User:PatrickFlaherty/CFIUS
The Committee on Foreign Investment in the United States (or CFIUS) is an inter-agency committee of the United States Government that reviews the national security implications of foreign investments of U.S. companies or operations. Chaired by the Secretary of the Treasury, CFIUS includes representatives from 9 U.S. agencies, including the Defense, State and Commerce departments, as well as (most recently) the Department of Homeland Security. CFIUS was established by Gerald Ford's Executive Order 11858 in 1975. The committee gained additional authority after Ronald Reagan delegated Presidential oversight to CFIUS by his Executive Order 12661 in 1988. This was in response to U.S. Congress giving authority to the President to review foreign investments, in the form of Exon-Florio Amendment.
Process[edit]
Companies proposing to be involved in an acquisition by a foreign firm are supposed to voluntarily notify CFIUS, but CFIUS can review transactions that are not voluntarily submitted.
CFIUS reviews begin with a 30-day decision to authorize a transaction or begin a statutory investigation. If the latter is chosen, the committee has another 45 days to decide whether to permit the acquisition or order divestment. Most transactions submitted to CFIUS are approved without the statutory investigation.[1]
CFIUS has looked at the "restrictions on sale of advanced computers to any of a long list of foreign recipients, ranging from China to Iran."[2] CFIUS reviews even deals with firms from U.S. allies, such as BAE Systems' early-2005 acquisition of United Defense. This and the vast majority of transactions submitted to CFIUS are approved without difficulty. But at least one deal has been called off when CFIUS began to take a closer look.[3]
History[edit]
CFIUS has had three major changes over the course of its existence.
President Ford’s 1975 Executive Order established the basic structure of CFIUS,
and directed that the “representative”7 of the Secretary of the Treasury be the
chairman of the Committee. The Executive Order also stipulated that the Committee
would have “the primary continuing responsibility within the Executive Branch for
monitoring the impact of foreign investment in the United States, both direct and
portfolio, and for coordinating the implementation of United States policy on such
investment.” In particular, CFIUS was directed to: (1) arrange for the preparation of
analyses of trends and significant developments in foreign investments in the United
States; (2) provide guidance on arrangements with foreign governments for advance
consultations on prospective major foreign governmental investments in the United
States; (3) review investments in the United States which, in the judgement of the
Committee, might have major implications for United States national interests; and
(4) consider proposals for new legislation or regulations relating to foreign
investment as may appear necessary.
Exon-Florio Amendment[edit]
Byrd Amendment[edit]
Foreign Investment and National Security Act of 2007[edit]
Important cases[edit]
- The 2005 acquisition by Lenovo, the largest personal computer company in China, of IBM's personal computer and laptop unit
- State-owned China National Offshore Oil Corporation's attempted acquisition of UNOCAL (2005)
- State-owned Dubai Ports World's planned acquisition of P&O, the operator of many US ports, including New York (2006)
- NTT Communications' acquisition of Verio (2000)
- The 2005 acquisition of Sequioa Voting Systems of Oakland, California, by Smartmatic, a Dutch company contracted by Hugo Chávez's government to replace that country's elections machinery[4]
Notifications and Investigations[edit]
CFIUS Notifications and Investigations, 1988-2005[5]
| Year | Notifications | Investigations | Notices withdrawn | Presidential decision |
|---|---|---|---|---|
| 1988 | 14 | 1 | 0 | 1 |
| 1989 | 204 | 5 | 2 | 3 |
| 1990 | 295 | 6 | 2 | 4 |
| 1991 | 152 | 1 | 0 | 1 |
| 1992 | 106 | 2 | 1 | 1 |
| 1993 | 82 | 0 | 0 | 0 |
| 1994 | 69 | 0 | 0 | 0 |
| 1995 | 81 | 0 | 0 | 0 |
| 1996 | 55 | 0 | 0 | 0 |
| 1997 | 62 | 0 | 0 | 0 |
| 1998 | 65 | 2 | 2 | 0 |
| 1999 | 79 | 0 | 0 | 0 |
| 2000 | 72 | 1 | 0 | 1 |
| 2001 | 55 | 1 | 1 | 0 |
| 2002 | 43 | 0 | 0 | 0 |
| 2003 | 41 | 2 | 1 | 1 |
| 2004 | 53 | 2 | 2 | 0 |
| 2005 | 65 | 2 | 2 | 0 |
| Total | 1,593 | 25 | 13 | 12 |
Opinions on the Committee[edit]
In February 2006, Richard Perle gave more insight into CFIUS when he related to CBS News his experience on the panel during the Reagan administration, "The committee almost never met, and when it deliberated it was usually at a fairly low bureaucratic level." He also added, "I think it's a bit of a joke if we were serious about scrutinizing foreign ownership and foreign control, particularly since 9/11."[6]
Others emphasize the crucial role that foreign direct investment plays in the U.S. economy, and the discouraging effect that heightened scrutiny and protectionism can cause. Foreign investors in the United States, much like U.S. investors elsewhere, bring expertise and infusions of capital into often-struggling sectors of the U.S. economy. In a February 2006 interview with the New York Times, another former Reagan administration official, Clyde V. Prestowitz Jr., noted that the United States "need[s] a net inflow of capital of $3 billion a day to keep the economy afloat.... Yet all of the body language here is 'go away.'"[7] And, as Secretary Powell once remarked, "money, capital, is a coward; it will go nowhere where it is put in fear."[8]
See Also[edit]
External links[edit]
References[edit]
- ^ a b Sills, Gay Hartwell (2006). "Committee on Foreign Investments in the United States (CFIUS)". U.S. Department of Treasury, Office of the Assistant Secretary International Affairs, Office of International Investment. Retrieved 2006-03-26.
- ^ Rash, Wayne (2005-01-24). "Suppose IBM-Lenovo Deal Doesn't Happen". eWeek.com.
- ^ McCarthy, Ellen (2006-03-24). "Purchase by Israeli Firm Called Off". Washington Post. p. A06.
- ^ Voting Machine Company Submits to Inquiry - New York Times
- ^ Graham, Edward M (May 2006). US National Security and Foreign Direct Investment (PDF). p. 57. ISBN 978-0-88132-391-7.
{{cite book}}: Unknown parameter|coauthors=ignored (|author=suggested) (help) - ^ "Bush, Congress In Dark About Port Deal". CBS News. 2006-02-22.
{{cite news}}:|first=missing|last=(help) - ^ Porter, Eduardo (2006-03-10). "Dubai Deal's Collapse Prompts Fears Abroad on Trade With U.S." The New York Times. (free registration required to access content)
- ^ Powell, Colin (2002-04-23). "Remarks at Sovereign Credit Rating Conference". United States Department of State.