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Foreign Investment, CFIUS, and Homeland Security: An Overview
Title: Foreign Investment, CFIUS, and Homeland Security: An Overview
Date: April 17, 2008
Author: James K. Jackson
Institution: Congressional Research Service
Bibliographic Entry: Jackson, James K. “Foreign Investment, CFIUS, and Homeland Security: An Overview.” April 17, 2008. Congressional Research Service. http://assets.opencrs.com/rpts/RS22863_20080417.pdf (Accessed May 28, 2008).
Electronic Link: http://assets.opencrs.com/rpts/RS22863_20080417.pdf
Key Words: foreign direct investment, FDI, CFIUS (Committee on Foreign Investment in the United States), economic implications, critical infrastructure, Exon-Florio statute, Foreign Investment and National Security Act of 2007, USA Patriot Act of 2001, Homeland Security Act of 2002
Summary of Key Points, Issues, Conclusions:
This report provides an overview of foreign direct investment within the US vis-à-vis homeland security. The US has followed an open-door policy in regard to foreign investment but has begun to question the wisdom of such a policy following September 11th. The attempt by Dubai Ports World to purchase various ports in the US served as a reminder to policymakers of the dual nature of foreign investment. Investments made from abroad not only have economic implications within the US, but also have the potential to undermine national security if key assets within the US are controlled by a foreign business entity.
The Committee on Foreign Investment in the United States (CFIUS) is the means by which the President can ensure the investigation and review of foreign investment to assess the implications of such investments on national security. The Exon-Florio statute further enhanced the ability of the President to intervene and regulate foreign investment when national security was a concern.
The report acknowledges that the power to regulate foreign direct investment is held by both the President and Congress and that recently legislation (USA Patriot Act of 2001, Homeland Security Act of 2002, and the Foreign Investment and National Security Act of 2007) has been passed to allow the US to exercise greater control over foreign investment to safeguard national security assets and protect critical infrastructure. Disagreements between the Administration and Congress still persist over the ability of the US to regulate foreign investment when national security is of concern. The main areas of disagreement outlined in the report involve how national security is defined, what constitutes foreign control, and which economic activities fall under the review of CFIUS.
Name of Researcher: Nathan Brown
Institution: Integrative Center for Homeland Security, Texas A&M University
Date Posted: May 29, 2008