Washington—Senator Dianne Feinstein (D-Calif.) today joined a group of senators to introduce the Foreign Investment Risk Review Modernization Act (FIRRMA) to modernize and strengthen the process by which the Committee on Foreign Investment in the United States (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks.
“This bill focuses on providing CFIUS with updated tools to address present and future security needs,” Sen. Feinstein said. “Senator Cornyn and I have been working on this bill for the last eight months, and we hope to build on the progress we’ve already made to update CFIUS and address national security threats.”
“By exploiting gaps in the existing CFIUS review process, potential adversaries, such as China, have been effectively degrading our country’s military technological edge by acquiring, and otherwise investing in, U.S. companies,” Sen. Cornyn said. “This undermines our national security and highlights the imperative of modernizing the CFIUS review process to address 21st century threats. This bill takes a measured approach by providing long overdue reforms to better protect our country, while also working to ensure that beneficial foreign investment is not chilled.”
“The CFIUS process is key to proactively identifying and mitigating foreign efforts to acquire critical U.S. technology and know-how through investment,” Sen. Burr said. “I am pleased to cosponsor this much needed legislation that will strengthen CFIUS by expanding its jurisdiction and modernize its processes.”
In addition to Feinstein, Cornyn and Burr, the bill was cosponsored by Senators Marco Rubio (R-Fla.), Amy Klobuchar (D-Minn.), John Barrasso (R-Wyo.), Gary Peters (D-Mich.), James Lankford (R-Okla.), Joe Manchin (D-W.V.) and Tim Scott (R-S.C.). The House bill, introduced by Rep. Robert Pittenger (R-N.C.), is cosponsored by Representatives Denny Heck (D-Wash.), Devin Nunes (R-Calif.), Chris Smith (R-N.J.), Dave Loebsack (D-Iowa), Sam Johnson (R-Texas) and John Culberson (R-Texas).
The Committee on Foreign Investment in the United States (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 their investment in U.S. companies and transfer sensitive dual-use U.S. technologies, many of which have potential military applications.
These investment-driven technology transfers have jeopardized the United States’ ability to maintain our historical military advantage and have, in turn, weakened our defense industrial base.
The Foreign Investment Risk Review Modernization Act would update the CFIUS review process to address 21st century national security concerns, like investment-driven technology transfers designed to sidestep the committee’s limited jurisdiction.
Specifically, the bill would:
- Expand the CFIUS jurisdiction to include certain joint ventures, minority position investments, and real estate transactions near military bases or other sensitive national security facilities.
- Update the Committee’s definition of “critical technologies” to include emerging technologies that could be essential for maintaining the U.S. technological advantage over countries that pose threats, such as China.
- Allow foreign investors to submit “light filings” to CFIUS for certain types of transactions.
- Add new national security factors for CFIUS to consider in its analyses.
- Authorizes CFIUS to exempt certain otherwise covered transactions if all foreign investors are from a country that meets certain criteria, such as being a U.S. treaty ally and having a mutual investment security arrangement.