Brown Opening Statement At Banking Committee Hearing On Markup Of The Foreign Investment Risk Review Modernization Act of 2017
WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – released the following opening statement at today’s executive session on S. 2098, the Foreign Investment Risk Review Modernization Act of 2017.
Sen. Brown’s remarks, as prepared for delivery, follow:
Thank you, Senator Crapo.
A decade ago, Congress adopted the Foreign Investment and National Security Act to give our government a greater ability to respond to foreign investment that could pose a threat to national security and to protect critical infrastructure.
Since then, the interagency group that implements the law, the Committee on Foreign Investment in the United States, or CFIUS, has quietly worked to try to ensure that foreign purchases of assets in the United States do not undermine our national security.
This has not been an easy task. While most direct foreign investment benefits our communities, our foreign adversaries are constantly working to narrow the gaps between our capabilities and theirs, through legitimate and illegitimate means.
And no country is more aggressive than China. China is seeking global dominance in key sectors, including aviation, rail, robotics, new energy vehicles such as electric cars, and agricultural machinery. These are all sectors in which the U.S. is an established global leader or driver of key technological developments.
We’ve seen this story before, and we know how it ends. Just ask the U.S. steel industry, which has been battered by China’s unfair trade practices.
China’s cheating impacts our advanced technology companies, too. Not only do U.S. companies have to compete in the marketplace against subsidized foreign competitors, but they must also defend themselves from cyber-attacks, industrial espionage, and a whole range of Chinese techniques to steal critical technologies.
To gain an additional edge, in recent years, there has been an increase in foreign investments from China into U.S. technology companies, including in the financial, agriculture and transportation sectors. And we have seen some companies structure deals to gain access to sensitive technology and information and evade CFIUS’s national security review.
The legislation we will consider today will help the U.S. more effectively respond to threats by China and others.
This bill will:
- Expand CFIUS’ jurisdiction to real estate transactions near military installations, minority-position investments in critical technology and critical infrastructure companies, any transaction that results in a change in control, and any transaction designed to evade CFIUS;
- Extend the time period for CFIUS’ review of covered transactions from 30-45 days;
- Create shorter “light filings” for certain transactions and require mandatory filings for transactions involving state-owned enterprises;
- Strengthen enforcement of mitigation agreements for certain covered transactions with national security concerns;
- Increase resources for CFIUS to handle the increased caseload, review cases in a timely manner, and protect national security, and
- Establish an ongoing, interagency process to identify emerging and foundational technologies essential to national security and not otherwise already subject to export controls, and place controls on those technologies.
I want to thank Senators Cornyn and Feinstein for the introduction of their bill last fall. Since then, we have worked with the Administration, business community, labor and other stakeholders to ensure that the legislation fosters a climate that welcomes foreign investment, but also protects against those investments that pose national security risks.
I want to thank Senator Crapo for his continued partnership on this Committee. While we don’t agree on everything, we do find areas where we have common ground, and this is one of them.
And I want to thank the members of the Committee for offering thoughtful amendments that improve this legislation. We are able to accept a number of those today.
I think our country faces a twofold problem. Our national security is threatened by the purchase and export of critical technologies and intellectual property. At the same time, our economic security is threatened by foreign investment in the U.S. that falls outside of the scope of CFIUS.
Today, we are tackling one of the problems with this legislation, but we still need to respond to the threats to our economic security.
I have introduced legislation with Senator Grassley – called the Foreign Investment Review Act – that would require the Secretary of Commerce to review certain foreign investments. Just as we see in the national security area, some of these investments, especially coming from state-owned enterprises, are not in our long-term interests.
I hope that Congress’ actions to address threats from China don’t end with the passage of this bill. There is still more work to be done and I look forward to working with members of this Committee and others on a comprehensive strategy to protect U.S. companies and workers from Chinese threats.
Thank you, Mr. Chairman.
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