Cornyn Bill to Modernize CFIUS Review Process Heads to President’s Desk

Texas Insider Report: WASHINGTON, D.C. –U.S. Senator John Cornyn (R-TX) released the following statement after the Senate passed the Foreign Investment Risk Review Modernization Act (FIRRMA) as a part of the conference report to the Fiscal Year 2019 National Defense Authorization Act:

“We cannot continue to let bad actors, like China, erode our national security advantage by circumventing our laws,” said Sen. Cornyn. “FIRRMA takes a narrowly-tailored approach to address these national security risks without chilling foreign investment or restricting our ability to engage in trade. This bill will modernize the process and help put an end to the backdoor transfer of dual-use technology that has gone unchecked for too long.

“I applaud the conference committee for preserving a strong version of this bill that so closely mirrors what was passed in the Senate. Without the support and leadership of Chairman Crapo, Senator Inhofe, and Chairman Thornberry this wouldn’t have been possible.”

Background:

Provisions in the final agreement of FIRRMA strongly reflect the Senate’s version of the bill, which was supported by the Administration:

  • It maintains the expansion of CFIUS jurisdiction to cover minority investments, any change in a foreign investor’s rights regarding a U.S. business, any vehicle designed to evade CFIUS, and the purchase, lease, or concession of certain real-estate by or to a foreign person.
  • Importantly, the final text retains the ability of CFIUS to review non-controlling, non-passive investments, especially those involving critical technology, critical infrastructure, and exposure of sensitive personal data.
  • It also maintains the changes to export control laws which address concerns about the transfer of technology through joint ventures and other arrangements, and it strengthens enforcement of export controls.
  • The final text allows the Committee to recommend technologies to the interagency process developed in the bill in order to identify emerging and critical technologies, and sets reporting requirements on these recommendations.
  • Further, it maintains mandatory declarations for transactions where a foreign government has a substantial interest and retains the Committee’s full discretion to craft mandatory declarations where a business involved in critical technology is a party to the transaction

Senator Cornyn and Senator Dianne Feinstein (D-CA) originally introduced the Foreign Investment Risk Review Modernization Act (FIRRMA) to update and strengthen the Committee on Foreign Investment in the United States (CFIUS) review process to address 21st century national security concerns. CFIUS is an interagency committee tasked with reviewing foreign investments in the U.S. and determining whether or not such investments pose a risk to national security. The CFIUS review process has not been modernized in nearly a decade, and gaps in the current process have allowed foreign adversaries to weaponize investment in U.S. companies and transfer sensitive dual-use U.S. technologies, which jeopardizes our historical military advantage and weakens our defense industrial base.

Senator John Cornyn, a Republican from Texas, is a member of the Senate Judiciary, Intelligence, and Finance Committees.

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Source: Texas Politics

Cornyn Bill to Modernize CFIUS Review Process Heads to President’s Desk

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