Brown Opening Statement at Banking Committee Hearing on The Committee on Foreign Investment (CFIUS)
BROWN OPENING STATEMENT AT BANKING COMMITTEE HEARING on THE Committee on foreign investment (CFIUS)
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 hearing entitled, “Examining the Committee on Foreign Investment for the United States.”
Brown’s remarks, as prepared for delivery, follow.
Senator Sherrod Brown
U.S. Senate Committee on Banking, Housing and Urban Affairs
Opening Statement for “Examining the Committee on Foreign Investment in the United States”
September 14, 2017
Thank you Chairman Crapo for holding this hearing.
As is evidenced by the Committee’s focus on Russia, Iran, and North Korea sanctions already this year, national security issues are more important than ever.
It only makes sense that we should take a look at other national security issues in this committee’s jurisdiction, like the Committee on Foreign Investment in the United States, CFIUS [sif-ee-us].
CFIUS is charged with reviewing certain foreign acquisitions of U.S. companies that could pose national security threats. It has been almost a decade since we have had a hearing on this topic.
The United States continues to be one of the most attractive markets for foreign investment, and our country welcomes that investment when it is part of a straightforward business deal – when they’re done right, these deals can create jobs here at home and help grow American industries.
But we know it’s not always that simple – some transactions have national security as well as commercial implications. CFIUS has seen an increase in its reviews of Chinese acquisitions of U.S. companies. In the three most recent reported years, CFIUS reviews of Chinese acquisitions topped the list each time.
In 2016, Chinese companies invested a total of $51 billion into the United States through 65 deals, a 360 percent surge from 2015. This year, it is already clear that CFIUS’s workload has increased—with acquisitions from China and other nations.
While I have serious concerns about many of China’s economic and industrial policies, not all Chinese investments pose national security threats. Fuyao Glass, which has invested in Moraine, Ohio, is an example of a project which poses no such threat, and is creating jobs.
But some foreign investments pose national security threats—such as intellectual property theft and espionage from U.S. industries crucial to our nation’s defense (as well as threats to the intellectual property of seeds potentially impacting the global food supply) and transfers of critical technologies. We have seen an increase in smaller private investments to obtain access to new technological know-how.
We don’t yet know who perpetrated the hack of Equifax— exposing the personal information of 143 million Americans, nearly half the country. It could be domestic or foreign criminals. But we know that some foreign governments and companies have tried to gain access to sensitive information about Americans and pose other cybersecurity concerns, and that has to be considered as well.
These are the types of threats we hear about from the national security agencies and others.
Today, we have three people before the committee who have extensive experience with the CFIUS process, with export controls, and with the other tools our government uses to address national security threats from other nations. I look forward to their assessment how CFIUS is working, if its scope is appropriate--considering shifting national security threats, and if it has enough resources to review an increasing number of transactions and thoroughly investigate possible national security threats.
I also would like the witnesses’ opinions on the national security risks I highlighted earlier, and whether they believe it is CFIUS’ responsibility to try to address these risks and others, or if there are programs at the other national security agencies—the Departments of State, Defense, and Commerce—that are better able to do that.
I don’t think CFIUS reform is the answer to addressing all national security risks—whether from China or other nations. But I am open to considering improvements to CFIUS if we believe there are resource concerns or gaps that are allowing certain investments that pose real threats to Americans to fall through the net.
Any solution is likely to be multi-faceted—involving trade, economic, and defense policies, as well as export controls, and some of that is outside of this Committee’s jurisdiction.
Thank you, Mr. Chairman.
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