U.S. – House FSC Foreign Investment Hearing

U.S. – House FSC Foreign Investment Hearing

On 13 September 2023, House FSC chair on investment oversight and US security.

  • House chair McHenry remarked on CFIUS oversight and national security, FSC hearing.
  • US Treasury published Assistant secretary for investment security Paul Rosen remarks.
  • Follows House September 2023 notice of hearing scheduled for September 2023.

Hearing Overview

  • House FSC hearing entitled Oversight of Committee on Foreign Investment in United States (CFIUS) and Other Efforts to Strengthen National Security in the United States.
  • CFIUS reviews certain foreign investments and real estate purchases relating to national security risks, while upholding US commitment to an open investment climate.
  • CFIUS jurisdiction extended to include certain non-controlling investments by foreign persons involving critical technologies/infrastructure, sensitive data of US citizens.
  • Reviews real estate purchases/leases by foreign persons close to US government sites.

Chair McHenry Remarks

  • Hearing purpose is to conduct oversight of CFIUS, efforts to improve national security.
  • CFIUS has dual mandate which is to address national security risks in foreign investments and maintain the US commitment to an open investment climate.
  • Five years ago, Congress extended CFIUS jurisdiction to certain non-controlling investments, as well as real estate transactions near sensitive government sites.
  • Reforms made under Foreign Investment Risk Review Modernization Act (FIRRMA) recognized that outside investor may pose risk to country receiving investment.
  • Biden administration is now proposing to use CFIUS to regulate Americans’ investments into China; Congress dismissed this idea, and for good reason.
  • Premise of an outbound CFIUS has lacked basic facts necessary to warrant such move.
  • In May 2023, sent letter to Secretary Yellen asking for the data to justify outbound restrictions; questions were not answered because there is no data to begin with.
  • Need clear rules of road and action based in data/facts, not political gamesmanship.
  • To outcompete China, US cannot become more like the Chinese Communist Party.

Rosen Remarks

  • US Treasury focused on national security implications of outbound US investments.
  • Cited EO 14105, under which his office will implement new program.
  • Program will require US persons to notify US Treasury of certain transactions.
  • Also, prohibit US persons from undertaking certain other transactions in countries of concern in areas of seimiconductors, microelectronic, quantum information technology.
  • Also, certain AI systems; program to be administered separately from CUFUS.