (except for clause (iii) of section 721(b)(4)(A) of the Defense Production Act of 1950 [50 U.S.C. 4565(b)(4)(A)], as added by section 1712).
Paragraphs (1), (2), (3), (4)(A)(i), (4)(B)(i), (4)(B)(iv)(I), (4)(B)(v), (4)(F), (5), (6), (7), (8), (9), (10), (11), (12), and (13) of subsection (a) of section 721 of the Defense Production Act of 1950 [50 U.S.C. 4565], as amended by section 1703.
Section 721(m)(4) of the Defense Production Act of 1950 [50 U.S.C. 4565(m)(4)], as amended by section 1719 (except for clauses (ii), (iii), (iv), and (v) of subparagraph (C) of that section).
Delayed Applicability of Certain Provisions.—
In general.—
Any provision of or amendment made by this subtitle [subtitle A (§§ 1701–1728) of title XVII of div. A of Pub. L. 115–232, amending this section and enacting provisions set out as notes under this section and section 4501 of this title] not specified in subsection (a) shall—
take effect on the earlier of—
the date that is 18 months after the date of the enactment of this Act [
the date that is 30 days after publication in the Federal Register of a determination by the chairperson of the Committee on Foreign Investment in the United States that the regulations, organizational structure, personnel, and other resources necessary to administer the new provisions are in place; and
apply with respect to any covered transaction the review or investigation of which is initiated under section 721 of the Defense Production Act of 1950 [50 U.S.C. 4565] on or after the date described in subparagraph (A).
Nondelegation of determination.—
The determination of the chairperson of the Committee on Foreign Investment in the United States under paragraph (1)(A) may not be delegated.”
Effective Date of 2007 Amendment
Effective Date of 1992 Amendment
Severability
Findings regarding Foreign Investment Risk Review
According to a February 2016 report by the International Trade Administration of the Department of Commerce, 12,000,000 United States workers, equivalent to 8.5 percent of the labor force, have jobs resulting from foreign investment, including 3,500,000 jobs in the manufacturing sector alone.
In 2016, new foreign direct investment in United States manufacturing totaled $129,400,000,000.
The Bureau of Economic Analysis of the Department of Commerce concluded that, in 2015—
foreign-owned affiliates in the United States—
contributed $894,500,000,000 in value added to the United States economy;
exported goods valued at $352,800,000,000, accounting for nearly a quarter of total exports of goods from the United States; and
undertook $56,700,000,000 in research and development; and
the 7 countries investing the most in the United States, all of which are United States allies (the United Kingdom, Japan, Germany, France, Canada, Switzerland, and the Netherlands) accounted for 72.1 percent of the value added by foreign-owned affiliates in the United States and more than 80 percent of research and development expenditures by such entities.
According to the Government Accountability Office, from 2011 to 2016, the number of transactions reviewed by the Committee on Foreign Investment in the United States (commonly referred to as ‘CFIUS’) grew by 55 percent, while the staff of the Committees assigned to the reviews increased by 11 percent.
According to a February 2018 report of the Government Accountability Office on the Committee on Foreign Investment in the United States (GAO–18–249): ‘Officials from Treasury and other member agencies are aware of pressures on their CFIUS staff given the current workload and have expressed concerns about possible workload increases.’. The Government Accountability Office concluded: ‘Without attaining an understanding of the staffing levels needed to address the current and future CFIUS workload, particularly if legislative changes to CFIUS’s authorities further expand its workload, CFIUS may be limited in its ability to fulfill its objectives and address threats to the national security of the United States.’.
On
Procedures for Recusal of Members of Committee for Conflicts of Interest
establish procedures for the recusal of any member of the Committee that has a conflict of interest with respect to a covered transaction (as defined in section 721(a) of the Defense Production Act of 1950 [50 U.S.C. 4565(a)], as amended by section 1703);
submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report describing those procedures; and
brief the committees specified in paragraph (1) on the report required by paragraph (2).”
Implementation of 2018 Amendment
In General.—
Not later than 180 days after the date of the enactment of this Act [
develop plans to implement this subtitle [subtitle A (§§ 1701–1728) of title XVII of div. A of Pub. L. 115–232, amending this section and enacting provisions set out as notes under this section and section 4501 of this title]; and
submit to the appropriate congressional committees a report on the plans developed under paragraph (1), which shall include a description of—
the timeline and process to implement the provisions of, and amendments made by, this subtitle;
any additional staff necessary to implement the plans; and
the resources required to effectively implement the plans.
Annual Resource Needs of CFIUS Member Agencies.—
Not later than one year after the submission of the report under subsection (a)(2), and annually thereafter for 7 years, each department or agency represented on the Committee on Foreign Investment in the United States shall submit to the appropriate congressional committees a detailed spending plan to expeditiously meet the requirements of section 721 of the Defense Production Act of 1950 [50 U.S.C. 4565], as amended by this subtitle, including estimated expenditures and staffing levels for not less than the following fiscal year.
Testimony.—
Appropriate Congressional Committees Defined.—
In this section, the term ‘appropriate congressional committees’ means—
the Committee on Banking, Housing, and Urban Affairs and the Committee on Appropriations of the Senate; and
the Committee on Financial Services and the Committee on Appropriations of the House of Representatives.”
Assessment of Need for Additional Resources for Committee
determine whether and to what extent the expansion of the responsibilities of the Committee on Foreign Investment in the United States pursuant to the amendments made by this subtitle [subtitle A (§§ 1701–1728) of title XVII of div. A of Pub. L. 115–232, amending this section] necessitates additional resources for the Committee and the departments and agencies represented on the Committee to perform their functions under section 721 of the Defense Production Act of 1950 [50 U.S.C. 4565], as amended by this subtitle; and
if the President determines that additional resources are necessary, include in the budget of the President for fiscal year 2019 and each fiscal year thereafter submitted to Congress under section 1105(a) of title 31, United States Code, a request for such additional resources.”
Authorization for Pilot Programs
In general.—
Beginning on the date of the enactment of this Act [
Publication in federal register.—
A pilot program under paragraph (1) may not commence until the date that is 30 days after publication in the Federal Register of a determination by the chairperson of the Committee of the scope of and procedures for the pilot program. That determination may not be delegated.”
Study and Report on Foreign Direct Investments in United States
Study required.—
Before the end of the 120-day period beginning on the date of enactment of this Act [
foreign governments, entities controlled by or acting on behalf of a foreign government, or persons of foreign countries which comply with any boycott of Israel; or
foreign governments, entities controlled by or acting on behalf of a foreign government, or persons of foreign countries which do not ban organizations designated by the Secretary of State as foreign terrorist organizations.
Report.—
Before the end of the 30-day period beginning upon the date of completion of each study under paragraph (1), and thereafter in each annual report under section 721(m) of the Defense Production Act of 1950 [50 U.S.C. 4565(m)] (as added by this section), the Secretary of the Treasury shall submit a report to Congress, for transmittal to all appropriate committees of the Senate and the House of Representatives, containing the findings and conclusions of the Secretary with respect to the study described in paragraph (1), together with an analysis of the effects of such investment on the national security of the United States and on any efforts to address those effects.”