On Tuesday, the US government highlighted more detail on its plans to beef up foreign investment oversight. The plan also includes a proposal to permit the blocking of some foreign investment of real estate within 100 miles of military bases.

To extend the powers of the Committee on Foreign Investment in the United States (CFIUS), the US Treasury is laying out proposed rules. CFIUS has increasingly flexed its muscles against Chinese companies. 

Last year, laws passed which gave CFIUS the power to review foreign investment in critical technologies, infrastructure and sensitive personal data – even when a buyer is not seeking a controlling stake in a US firm.

The proposals on Tuesday include allowing CFIUS to examine bids by foreigners to purchase property located within 1 to 100 miles of a military installation or sensitive government facilities. Another proposal suggests that a mandatory filing requirement would be triggered when foreign governments had at least a 49 per cent stake in the companies seeking to invest in the United States.

Chinese investment has already slowed down dramatically in the US by the intervention of CFIUS after Beijing and Washington remained locked in a heated trade war and technology dispute. 

A pilot program came into effect in the need of mandatory filings in October for foreign companies seeking stakes in U.S. firms in 27 key industries including telecommunications and semiconductors.

A Treasury official said, “The United State remains open for business but not at the risk of national security.” 

“To the extent that a transaction poses a risk, it is something that we want to look at,” he added.

A Washington based lawyer, Mark Plotkin said the rules showed regulatory restraint. He also showed that many CFIUS watchers had expected the threshold for mandatory filing to be well below the proposed 49 percent that may spark filing requirements for many Chinese companies in which Beijing has a 10 to 20 percent stake.

He added that the message that CFIUS is sending “is that we’re trying to be very deliberate about how we tailor these regulations because we don’t want to scare off foreign investment.”

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