Legislation expanding the power of U.S. regulators to review, and even block, foreign investment deals that could pose a national security risk was passed 400-2 by the House on Tuesday.
The Foreign Investment Risk Review Modernization Act broadens the scope of transactions subject to review by the Committee on Foreign Investment in the United States, an interagency committee that advises the president on whether to block such deals. The proposed law would allow CFIUS to also review joint ventures and other transactions involving contributions of U.S. intellectual property, U.S. real estate transactions and other investments in U.S. technology or infrastructure companies.
The bill also clarifies terms involving critical technologies and infrastructure to give U.S. businesses and foreign investors legal and regulatory certainty.
Financial Services Committee Chairman Jeb Hensarling, R-Texas, said during floor debate that the reforms address transactions and countries, including China, "that truly present a national security risk, but without giving bureaucrats free rein to strangle the investment and innovation that makes our country strong to begin with."
Ranking committee member Maxine Waters, D-Calif., said during the debate that the bill addresses "growing concerns that foreign entities may be using acquisitions of, and partnerships with, U.S. businesses to chip away at American technological leadership."
A companion bill sponsored by Senate Majority Whip John Cornyn, R-Texas, has been approved by the Senate Banking Committee and is awaiting floor action.