Investigation of certain transactions for national security implications

(a)

In general

Section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 2170) is amended to read as follows:

721.

Investigation of certain transactions for national security implications

(a)

Investigations

(1)

In general

Upon receiving written notification, as prescribed by regulations under this section, of any merger, acquisition, or takeover proposed or pending on or after the date of the enactment of this section by or with any foreign person which could result in foreign control of any person engaged in interstate commerce in the United States, the President, acting through the President’s designee and the Committee on Foreign Investment in the United States shall conduct an investigation to determine the effects, if any, of the proposed or pending merger, acquisition, or takeover on the national security of the United States. (2)

Timing

Any investigation required under paragraph (1) shall be completed before the end of the 75-day period beginning on the date of the receipt by the President or the President’s designee of written notification of the proposed or pending merger, acquisition, or takeover. (b)

Confidentiality of information

(1)

In general

Any information or documentary material filed with the President or the President’s designee pursuant to this section shall be exempt from disclosure under section 552 of title 5, United States Code, and no such information or documentary material may be made public, except as may be relevant to any administrative or judicial action or proceeding. (2)

Availability to the congress

No provision of paragraph (1) shall be construed as preventing the disclosure of any information or documentary material to either House of Congress or to any duly authorized committee or subcommittee of the Congress. (c)

Committee on foreign investment in the United States

(1)

Establishment

The Committee on Foreign Investment in the United States established pursuant to Executive Order No. 11858 (hereafter in this section referred to as the Committee) shall be a multi-agency committee to carry out this section and such other assignments as the President may designate. (2)

Membership

The Committee shall be comprised of the following members: (A)The Secretary of the Treasury. (B)The Secretary of State. (C)The Secretary of Defense. (D)The Secretary of Homeland Security. (E)The Attorney General. (F)The Secretary of Commerce. (G)The Director of the Office of Management and Budget. (H)The United States Trade Representative. (I)The Chairman of the Council of Economic Advisors. (J)The Director of the Office of Science and Technology Policy. (3)

Chairperson

The Secretary of the Treasury shall be the Chairperson of the Committee. (4)

Other members

The Chairperson of the Committee shall involve the heads of such other Federal agencies, the Assistant to the President for National Security Affairs, and the Assistant to the President for Domestic Policy in any investigation under subsection (a) as the Chairperson determines to be appropriate on the basis of the facts and circumstances of the transaction under investigation. (5)

Role of the director of national intelligence

The Director of National Intelligence shall provide appropriate intelligence analysis and intelligence briefings to the Committee. (d)

Action by the President

(1)

In general

No proposed or pending acquisition, merger, or takeover, of a person engaged in interstate commerce in the United States by or with foreign persons may occur unless the President, on the basis of an investigation and report by the Committee, finds that such acquisition, merger or takeover, will not threaten to impair the national security of the United States, as defined by regulations prescribed pursuant to this section, and approves the transaction. (2)

Enforcement

The President shall direct the Attorney General to seek appropriate relief, including divestment relief, in the district courts of the United States in order to implement and enforce— (A)any finding, action, or determination under this section of disapproval of an acquisition, merger, or takeover; or (B)any conditions imposed on any approval of any acquisition, merger, or takeover. (3)

Finality of determinations

All actions and determinations under this section shall be final and not subject to judicial review. (e)

Findings by the President

(1)

In general

A finding under this section of impairment or threatened impairment to national security shall be based on credible evidence that leads the President to believe that— (A)the foreign interest exercising control might take action that threatens to impair the national security; and (B)other provisions of law do not provide adequate and appropriate authority for the President to protect the national security. (2)

Factors to be considered

Any investigation under this section shall take into account the following factors: (A)Domestic production needed for projected national defense requirements. (B)The capability and capacity of domestic industries to meet national defense requirements, including the availability of human resources, products, technology, materials, and other supplies and services. (C)The control of domestic industries and commercial activity by foreign citizens as it affect the capability and capacity of the United States to meet the requirements of national security. (D)The potential effects of the proposed or pending transaction on sales of military goods, equipment, or technology to any country— (i)identified by the Secretary of State— (I)under section 6(j) of the Export Administration Act of 1979, as a country that supports terrorism; (II)under section 6(l) of the Export Administration Act of 1979, as a country of concern regarding missile proliferation; or (III)under section 6(m) of the Export Administration Act of 1979, as a country of concern regarding the proliferation of chemical and biological weapons; or (ii)listed under section 309(c) of the Nuclear Non-Proliferation Act of 1978 on the Nuclear Non-Proliferation-Special Country List (15 C.F.R. Part 778, Supplement No. 4) or any successor list. (E)The potential effects on the proposed or pending transaction on United States international technological leadership in areas affecting United States national security. (f)

Report to the congress

Upon making any determination to approve or disapprove any merger, acquisition, or takeover by or with any foreign person which could result in foreign control of any person engaged in interstate commerce in the United States, the President shall immediately transmit to the Secretary of the Senate and the Clerk of the House of Representatives a written report of the President’s determination under this section to approve or disapprove such merger, acquisition, or takeover, including a detailed explanation of the finding made and factors considered. (g)

Congressional action

(1)

In general

If the determination of the President contained in the report transmitted to the Congress under subsection (f) is that the President will approve any merger, acquisition, or takeover under subsection (d) and not later than 30 days after the date on which Congress receives the report, a joint resolution described in paragraph (2) is enacted into law, then the President shall take such action under subsection (d) as is necessary to prohibit the merger, acquisition, or takeover, including, if such acquisition has been completed, directing the Attorney General to seek divestment or other appropriate relief in the district courts of the United States. (2)

Joint resolution described

For purposes of paragraph (1), the term joint resolution means a joint resolution of the Congress, the sole matter after the resolving clause of which is as follows: That the Congress disapproves the determination of approval of the President contained in the report submitted to Congress pursuant to section 721(f) of the Defense Production Act of 1950 on _____., with the blank space being filled with the appropriate date. (3)

Computation of review period

In computing the 30-day period referred to in paragraph (1), there shall be excluded any day described in section 154(b) of the Trade Act of 1974. (h)

Regulations

The President shall direct the issuance of regulations to carry out this section. Such regulations shall, to the extent possible, minimize paperwork burdens and shall to the extent possible coordinate reporting requirements under this section with reporting requirements under any other provision of Federal law. (i)

Effect on other law

No provision of this section shall be construed as altering or affecting any existing authority, power, process, regulation, investigation, enforcement measure, or review provided by any other provision of law. (j)

Technology risk assessments

In any case in which an assessment of the risk of diversion of defense critical technology is performed by the Committee or any other designee of the President, a copy of such assessment shall be provided to any other designee of the President responsible for reviewing or investigating a merger, acquisition, or takeover under this section. (k)

Biennial report on critical technologies

(1)

In general

In order to assist the Congress in its oversight responsibilities with respect to this section, the President and such agencies as the President shall designate shall complete and furnish to the Congress, not later than May 1, 2007, and upon the expiration of every 2 years thereafter, a report, both in classified and unclassified form, which— (A)evaluates whether there is credible evidence of a coordinated strategy by 1 or more countries or companies to acquire United States companies involved in research, development, or production of critical technologies for which the United States is a leading producer; and (B)evaluates whether there are industrial espionage activities directed or directly assisted by foreign governments against private United States companies aimed at obtaining commercial secrets related to critical technology. (2)

Definition

For the purposes of this subsection, the term critical technologies means technologies identified under title VI of the National Science and Technology Policy, Organization, and Priorities Act of 1976 or other critical technology, critical components, or critical technology items essential to national defense or security identified pursuant to this section. (l)

Biennial report on critical infrastructure

In order to assist the Congress in its oversight responsibilities, the President and such agencies as the President shall designate shall complete and furnish to the Congress, not later than 90 days after the date of enactment of this subsection and upon the expiration of every 2 years thereafter, a report, both in classified and unclassified form, which— (1)lists all critical infrastructure, as defined under subtitle B of title II of Public Law 107–296, that is owned, controlled or dominated by an alien, a foreign corporation, or a foreign government; (2)evaluates whether there is credible evidence of a coordinated strategy by 1 or more countries or companies to acquire United States critical infrastructure; and (3)evaluates whether there are industrial espionage activities directed or directly assisted by foreign governments against private United States companies controlling critical infrastructure.

(b)

Effective date

The amendments made by subsection (a) shall apply to the review and investigation of any acquisition, merger, or takeover which is or becomes subject to section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 2170) (as in effect immediately before the date of the enactment of this Act or on or after such date) that has not become final before the date of the enactment of this Act.