[Congressional Record Volume 153, Number 34 (Wednesday, February 28, 2007)]
[Extensions of Remarks]
[Pages E426-E427]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   COMMENDING THE PASSING OF H.R. 556

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                          HON. DARRELL E. ISSA

                             of california

                    in the house of representatives

                      Wednesday, February 28, 2007

  Mr. ISSA. Madam Speaker, today, the U.S. House of Representatives 
unanimously passed H.R. 556, which reforms and modernizes the process 
by which the Committee on Foreign Investment in the United States 
reviews national security issues pertaining to foreign acquisitions.
  I commend the bipartisan House Financial Services Committee for 
putting together a strong bill that encourages and respects a general 
policy of openness toward foreign investment, but also protects our 
national security from new threats in a post 9-11 world.
  This legislation makes clear that in reviewing foreign government 
acquisitions of critical U.S. energy infrastructure, such as pipelines 
and Liquefied Natural Gas (LNG) facilities, the United States will not 
turn a blind eye to foreign governments that use energy assets as a 
political, economic or foreign policy weapon.
  As the Committee's report states, we expect ``. . . that acquisitions 
of U.S. energy companies or assets by foreign governments or companies 
controlled by foreign governments--including any instance in which such 
foreign government has used energy assets to interfere with or 
influence policies or economic conditions in other countries in ways 
that threaten the national security of those countries--will be 
reviewed closely for their national security impact. If such 
acquisitions raise legitimate concerns about threats to U.S. national 
security, appropriate protections as set forth in the statute should be 
instituted including potentially the prohibition of the transaction.''
  Unfortunately, recent actions on the part of the government of Russia 
demonstrate why such protections are needed. One need only ask 
officials in the Ukraine, Lithuania, Belarus, Georgia and many 
countries throughout Europe whether the Russian government--through its 
state-owned oil monopoly, Rosneft, and gas monopoly, Gazprom--uses its 
energy assets to ``interfere with or influence policies or economic 
conditions'' in their countries. If Gazprom or Rosneft tries to acquire 
critical energy infrastructure here in the United States, the CFIUS 
review process should carefully review the acquisition in order to 
determine the impact on our own national security, and I commend the 
bipartisan authors of this legislation for demanding nothing less.
  I commend the Financial Services Committee for recognizing that the 
reforms and procedures detailed in H.R. 556 ``stand in stark contrast 
to actions taken by some foreign governments, where expropriations of 
assets, often in the energy sector, have occurred arbitrarily, without 
justification, and without recompense for U.S. investors.''
  As many of my colleagues know, U.S. investors throughout the country 
lost approximately $6 billion when the Russian government effectively 
re-nationalized Russia's largest privately-owned energy company, Yukos, 
and expropriated its assets without compensation to its owners or 
shareholders.
  Now, for the first time since the Russian government's expropriation 
without compensation of Yukos, and President Vladimir Putin's

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ruthless strategy of using Russian energy assets to apply economic and 
political pressure on neighboring countries and the West--including the 
disruption of oil and gas supplies--the Congress has recognized that if 
the Russian Government or its subsidiary companies seek to acquire 
critical U.S. energy infrastructure, Russia's coercive energy policies 
and its potential threat to the energy security of the United States 
must be considered as part of the CFIUS review process.
  The National Security Foreign Investment Reform and Strengthened 
Transparency Act of 2007 strikes the right balance. It strongly 
encourages foreign investment in the United States without unnecessary 
and reasonable restrictions by companies that engage in responsible 
commercial activities and practices. However, H.R. 556 also makes it 
clear that energy-related infrastructure is critically important to our 
national security, and those companies that wish to acquire our 
infrastructure must adhere to internationally recognized standards of 
commercial conduct.

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