Congressional Record, Volume 153 Issue 109 (Tuesday, July 10, 2007)

[Congressional Record Volume 153, Number 109 (Tuesday, July 10, 2007)]
[House]
[Pages H7451-H7462]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

FOREIGN INVESTMENT AND NATIONAL SECURITY ACT OF 2007

Mrs. MALONEY of New York. Mr. Speaker, I move to suspend the rules
and concur in the Senate amendment to the bill (H.R. 556) to ensure
national security while promoting foreign investment and the creation
and maintenance of jobs, to reform the process by which such
investments are examined

[[Page H7452]]

for any effect they may have on national security, to establish the
Committee on Foreign Investment in the United States, and for other
purposes.
The Clerk read the title of the bill.
The text of the Senate amendment is as follows:

Senate amendment:
Strike out all after the enacting clause and insert:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Foreign
Investment and National Security Act of 2007''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. United States security improvement amendments; clarification of
review and investigation process.
Sec. 3. Statutory establishment of the Committee on Foreign Investment
in the United States.
Sec. 4. Additional factors for consideration.
Sec. 5. Mitigation, tracking, and postconsummation monitoring and
enforcement.
Sec. 6. Action by the President.
Sec. 7. Increased oversight by Congress.
Sec. 8. Certification of notices and assurances.
Sec. 9. Regulations.
Sec. 10. Effect on other law.
Sec. 11. Clerical amendments
Sec. 12. Effective date.

SEC. 2. UNITED STATES SECURITY IMPROVEMENT AMENDMENTS;
CLARIFICATION OF REVIEW AND INVESTIGATION
PROCESS.

Section 721 of the Defense Production Act of 1950 (50
U.S.C. App. 2170) is amended by striking subsections (a) and
(b) and inserting the following:
``(a) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) Committee; chairperson.--The terms `Committee' and
`chairperson' mean the Committee on Foreign Investment in the
United States and the chairperson thereof, respectively.
``(2) Control.--The term `control' has the meaning given to
such term in regulations which the Committee shall prescribe.
``(3) Covered transaction.--The term `covered transaction'
means any merger, acquisition, or takeover that is proposed
or pending after August 23, 1988, by or with any foreign
person which could result in foreign control of any person
engaged in interstate commerce in the United States.
``(4) Foreign government-controlled transaction.--The term
`foreign government-controlled transaction' means any covered
transaction that could result in the control of any person
engaged in interstate commerce in the United States by a
foreign government or an entity controlled by or acting on
behalf of a foreign government.
``(5) Clarification.--The term `national security' shall be
construed so as to include those issues relating to `homeland
security', including its application to critical
infrastructure.
``(6) Critical infrastructure.--The term `critical
infrastructure' means, subject to rules issued under this
section, systems and assets, whether physical or virtual, so
vital to the United States that the incapacity or destruction
of such systems or assets would have a debilitating impact on
national security.
``(7) Critical technologies.--The term `critical
technologies' means critical technology, critical components,
or critical technology items essential to national defense,
identified pursuant to this section, subject to regulations
issued at the direction of the President, in accordance with
subsection (h).
``(8) Lead agency.--The term `lead agency' means the
agency, or agencies, designated as the lead agency or
agencies pursuant to subsection (k)(5) for the review of a
transaction.
``(b) National Security Reviews and Investigations.--
``(1) National security reviews.--
``(A) In general.--Upon receiving written notification
under subparagraph (C) of any covered transaction, or
pursuant to a unilateral notification initiated under
subparagraph (D) with respect to any covered transaction, the
President, acting through the Committee--
``(i) shall review the covered transaction to determine the
effects of the transaction on the national security of the
United States; and
``(ii) shall consider the factors specified in subsection
(f) for such purpose, as appropriate.
``(B) Control by foreign government.--If the Committee
determines that the covered transaction is a foreign
government-controlled transaction, the Committee shall
conduct an investigation of the transaction under paragraph
(2).
``(C) Written notice.--
``(i) In general.--Any party or parties to any covered
transaction may initiate a review of the transaction under
this paragraph by submitting a written notice of the
transaction to the Chairperson of the Committee.
``(ii) Withdrawal of notice.--No covered transaction for
which a notice was submitted under clause (i) may be
withdrawn from review, unless a written request for such
withdrawal is submitted to the Committee by any party to the
transaction and approved by the Committee.
``(iii) Continuing discussions.--A request for withdrawal
under clause (ii) shall not be construed to preclude any
party to the covered transaction from continuing informal
discussions with the Committee or any member thereof
regarding possible resubmission for review pursuant to this
paragraph.
``(D) Unilateral initiation of review.--Subject to
subparagraph (F), the President or the Committee may initiate
a review under subparagraph (A) of--
``(i) any covered transaction;
``(ii) any covered transaction that has previously been
reviewed or investigated under this section, if any party to
the transaction submitted false or misleading material
information to the Committee in connection with the review or
investigation or omitted material information, including
material documents, from information submitted to the
Committee; or
``(iii) any covered transaction that has previously been
reviewed or investigated under this section, if--

``(I) any party to the transaction or the entity resulting
from consummation of the transaction intentionally materially
breaches a mitigation agreement or condition described in
subsection (l)(1)(A);
``(II) such breach is certified to the Committee by the
lead department or agency monitoring and enforcing such
agreement or condition as an intentional material breach; and
``(III) the Committee determines that there are no other
remedies or enforcement tools available to address such
breach.

``(E) Timing.--Any review under this paragraph shall be
completed before the end of the 30-day period beginning on
the date of the acceptance of written notice under
subparagraph (C) by the chairperson, or beginning on the date
of the initiation of the review in accordance with
subparagraph (D), as applicable.
``(F) Limit on delegation of certain authority.--The
authority of the Committee to initiate a review under
subparagraph (D) may not be delegated to any person, other
than the Deputy Secretary or an appropriate Under Secretary
of the department or agency represented on the Committee.
``(2) National security investigations.--
``(A) In general.--In each case described in subparagraph
(B), the Committee shall immediately conduct an investigation
of the effects of a covered transaction on the national
security of the United States, and take any necessary actions
in connection with the transaction to protect the national
security of the United States.
``(B) Applicability.--Subparagraph (A) shall apply in each
case in which--
``(i) a review of a covered transaction under paragraph (1)
results in a determination that--

``(I) the transaction threatens to impair the national
security of the United States and that threat has not been
mitigated during or prior to the review of a covered
transaction under paragraph (1);
``(II) the transaction is a foreign government-controlled
transaction; or
``(III) the transaction would result in control of any
critical infrastructure of or within the United States by or
on behalf of any foreign person, if the Committee determines
that the transaction could impair national security, and that
such impairment to national security has not been mitigated
by assurances provided or renewed with the approval of the
Committee, as described in subsection (l), during the review
period under paragraph (1); or

``(ii) the lead agency recommends, and the Committee
concurs, that an investigation be undertaken.
``(C) Timing.--Any investigation under subparagraph (A)
shall be completed before the end of the 45-day period
beginning on the date on which the investigation commenced.
``(D) Exception.--
``(i) In general.--Notwithstanding subparagraph (B)(i), an
investigation of a foreign government-controlled transaction
described in subclause (II) of subparagraph (B)(i) or a
transaction involving critical infrastructure described in
subclause (III) of subparagraph (B)(i) shall not be required
under this paragraph, if the Secretary of the Treasury and
the head of the lead agency jointly determine, on the basis
of the review of the transaction under paragraph (1), that
the transaction will not impair the national security of the
United States.
``(ii) Nondelegation.--The authority of the Secretary or
the head of an agency referred to in clause (i) may not be
delegated to any person, other than the Deputy Secretary of
the Treasury or the deputy head (or the equivalent thereof)
of the lead agency, respectively.
``(E) Guidance on certain transactions with national
security implications.--The Chairperson shall, not later than
180 days after the effective date of the Foreign Investment
and National Security Act of 2007, publish in the Federal
Register guidance on the types of transactions that the
Committee has reviewed and that have presented national
security considerations, including transactions that may
constitute covered transactions that would result in control
of critical infrastructure relating to United States national
security by a foreign government or an entity controlled by
or acting on behalf of a foreign government.
``(3) Certifications to congress.--
``(A) Certified notice at completion of review.--Upon
completion of a review under subsection (b) that concludes
action under this section, the chairperson and the head of
the lead agency shall transmit a certified notice to the
members of Congress specified in subparagraph (C)(iii).
``(B) Certified report at completion of investigation.--As
soon as is practicable after completion of an investigation
under subsection (b) that concludes action under this
section, the chairperson and the head of the lead agency
shall transmit to the members of Congress specified in
subparagraph (C)(iii) a certified written report (consistent
with the requirements of subsection (c)) on the results of
the investigation, unless the matter under investigation has
been sent to the President for decision.
``(C) Certification procedures.--
``(i) In general.--Each certified notice and report
required under subparagraphs (A) and (B), respectively, shall
be submitted to the members of Congress specified in clause
(iii), and shall include--

[[Page H7453]]

``(I) a description of the actions taken by the Committee
with respect to the transaction; and
``(II) identification of the determinative factors
considered under subsection (f).

``(ii) Content of certification.--Each certified notice and
report required under subparagraphs (A) and (B),
respectively, shall be signed by the chairperson and the head
of the lead agency, and shall state that, in the
determination of the Committee, there are no unresolved
national security concerns with the transaction that is the
subject of the notice or report.
``(iii) Members of congress.--Each certified notice and
report required under subparagraphs (A) and (B),
respectively, shall be transmitted--

``(I) to the Majority Leader and the Minority Leader of the
Senate;
``(II) to the chair and ranking member of the Committee on
Banking, Housing, and Urban Affairs of the Senate and of any
committee of the Senate having oversight over the lead
agency;
``(III) to the Speaker and the Minority Leader of the House
of Representatives;
``(IV) to the chair and ranking member of the Committee on
Financial Services of the House of Representatives and of any
committee of the House of Representatives having oversight
over the lead agency; and
``(V) with respect to covered transactions involving
critical infrastructure, to the members of the Senate from
the State in which the principal place of business of the
acquired United States person is located, and the member from
the Congressional District in which such principal place of
business is located.

``(iv) Signatures; limit on delegation.--

``(I) In general.--Each certified notice and report
required under subparagraphs (A) and (B), respectively, shall
be signed by the chairperson and the head of the lead agency,
which signature requirement may only be delegated in
accordance with subclause (II).
``(II) Limitation on delegation of certifications.--The
chairperson and the head of the lead agency may delegate the
signature requirement under subclause (I)--

``(aa) only to an appropriate employee of the Department of
the Treasury (in the case of the Secretary of the Treasury)
or to an appropriate employee of the lead agency (in the case
of the lead agency) who was appointed by the President, by
and with the advice and consent of the Senate, with respect
to any notice provided under paragraph (1) following the
completion of a review under this section; or
``(bb) only to a Deputy Secretary of the Treasury (in the
case of the Secretary of the Treasury) or a person serving in
the Deputy position or the equivalent thereof at the lead
agency (in the case of the lead agency), with respect to any
report provided under subparagraph (B) following an
investigation under this section.
``(4) Analysis by director of national intelligence.--
``(A) In general.--The Director of National Intelligence
shall expeditiously carry out a thorough analysis of any
threat to the national security of the United States posed by
any covered transaction. The Director of National
Intelligence shall also seek and incorporate the views of all
affected or appropriate intelligence agencies with respect to
the transaction.
``(B) Timing.--The analysis required under subparagraph (A)
shall be provided by the Director of National Intelligence to
the Committee not later than 20 days after the date on which
notice of the transaction is accepted by the Committee under
paragraph (1)(C), but such analysis may be supplemented or
amended, as the Director considers necessary or appropriate,
or upon a request for additional information by the
Committee. The Director may begin the analysis at any time
prior to acceptance of the notice, in accordance with
otherwise applicable law.
``(C) Interaction with intelligence community.--The
Director of National Intelligence shall ensure that the
intelligence community remains engaged in the collection,
analysis, and dissemination to the Committee of any
additional relevant information that may become available
during the course of any investigation conducted under
subsection (b) with respect to a transaction.
``(D) Independent role of director.--The Director of
National Intelligence shall be a nonvoting, ex officio member
of the Committee, and shall be provided with all notices
received by the Committee under paragraph (1)(C) regarding
covered transactions, but shall serve no policy role on the
Committee, other than to provide analysis under subparagraphs
(A) and (C) in connection with a covered transaction.
``(5) Submission of additional information.--No provision
of this subsection shall be construed as prohibiting any
party to a covered transaction from submitting additional
information concerning the transaction, including any
proposed restructuring of the transaction or any
modifications to any agreements in connection with the
transaction, while any review or investigation of the
transaction is ongoing.
``(6) Notice of results to parties.--The Committee shall
notify the parties to a covered transaction of the results of
a review or investigation under this section, promptly upon
completion of all action under this section.
``(7) Regulations.--Regulations prescribed under this
section shall include standard procedures for--
``(A) submitting any notice of a covered transaction to the
Committee;
``(B) submitting a request to withdraw a covered
transaction from review;
``(C) resubmitting a notice of a covered transaction that
was previously withdrawn from review; and
``(D) providing notice of the results of a review or
investigation to the parties to the covered transaction, upon
completion of all action under this section.''.

SEC. 3. STATUTORY ESTABLISHMENT OF THE COMMITTEE ON FOREIGN
INVESTMENT IN THE UNITED STATES.

Section 721 of the Defense Production Act of 1950 (50
U.S.C. App. 2170) is amended by striking subsection (k) and
inserting the following:
``(k) 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, 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 or the designee of any such member:
``(A) The Secretary of the Treasury.
``(B) The Secretary of Homeland Security.
``(C) The Secretary of Commerce.
``(D) The Secretary of Defense.
``(E) The Secretary of State.
``(F) The Attorney General of the United States.
``(G) The Secretary of Energy.
``(H) The Secretary of Labor (nonvoting, ex officio).
``(I) The Director of National Intelligence (nonvoting, ex
officio).
``(J) The heads of any other executive department, agency,
or office, as the President determines appropriate, generally
or on a case-by-case basis.
``(3) Chairperson.--The Secretary of the Treasury shall
serve as the chairperson of the Committee.
``(4) Assistant secretary for the department of the
treasury.--There shall be established an additional position
of Assistant Secretary of the Treasury, who shall be
appointed by the President, by and with the advice and
consent of the Senate. The Assistant Secretary appointed
under this paragraph shall report directly to the
Undersecretary of the Treasury for International Affairs. The
duties of the Assistant Secretary shall include duties
related to the Committee on Foreign Investment in the United
States, as delegated by the Secretary of the Treasury under
this section.
``(5) Designation of lead agency.--The Secretary of the
Treasury shall designate, as appropriate, a member or members
of the Committee to be the lead agency or agencies on behalf
of the Committee--
``(A) for each covered transaction, and for negotiating any
mitigation agreements or other conditions necessary to
protect national security; and
``(B) for all matters related to the monitoring of the
completed transaction, to ensure compliance with such
agreements or conditions and with this section.
``(6) Other members.--The chairperson shall consult with
the heads of such other Federal departments, agencies, and
independent establishments in any review or investigation
under subsection (a), as the chairperson determines to be
appropriate, on the basis of the facts and circumstances of
the covered transaction under review or investigation (or the
designee of any such department or agency head).
``(7) Meetings.--The Committee shall meet upon the
direction of the President or upon the call of the
chairperson, without regard to section 552b of title 5,
United States Code (if otherwise applicable).''.

SEC. 4. ADDITIONAL FACTORS FOR CONSIDERATION.

Section 721(f) of the Defense Production Act of 1950 (50
U.S.C. App. 2170(f)) is amended--
(1) in the matter preceding paragraph (1), by striking
``among other factors'';
(2) in paragraph (4)--
(A) in subparagraph (A) by striking ``or'' at the end;
(B) by redesignating subparagraph (B) as subparagraph (C);
(C) by inserting after subparagraph (A) the following:
``(B) identified by the Secretary of Defense as posing a
potential regional military threat to the interests of the
United States; or''; and
(D) by striking ``and'' at the end;
(3) in paragraph (5), by striking the period at the end and
inserting a semicolon; and
(4) by adding at the end the following:
``(6) the potential national security-related effects on
United States critical infrastructure, including major energy
assets;
``(7) the potential national security-related effects on
United States critical technologies;
``(8) whether the covered transaction is a foreign
government-controlled transaction, as determined under
subsection (b)(1)(B);
``(9) as appropriate, and particularly with respect to
transactions requiring an investigation under subsection
(b)(1)(B), a review of the current assessment of--
``(A) the adherence of the subject country to
nonproliferation control regimes, including treaties and
multilateral supply guidelines, which shall draw on, but not
be limited to, the annual report on `Adherence to and
Compliance with Arms Control, Nonproliferation and
Disarmament Agreements and Commitments' required by section
403 of the Arms Control and Disarmament Act;
``(B) the relationship of such country with the United
States, specifically on its record on cooperating in counter-
terrorism efforts, which shall draw on, but not be limited
to, the report of the President to Congress under section
7120 of the Intelligence Reform and Terrorism Prevention Act
of 2004; and
``(C) the potential for transshipment or diversion of
technologies with military applications, including an
analysis of national export control laws and regulations;
``(10) the long-term projection of United States
requirements for sources of energy and other critical
resources and material; and
``(11) such other factors as the President or the Committee
may determine to be appropriate,

[[Page H7454]]

generally or in connection with a specific review or
investigation.''.

SEC. 5. MITIGATION, TRACKING, AND POSTCONSUMMATION MONITORING
AND ENFORCEMENT.

Section 721 of the Defense Production Act of 1950 (50
U.S.C. App. 2170) is amended by adding at the end the
following:
``(l) Mitigation, Tracking, and Postconsummation Monitoring
and Enforcement.--
``(1) Mitigation.--
``(A) In general.--The Committee or a lead agency may, on
behalf of the Committee, negotiate, enter into or impose, and
enforce any agreement or condition with any party to the
covered transaction in order to mitigate any threat to the
national security of the United States that arises as a
result of the covered transaction.
``(B) Risk-based analysis required.--Any agreement entered
into or condition imposed under subparagraph (A) shall be
based on a risk-based analysis, conducted by the Committee,
of the threat to national security of the covered
transaction.
``(2) Tracking authority for withdrawn notices.--
``(A) In general.--If any written notice of a covered
transaction that was submitted to the Committee under this
section is withdrawn before any review or investigation by
the Committee under subsection (b) is completed, the
Committee shall establish, as appropriate--
``(i) interim protections to address specific concerns with
such transaction that have been raised in connection with any
such review or investigation pending any resubmission of any
written notice under this section with respect to such
transaction and further action by the President under this
section;
``(ii) specific time frames for resubmitting any such
written notice; and
``(iii) a process for tracking any actions that may be
taken by any party to the transaction, in connection with the
transaction, before the notice referred to in clause (ii) is
resubmitted.
``(B) Designation of agency.--The lead agency, other than
any entity of the intelligence community (as defined in the
National Security Act of 1947), shall, on behalf of the
Committee, ensure that the requirements of subparagraph (A)
with respect to any covered transaction that is subject to
such subparagraph are met.
``(3) Negotiation, modification, monitoring, and
enforcement.--
``(A) Designation of lead agency.--The lead agency shall
negotiate, modify, monitor, and enforce, on behalf of the
Committee, any agreement entered into or condition imposed
under paragraph (1) with respect to a covered transaction,
based on the expertise with and knowledge of the issues
related to such transaction on the part of the designated
department or agency. Nothing in this paragraph shall
prohibit other departments or agencies in assisting the lead
agency in carrying out the purposes of this paragraph.
``(B) Reporting by designated agency.--
``(i) Modification reports.--The lead agency in connection
with any agreement entered into or condition imposed with
respect to a covered transaction shall--

``(I) provide periodic reports to the Committee on any
material modification to any such agreement or condition
imposed with respect to the transaction; and
``(II) ensure that any material modification to any such
agreement or condition is reported to the Director of
National Intelligence, the Attorney General of the United
States, and any other Federal department or agency that may
have a material interest in such modification.

``(ii) Compliance.--The Committee shall develop and agree
upon methods for evaluating compliance with any agreement
entered into or condition imposed with respect to a covered
transaction that will allow the Committee to adequately
assure compliance, without--

``(I) unnecessarily diverting Committee resources from
assessing any new covered transaction for which a written
notice has been filed pursuant to subsection (b)(1)(C), and
if necessary, reaching a mitigation agreement with or
imposing a condition on a party to such covered transaction
or any covered transaction for which a review has been
reopened for any reason; or
``(II) placing unnecessary burdens on a party to a covered
transaction.''.

SEC. 6. ACTION BY THE PRESIDENT.

Section 721 of the Defense Production Act of 1950 (50
U.S.C. App. 2170) is amended by striking subsections (d) and
(e) and inserting the following:
``(d) Action by the President.--
``(1) In general.--Subject to paragraph (4), the President
may take such action for such time as the President considers
appropriate to suspend or prohibit any covered transaction
that threatens to impair the national security of the United
States.
``(2) Announcement by the president.--The President shall
announce the decision on whether or not to take action
pursuant to paragraph (1) not later than 15 days after the
date on which an investigation described in subsection (b) is
completed.
``(3) Enforcement.--The President may direct the Attorney
General of the United States to seek appropriate relief,
including divestment relief, in the district courts of the
United States, in order to implement and enforce this
subsection.
``(4) Findings of the president.--The President may
exercise the authority conferred by paragraph (1), only if
the President finds that--
``(A) there is credible evidence that leads the President
to believe that the foreign interest exercising control might
take action that threatens to impair the national security;
and
``(B) provisions of law, other than this section and the
International Emergency Economic Powers Act, do not, in the
judgment of the President, provide adequate and appropriate
authority for the President to protect the national security
in the matter before the President.
``(5) Factors to be considered.--For purposes of
determining whether to take action under paragraph (1), the
President shall consider, among other factors each of the
factors described in subsection (f), as appropriate.
``(e) Actions and Findings Nonreviewable.--The actions of
the President under paragraph (1) of subsection (d) and the
findings of the President under paragraph (4) of subsection
(d) shall not be subject to judicial review.''.

SEC. 7. INCREASED OVERSIGHT BY CONGRESS.

(a) Report on Actions.--Section 721(g) of the Defense
Production Act of 1950 (50 U.S.C. App. 2170(g)) is amended to
read as follows:
``(g) Additional Information to Congress;
Confidentiality.--
``(1) Briefing requirement on request.--The Committee
shall, upon request from any Member of Congress specified in
subsection (b)(3)(C)(iii), promptly provide briefings on a
covered transaction for which all action has concluded under
this section, or on compliance with a mitigation agreement or
condition imposed with respect to such transaction, on a
classified basis, if deemed necessary by the sensitivity of
the information. Briefings under this paragraph may be
provided to the congressional staff of such a Member of
Congress having appropriate security clearance.
``(2) Application of confidentiality provisions.--
``(A) In general.--The disclosure of information under this
subsection shall be consistent with the requirements of
subsection (c). Members of Congress and staff of either House
of Congress or any committee of Congress, shall be subject to
the same limitations on disclosure of information as are
applicable under subsection (c).
``(B) Proprietary information.--Proprietary information
which can be associated with a particular party to a covered
transaction shall be furnished in accordance with
subparagraph (A) only to a committee of Congress, and only
when the committee provides assurances of confidentiality,
unless such party otherwise consents in writing to such
disclosure.''.
(b) Annual Report.--Section 721 of the Defense Production
Act of 1950 (50 U.S.C. App. 2170) is amended by adding at the
end the following:
``(m) Annual Report to Congress.--
``(1) In general.--The chairperson shall transmit a report
to the chairman and ranking member of the committee of
jurisdiction in the Senate and the House of Representatives,
before July 31 of each year on all of the reviews and
investigations of covered transactions completed under
subsection (b) during the 12-month period covered by the
report.
``(2) Contents of report relating to covered
transactions.--The annual report under paragraph (1) shall
contain the following information, with respect to each
covered transaction, for the reporting period:
``(A) A list of all notices filed and all reviews or
investigations completed during the period, with basic
information on each party to the transaction, the nature of
the business activities or products of all pertinent persons,
along with information about any withdrawal from the process,
and any decision or action by the President under this
section.
``(B) Specific, cumulative, and, as appropriate, trend
information on the numbers of filings, investigations,
withdrawals, and decisions or actions by the President under
this section.
``(C) Cumulative and, as appropriate, trend information on
the business sectors involved in the filings which have been
made, and the countries from which the investments have
originated.
``(D) Information on whether companies that withdrew
notices to the Committee in accordance with subsection
(b)(1)(C)(ii) have later refiled such notices, or,
alternatively, abandoned the transaction.
``(E) The types of security arrangements and conditions the
Committee has used to mitigate national security concerns
about a transaction, including a discussion of the methods
that the Committee and any lead agency are using to determine
compliance with such arrangements or conditions.
``(F) A detailed discussion of all perceived adverse
effects of covered transactions on the national security or
critical infrastructure of the United States that the
Committee will take into account in its deliberations during
the period before delivery of the next report, to the extent
possible.
``(3) Contents of report relating to critical
technologies.--
``(A) In general.--In order to assist Congress in its
oversight responsibilities with respect to this section, the
President and such agencies as the President shall designate
shall include in the annual report submitted under paragraph
(1)--
``(i) an evaluation of 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
``(ii) an evaluation of 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
technologies.
``(B) Release of unclassified study.--All appropriate
portions of the annual report under paragraph (1) may be
classified. An unclassified version of the report, as
appropriate, consistent with safeguarding national security
and privacy, shall be made available to the public.''.

[[Page H7455]]

(c) Study and Report.--
(1) Study required.--Before the end of the 120-day period
beginning on the date of enactment of this Act and annually
thereafter, the Secretary of the Treasury, in consultation
with the Secretary of State and the Secretary of Commerce,
shall conduct a study on foreign direct investments in the
United States, especially investments in critical
infrastructure and industries affecting national security,
by--
(A) foreign governments, entities controlled by or acting
on behalf of a foreign government, or persons of foreign
countries which comply with any boycott of Israel; or
(B) foreign governments, entities controlled by or acting
on behalf of a foreign government, or persons of foreign
countries which do not ban organizations designated by the
Secretary of State as foreign terrorist organizations.
(2) Report.--Before the end of the 30-day period beginning
upon the date of completion of each study under paragraph
(1), and thereafter in each annual report under section
721(m) of the Defense Production Act of 1950 (as added by
this section), the Secretary of the Treasury shall submit a
report to Congress, for transmittal to all appropriate
committees of the Senate and the House of Representatives,
containing the findings and conclusions of the Secretary with
respect to the study described in paragraph (1), together
with an analysis of the effects of such investment on the
national security of the United States and on any efforts to
address those effects.
(d) Investigation by Inspector General.--
(1) In general.--The Inspector General of the Department of
the Treasury shall conduct an independent investigation to
determine all of the facts and circumstances concerning each
failure of the Department of the Treasury to make any report
to the Congress that was required under section 721(k) of the
Defense Production Act of 1950, as in effect on the day
before the date of enactment of this Act.
(2) Report to the congress.--Before the end of the 270-day
period beginning on the date of enactment of this Act, the
Inspector General of the Department of the Treasury shall
submit a report on the investigation under paragraph (1)
containing the findings and conclusions of the Inspector
General, to the chairman and ranking member of each committee
of the Senate and the House of Representatives having
jurisdiction over any aspect of the report, including, at a
minimum, the Committee on Foreign Relations, the Committee on
Banking, Housing, and Urban Affairs, and the Committee on
Commerce, Science, and Transportation of the Senate, and the
Committee on Foreign Affairs, the Committee on Financial
Services, and the Committee on Energy and Commerce of the
House of Representatives.

SEC. 8. CERTIFICATION OF NOTICES AND ASSURANCES.

Section 721 of the Defense Production Act of 1950 (50
U.S.C. App. 2170) is amended by adding at the end the
following:
``(n) Certification of Notices and Assurances.--Each
notice, and any followup information, submitted under this
section and regulations prescribed under this section to the
President or the Committee by a party to a covered
transaction, and any information submitted by any such party
in connection with any action for which a report is required
pursuant to paragraph (3)(B) of subsection (l), with respect
to the implementation of any mitigation agreement or
condition described in paragraph (1)(A) of subsection (l), or
any material change in circumstances, shall be accompanied by
a written statement by the chief executive officer or the
designee of the person required to submit such notice or
information certifying that, to the best of the knowledge and
belief of that person--
``(1) the notice or information submitted fully complies
with the requirements of this section or such regulation,
agreement, or condition; and
``(2) the notice or information is accurate and complete in
all material respects.''.

SEC. 9. REGULATIONS.

Section 721(h) of the Defense Production Act of 1950 (50
U.S.C. App. 2170(h)) is amended to read as follows:
``(h) Regulations.--
``(1) In general.--The President shall direct, subject to
notice and comment, the issuance of regulations to carry out
this section.
``(2) Effective date.--Regulations issued under this
section shall become effective not later than 180 days after
the effective date of the Foreign Investment and National
Security Act of 2007.
``(3) Content.--Regulations issued under this subsection
shall--
``(A) provide for the imposition of civil penalties for any
violation of this section, including any mitigation agreement
entered into or conditions imposed pursuant to subsection
(l);
``(B) to the extent possible--
``(i) minimize paperwork burdens; and
``(ii) coordinate reporting requirements under this section
with reporting requirements under any other provision of
Federal law; and
``(C) provide for an appropriate role for the Secretary of
Labor with respect to mitigation agreements.''.

SEC. 10. EFFECT ON OTHER LAW.

Section 721(i) of the Defense Production Act of 1950 (50
U.S.C. App. 2170(i)) is amended to read as follows:
``(i) Effect on Other Law.--No provision of this section
shall be construed as altering or affecting any other
authority, process, regulation, investigation, enforcement
measure, or review provided by or established under any other
provision of Federal law, including the International
Emergency Economic Powers Act, or any other authority of the
President or the Congress under the Constitution of the
United States.''.

SEC. 11. CLERICAL AMENDMENTS.

(a) Title 31.--Section 301(e) of title 31, United States
Code, is amended by striking ``8 Assistant'' and inserting
``9 Assistant''.
(b) Title 5.--Section 5315 of title 5, United States Code,
is amended in the item relating to ``Assistant Secretaries of
the Treasury'', by striking ``(8)'' and inserting ``(9)''.

SEC. 12. EFFECTIVE DATE.

The amendments made by this Act shall apply after the end
of the 90-day period beginning on the date of enactment of
this Act.

The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
New York (Mrs. Maloney) and the gentlewoman from Ohio (Ms. Pryce) each
will control 20 minutes.
The Chair recognizes the gentlewoman from New York.

General Leave

Mrs. MALONEY of New York. Mr. Speaker, I ask unanimous consent that
all Members have 5 legislative days within which to revise and extend
their remarks on this legislation and to insert extraneous material
thereon.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from New York?
There was no objection.
Mrs. MALONEY of New York. Mr. Speaker, I yield as much time as he may
consume to the chairman of the committee, Chairman Frank, from the
great State of Massachusetts.

{time} 1530

Mr. FRANK of Massachusetts. Mr. Speaker, I thank the gentlewoman for
her leadership on this bill.
This legislation began last year when she was the ranking member of
the Subcommittee on Domestic and International Monetary Policy, which
you, Mr. Speaker, now chair, and in a bipartisan way we've brought
forward this bill.
A brief history here. The administration, I think, made an error in
granting authority to the company, Dubai Ports World, to take over
seaports. They should have anticipated the reaction.
I think it was a mistake to let Dubai buy those ports and I'm glad
that that was dropped, but I think there was an overreaction. Foreign
direct investment is a very good thing for our country. It is a source
of jobs.
I remember when I first came here in the early 1980s one of our major
goals on the Democratic side, with a lot of Republican support, was to
get more foreign direct investment. We had a bill we called the
domestic content bill. It was to require that a certain percentage of
each car sold in America be made in America, and the purpose of that
was frankly to help get Japanese, at that time, automakers to come
here.
People should understand foreign direct investment means we're
talking direct investment as opposed to buying our bonds or buying
financial instruments. It means putting money in here that creates
jobs, and it ought to be something welcomed. In a few cases, there
could be a problem, but the general rule should be that we welcome
foreign direct investment.
Now, after the Dubai Ports and the reaction to it, concern grew in
the rest of the world that we were not fully supportive of foreign
direct investment, and there was this view that we had scared it away.
I mention that because there are some who have incorrectly reported
this bill, the CFIUS bill as we call it, the bill giving statutory
reform to the Committee on Foreign Investments in the U.S., as an
effort further to restrict foreign direct investment. That is the exact
opposite of the truth.
We've worked very closely here, not just with the Secretary of the
Treasury, Mr. Paulson, a great supporter of foreign direct investment,
but also with the Financial Services Forum headed by the former
Secretary of Commerce, Don Evans. He's been a real leader in this
effort.
This is an effort by the Congress to make clear that we welcome
foreign direct investment as a rule, but we will have procedures in
place to prevent those exceptional examples where it might be
problematic, where it might cause a security problem.
So I, again, want to stress this is the Congress of the United States
reaffirming that foreign direct investment is a good thing for our
economy, and it is our belief that the structure we have set up will
help move things quickly.
By the way, Mr. Speaker, people won't be required to go through the
CFIUS process, but they will be given assurance if they do that they
can go forward. Now, that's very important

[[Page H7456]]

for people making investments. So this is a wholly supportive
operation, and I thank the gentlewoman from New York and the
gentlewoman from Ohio who have worked hard on this; the minority whip,
the gentleman from Missouri, who is one of those who helped lead the
fight for this. This is a genuine bipartisan bill. We passed it last
year, and it's something that I know you will find it hard to believe,
Mr. Speaker, after we passed the bill, somehow the United States Senate
was unable to do that. I know that will cause some surprise to you, but
there we are.
This year, it's different. We passed the bill, and the Senate under
the leadership of the Senator from Connecticut, Mr. Dodd, has passed a
very similar bill, not identical, but they're close. I prefer in a few
details what we have, but given the nature of the legislative process,
we thought the best thing to do in consultation with the Secretary of
the Treasury and with both parties was to accept the Senate version.
So this is accepting the Senate version, but we're accepting the
Senate version of our version because what the Senate did was to make
some fairly small changes in the bill that we adopted last year.
Now, with that, Mr. Speaker, I'm ready to yield. My understanding is
that the chairman of the Armed Services Committee, who is concerned
about this bill, wanted to raise a technical point. So I would ask the
gentlewoman from New York if she would yield to the gentleman from
Missouri for the purposes of his and I having a colloquy.
Mrs. MALONEY from New York. Mr. Speaker, I yield to my distinguished
colleague, Ike Skelton, as much time as he may consume.
Mr. SKELTON. Mr. Speaker, I thank the gentlewoman.
I strongly support H.R. 556, and I voted for it when it first came
through House, passing by a vote of 423-0. I support the bill because
it will protect the critical technologies and the critical
infrastructure of this country by ensuring that these invaluable assets
remain in friendly and responsible hands. In so doing, it strengthens
our national security, and I think the bill makes many needed changes,
especially by adding homeland security and critical infrastructure as
essential elements to be considered for protection during national
security investigations, and also by adding opportunities for
congressional oversight in the process. In short, I'm in complete
agreement with the intent of this bill.
I've been working with the chairman, however, to try and clarify some
elements of the bill that may not make the intent of Congress fully
clear. I believe that it is the intent of the Congress in this
legislation to extend the current practice of seeking consensus in the
Committee on Foreign Investments in the United States. This practice
requires that transactions being reviewed and investigated by the
committee must satisfy the concerns of all the agencies involved.
I believe that it is also Congress' intent under this legislation
that the appropriate committees of the House, including all relevant
committees with a jurisdictional interest in the outcomes of specific
transactions under review, be kept informed by the executive branch.
And lastly, I believe that it's the intent of Congress in this
legislation to require the executive branch to monitor and enforce the
mitigation agreements imposed under this legislation to ensure
compliance and to regularly review compliance with these mitigation
agreements.
Mr. FRANK of Massachusetts. Mr. Speaker, if the gentleman would yield
to me, I would say that I share the chairman of the Armed Services
Committee's desire that the intent of Congress be clear. I also note
the chairman has identified a technical error in the Senate amendment
which should be corrected involving required reports of presidential
decisions. I will work to accomplish a correction of this error, and I
agree with the gentleman's statement of what the legislation intended
and in the specific incidents that he cited.
Mr. SKELTON. Well, I certainly thank the chairman. I agree that there
is a technical change required in the bill to ensure that Congress'
intent be followed. I note that one good opportunity for making this
technical and clarifying change to this bill will come during the
House-Senate conference on the National Defense Authorization Act for
fiscal year 2008. Will the chairman work with me to ensure that this
technical and clarifying change can be made to this bill, including
having it considered during the conference on the National Defense
Authorization Act?
Mr. FRANK of Massachusetts. If the gentleman would yield to me, I'm
glad to say, yes, I will work with the gentleman to ensure that this
technical and clarifying change is made, and I agree with him the best
way to do that is through the conference on the National Defense
Authorization Act.
And while this technically falls in the jurisdiction of the Financial
Services Committee, I am deviating from the script I was given to say
that I think the besetting sin of this place is an excessive concern
about turf. The people who put jurisdiction ahead of substance really
should think better.
So I am delighted to be able to provide an example of intercommittee
cooperation with my very good friend whom I admire, the gentleman from
Missouri, and I will look forward to his correcting this error in that
conference with the blessing, I believe, of our committee.
Mr. SKELTON. I thank my friend, my colleague from Massachusetts, and
I thank the gentlewoman for yielding.
Mrs. MALONEY of New York. Mr. Speaker, I reserve the balance of my
time and inquire how much time remains on my side.
The SPEAKER pro tempore. Twelve minutes.
Ms. PRYCE of Ohio. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I want to thank the gentlewoman from New York for the
time and also for her leadership on this issue. I rise today in strong
support of H.R. 556, and I want to thank Chairman Frank for building on
our work in the last Congress, bringing this bill up when I was a proud
sponsor, original sponsor, with Mrs. Maloney and Mr. Blunt and Mr.
Crowley of similar legislation that we passed in this House last
Congress, and I am proud to be an original sponsor of this legislation.
This has been a bipartisan effort and model for the way Congress should
operate all of time.
Mr. Speaker, as we now know and very few knew 18 months ago, CFIUS is
charged with assessing the safety and security ramifications of direct
foreign investment in the United States of America. The bill before us
reforms CFIUS to strike the right balance between ensuring national
security and open investment. 9/11 taught us that the number one
priority of this government is to do all they can do to assure our
citizens' security in their homeland.
Now, Dubai Ports World has left the front page and most people's
minds, but it's not forgotten. Congress heard and responded to the
immediate concerns voiced by Americans that we could not sell security
at our ports at any price. Today, we pass a bill that returns
accountability to a broken process, while ensuring job growth and
investment in our economy are not collateral damage.
Importantly, the bill we are considering maintains that of the House
bill that we introduced last March: increasing administration
accountability for the scrutiny of foreign investment transaction;
increasing congressional opportunities for oversight of that process;
increasing predictability for businesses negotiating the CFIUS process;
formalizing the Department of Homeland Security's role in CFIUS; and
creating a formal role for the Director of National Intelligence in
analyzing each proposed transaction.
Specifically, Mr. Speaker, the bill before us requires that the
Treasury Department and each agency directly involved in scrutinizing a
transaction sign a certification that goes directly to the Congress.
There's strong emphasis on analysis of every transaction by the
Director of National Intelligence, and time is given for all members of
the CFIUS committee to digest the analysis before making a decision on
a transaction. National security is put first in this process. Nothing
stands before it.
It should be noted that the administration has radically overhauled
the CFIUS process in the last 18 months

[[Page H7457]]

since the fiasco. This legislation is needed so there is no backsliding
and no further letting down of our guard.
And finally, Mr. Speaker, let me say we cannot wait any longer to
enact this legislation. We must send a clear signal to our trading
partners. There were concerns that some of the press reports on the
reform process gave other Nations the impression that we were going to
enact protectionist legislation instead of a bill that continued to
welcome foreign investment, which also means domestic job growth.
Trade does not take place in a vacuum. What we do here in the United
States affects the environment available to U.S. companies expanding
their global reach and the expansion of jobs here at home. Honda Motor
Corporation alone has made a $6.3 billion investment in my home State
of Ohio, employing over 8,500 people.
I mention this simply to say that we can't get to a point where
foreign direct investment is a dirty phrase. The United States remains
the world's largest recipient of direct foreign investment but by a
decreasing margin. China, which was just a blip on the screen 20 years
ago, is now a major competitor for foreign investment dollars. In June,
the Commerce Department reported that foreign direct investment into
U.S. businesses rose 77 percent in 2006, compared with a year earlier,
but remained less than half their peak level in 2000.
If the United States is going to attract the ideas, the people, the
capital and companies that will drive economic growth in the 21st
century, we need a CFIUS process that protects national security but
also keeps America an attractive and accessible place to do business
and invest.
I want to thank the many members, the chairman and ranking member
especially, who invested so much time and effort to get this process
right.
Mr. Speaker, I reserve the balance of my time.
Mrs. MALONEY of New York. Mr. Speaker, I yield myself as much time as
I may consume.
Mr. Speaker, I hope that my colleagues who voted for this bill
unanimously are as delighted as I am to see H.R. 556, the CFIUS reform
bill, once again on this floor, this time headed for the President's
desk.
Strengthening the system of review of foreign direct investment in
this country is, as this body has recognized repeatedly, an important
national and strongly bipartisan interest.
When the Dubai Ports World matter became front page news a year and a
half ago, most Americans had no idea that the Committee on Foreign
Investments in the United States existed or what it did.
The Dubai Ports World debacle made clear that the CFIUS process
needed strengthening and oversight, both to ensure that foreign
investment here does not jeopardize our national security in a post-9/
11 world and to encourage and support safe foreign investment in this
country to create jobs and boost our economy. This bill is designed to
accomplish both of these important goals.
As my colleagues will remember, one of the first bills passed by the
Financial Services Committee in this Congress and brought to the floor
was the original version of this legislation. I am delighted to say
that the Senate adopted our bill with very few changes, and it is back
here for final passage.

{time} 1545

This has been a long and consistently bipartisan effort in which
several Members played key roles and deserve special recognition.
I would like to especially thank Chairman Frank and the Democratic
leadership, Speaker Nancy Pelosi and Majority Leader Steny Hoyer, for
their support. They made this bill a priority and quickly moved it
forward for passage.
I also thank Minority Whip Roy Blunt for his work, both in this
Congress and in the last, in putting together a coalition to build
support for CFIUS reform. Congressman Joe Crowley and Congressman Luis
Gutierrez played a key role in that coalition, and I thank them.
My former colleague on the Monetary Policy Subcommittee,
Congresswoman Pryce of Ohio, worked with me to hold hearings on this
bill in the last Congress. Those hearings built on the seminal report
from the GAO on the weaknesses in the CFIUS process.
I also thank Congressman Thompson of Mississippi and Congressman King
of the Homeland Security Committee, who encouraged this bill from the
start.
I would like to thank those Members' staff, particularly Scott
Morris, Joe Pinder, Kevin Casey, Peter Freeman, Kyle Nehvins; my
subcommittee staff director, Eleni Constantine and Ed Mills for their
tireless work on this bill over the past 2 years.
I would also like to thank the Senate for moving forward promptly on
this key issue and for adopting our bill and our bill number.
In particular, I thank Chairman Dodd and Senator Shelby for their
bipartisan work in moving this forward and their staffs for the careful
dedication they gave to every detail of this legislation.
Finally, I would like to the thank Secretary Paulson, Deputy
Secretary Kimmitt, Undersecretary Steel and Assistant Secretary Lowery.
It is they and their successors who will ensure that the CFIUS process
works under Congress's oversight. I have appreciated the dialogue we
have had over the past 2 years on how the reforms we propose will be
implemented, and in some cases, they already have been.
This bill is necessary now more than ever. As the Wall Street journal
reported this week, a growing number of countries are imposing new
restrictions on foreign investment that go well beyond the strict focus
on national security concerns embodied in this legislation.
The story indicates that the new hostility to foreign acquirers
reflects a perception that the United States is erecting new barriers
to foreign capital. Today's legislation establishes in unequivocal
terms that this perception is false.
By strengthening and clarifying the national security review process
and maintaining a strict focus on national security, the CFIUS reforms
embodied in H.R. 556 clearly endorse the open investment policy of the
United States while enhancing our national security protections. In the
name of national security, the President can intervene in any
transaction, and, similarly, CFIUS can condition approval of a deal on
being able to reopen a review. But this bill provides clarity and
certainty for investors by requiring a finding by CFIUS that all other
remedies have been exhausted before CFIUS can reopen a review.
I would note that the certain and transparent CFIUS procedures in
this bill stand in stark contrast to actions by some foreign
governments where expropriations of assets have occurred arbitrarily
without justification and without recompense for U.S. investors. By
passing this bill, we continue our long-standing efforts to ensure that
U.S. investors are treated with the same certainty and fairness in
foreign markets as we give foreign investors in this bill.
This bill makes several necessary reforms. First, it creates CFIUS by
statute, so that its operations, membership and procedures have a sound
basis in law, and we are reviewable by Congress.
Second, it requires a full 45-day investigation of foreign government
investment, in addition to the 30-day review, which can only be waived
by the Secretary or the Deputy Secretary of Treasury. While many
foreign governments' transactions are harmless, they also pose certain
inherent risks. Governments have more assets and resources than private
sector participants and may have nonmarket motives.
Third, it requires review and sign-off on every transaction, by a
high-level official. When the Ports World deal became public, no senior
official could be found who knew about the approval before it happened.
The House bill required all approvals to be made by the Secretary or
Deputy Secretary. The Senate bill allows a Deputy Secretary to make a
decision, but it also mandates the creation of a special assistant
secretary at Treasury whose portfolio would be CFIUS matters. By
restricting the additional decision-making ability to one out of the
many assistant secretaries at the Treasury, this preserves the
accountability and high-level review that motivated the original
delegation provision.

[[Page H7458]]

Fourth, the bill requires reporting to Congress after the conclusion
of reviews. While we do not want to politicize the process of security
review, we also want to assure proper oversight.
Fifth, it creates and places and puts in place the importance of
review by the National Intelligence Director.
Six, it requires tracking of transactions that are withdrawn from the
process. Since deals are often withdrawn because they hit a snag in the
initial course of review, it is necessary to make sure that appropriate
steps are taken to prevent whatever potential risk was spotted.
For example, this was the case with a Smartmatic transaction that I
brought to the attention of Treasury last summer as a matter requiring
CFIUS review. As you may recall, press reports indicated that
Smartmatic, which had just bought the second largest voting machine
company in the United States, Sequoia Voting Systems, had ties to the
Venezuelan government.
I thought those allegations needed to be investigated by the body
with the power to really get into the tangled ownership of the company,
which is CFIUS. Under the broad and flexible definition of national
security that the bill puts in place, certainly the ownership of voting
machines is a potential national security issue.
A CFIUS review began of the deal. But before it was completed,
Smartmatic withdrew and agreed to sell Sequoia. Certainly, this is an
agreement that I would want CFIUS to track and make sure actually was
followed.
I think we have struck the right balance in this bill in protecting
the national security interests of our country, first and foremost, but
also providing a certain and clear procedure to encourage safe foreign
investment that will create jobs and boost the economy.
I urge my colleagues to once again give this bill their unequivocal
support and send it to the President with a bipartisan vote.
Mr. Speaker, I reserve the balance of my time.
Ms. PRYCE of Ohio. Mr. Speaker, I yield 4 minutes to my colleague and
good friend from the State of California, the ranking member on the
Armed Services Committee, Mr. Hunter.
Mr. HUNTER. I want to thank my colleague for yielding me some time
and for the good work that she has done on this bill, as well as my
good friend from New York.
Unfortunately, I oppose this bill for this reason: We passed out what
I think was a pretty good bill out of the House. That bill had in it
several critical national security elements. One of those elements was
that any member of this committee, of the CFIUS committee, including,
for example, the Secretary of Defense, or a leader in another agency,
could, by a single vote, trigger an investigation if they thought there
was a national security problem.
Remember, this bill grew out of the Dubai Ports problem. When we were
faced with this takeover of our port operations in a number of key
ports by a foreign-owned company, we realized that that company could
access information about vulnerable aspects of those particular ports
that could, at some point, be utilized in a terrorist activity.
So we understood, and that was a good illustration of how critical
this CFIUS process is, especially with this array of foreign
investments taking place in this country. So we understood that we
needed to reform CFIUS. In those days, during the Dubai Ports problem,
before that, you had an arrangement that was largely put together by
Presidential directive, and the President, by his directive, gave any
member of the CFIUS committee, including SecDef, the ability to raise
their hand and basically say, I want an investigation.
Now, we ensured that, as we put this thing together in statute, that
we maintained that right. I am turning to the House-passed provision
that we passed, that I supported. It talked about an investigation
being triggered by a roll call vote, and I am quoting, a roll call vote
pursuant to paragraph 3(a) in connection with a review under paragraph
1 of any covered transaction results in at least one vote by a
committee member against approving the transaction, meaning that the
Secretary of Defense could get up and say, I think there is a problem
here, and he could trigger that transaction.
Unfortunately, the product that came back from the Senate didn't have
that provision. It had this provision; it said that an investigation
would be triggered if ``the lead agency recommends and the committee
concurs that an investigation be undertaken.'' They have clearly
watered down the ability of one person, for example, the Secretary of
Defense, to say, to trigger an investigation upon his demand.
I think that's a fatal flaw, because that takes us back to a weaker
position than what we have had under the current practice, which
involves an investigation being undertaken if a single member of the
committee objects under the present Presidential directive. We are
actually going back to a lower standard for triggering an investigation
than we had before the Dubai ports problem.
So I think, unfortunately, we have taken a product from the Senate
which is fatally flawed in that respect. I would strongly support this
provision coming back, this exact same law, coming back with that fix.
But I don't know any way we can fix it, or even with a colloquy or in
any other way, assign a new congressional intent that will clearly
reflect that the words that have been changed aren't, in fact,
controlling at this point, but that there is a congressional intent
that controls.
Unfortunately, I have to object to the passage of this bill, and I
will not support the passage of this bill.
Mrs. MALONEY of New York. Mr. Speaker, I appreciate the gentleman's
hard work on this bill and his statements, but I would like to clarify
that CFIUS is a consensus body, so each member does and will continue
to have an effective veto. This bill does not affect that ability in
any way. Chairman Frank of the committee made that very clear in his
statements in committee and on the floor today.
Mr. Speaker, I include in the Record a list of important
organizations in our country, including the Chamber of Commerce, that
have issued letters and statements in support of this legislation.
July 10, 2007.
To the Members of the U.S. House of Representatives: On
behalf of the Financial Services Forum, a trade association
comprised of the CEOs of 20 of the largest and most
diversified financial institutions, I write in strong support
of H.R. 556, the ``Foreign Investment and National Security
Act of 2007.'' This bipartisan legislation would ensure that
proposed foreign investments in the U.S. meet national
security objectives while preserving an open, fair and non-
discriminatory investment environment.
Passage of this bill indicates to international investors
and trade partners that the U.S. remains open for foreign
investment and signals to other countries that they should
follow suit by keeping their doors open to U.S. foreign
direct investment.
The Forum believes that the legislation strikes the
appropriate balance between keeping Americans safe and
growing the economy. The included reforms make clear that
every Administration will devote time and resources to
foreign investment deals that require higher levels of
scrutiny, while allowing acquisitions that do not present
national security concerns to move forward swiftly.
Foreign direct investment supports employment for over 5
million Americans, who typically earn compensation well above
the national average. Investment from abroad supports 19% of
all U.S. exports. In 2005, a number of foreign-owned
companies reinvested $59 billion in profits back into the
U.S. economy. At a time when the competitiveness of the
United States is so important, H.R. 556 will help maintain
America's global advantage and grow the U.S. economy.
The Forum applauds the bipartisan leaders who worked
swiftly and productively to move this bill. H.R. 556 will
restore Congressional confidence in the CFIUS process and the
Forum urges Members to support this critically important
bipartisan bill.
Sincerely,

Robert S. Nichols,

President and COO,
The Financial Services Forum.
____

U.S. Chamber of Commerce,

Congressional and Public Affairs,

Washington, DC, July 9, 2007.
To the Members of the U.S. House of Representatives: The
U.S. Chamber of Commerce, the world's largest business
federation representing more than three million businesses
and organizations of every size, sector, and region, strongly
supports H.R. 556, the ``National Security Foreign Investment
Reform and Strengthened Transparency Act of 2007,'' which is
expected to be considered by the House under suspension of
the rules tomorrow. This bipartisan bill would make certain
that the process for vetting proposed foreign investments in
the

[[Page H7459]]

U.S. meets national security objectives while preserving an
open, fair, and non-discriminatory investment environment.
Passage of this bill sends the right signals to international
investors: that the U.S. is open for foreign investment and
that the nation's trade competitors should follow suit and
keep their doors open to U.S. foreign direct investment.
The Chamber believes that H.R. 556 strikes the appropriate
balance between keeping Americans safe and protecting the
economy. The proposed reforms to the Committee on Foreign
Investment in the United States (CFIUS) make clear that the
administration has the flexibility to devote time and
resources on foreign investment deals that require the most
attention to national security concerns, while allowing
acquisitions that do not present any national security
concerns to move forward without impediment.
Foreign direct investment supports employment for 5.1
million Americans, who typically earn compensation well above
the national average. Investment from abroad supports 19% of
all U.S. exports. In 2005, a number of foreign-owned
companies reinvested $59 billion in profits back into the
U.S. economy. Clearly, this bill will help maintain America's
competitive edge and continue to contribute positively to the
U.S. economic growth.
The Chamber applauds the bipartisan effort that resulted in
the completion of this bill. H.R. 556 will restore
congressional confidence in the CFIUS process. The Chamber
urges the House to support this critical bipartisan bill with
a strong affirmative vote. The Chamber will consider using
votes on, or in relation to, this issue in our annual How
They Voted scorecard.
Sincerely,
R. Bruce Josten.

Mr. Speaker, I reserve the balance of my time.
Ms. PRYCE of Ohio. Mr. Speaker, we have no other requests for time.
Let me close by addressing the concerns of my colleague that were just
raised. The reforms in many areas of this bill far outweigh the
compromise of the committee machinations that were made over in the
Senate.
Believe me, it is no small point, and it is one not lost on me. Our
product, I believe, is far superior. The Senate's, as the gentleman
points out, is weaker than ours.
But I believe that the colloquy between Chairman Frank and Chairman
Skelton will help us resolve that. Chairman Frank says it is the intent
of this Congress that there is a consensus on the CFIUS, and he agreed
to work with Chairman Skelton and the Defense Authorization Act to
correct this.
But taken as a whole, this bill is far superior than current law. It
must be enacted, and the sooner the better. Let me reiterate, the rest
of the world is watching us here today.
We are passing a balanced bill that does not forget the importance of
FDI to our economy, but it protects our ports and our homeland to the
extent that this Congress is able to do it.
I believe that we must act quickly. We have been stymied for a year
now. We can't afford to send the wrong message. It means that American
jobs will be lost, and we will be no safer for prolonging this process.
This bill protects our economy, but also the ultimate protection is to
our homeland. I urge passage of this bipartisan bill.
Mr. LANTOS. Mr. Speaker, I fully support H.R. 556, the Foreign
Investment and National Security Act of 2007.
Greater oversight is needed regarding foreign investment in the
United States, and I want to commend Chairman Frank and Mrs. Maloney
for the work they have done in bringing about this legislation. The
Committee on Foreign Affairs has significant jurisdictional interest in
this legislation, and I was very pleased at the manner in which our
committees have worked on H.R. 556 as it moved through the legislative
process.
Mr. Speaker, I want to call attention to two critical issues. First,
the treatment that the United States provides to foreign investors is
often not reciprocated to United States companies who wish to invest in
foreign markets, which threatens bilateral investment relations. The
procedures laid out in this bill for the interagency Committee on
Foreign Investments in the United States, or CFIUS, allow for a
responsible and fair assessment of foreign direct investment into the
United States. These procedures, however, 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 full and fair compensation for United States
investors.
Mr. Speaker, we must continue to seek to ensure that U.S. investors
are treated fairly in foreign markets, especially when a transaction
being evaluated by CFIUS is for a company whose primary place of
business is in a country that does not allow foreign direct investment
from the United States in the same business sector as that of the
covered transaction. In this way, we can seek to ensure that foreign
governments honor their commitments in international agreements and
provide for a fair and friendly investment climate for United States
companies. I am pleased that the gentlelady from New York agrees with
me on this score and that the House reports accompanying H.R. 556
address this important issue.
Second, the impact of foreign investments on national security must
be considered when reviewing foreign investments into the United
States. I am pleased that the Financial Services Committee recognizes
the seriousness of how transactions reviewed by CFIUS can impact our
national security. The Committee report on H.R. 556 makes clear that
Congress expects the acquisitions of U.S. companies, including energy
assets, by foreign governments or companies controlled by foreign
governments, will be reviewed closely for their national security
impact. I fully endorse this view and believe that the United States
must remain vigilant in protecting our national security interests.
Mr. Speaker, I urge my colleagues to support this legislation.
Mr. DINGELL. Mr. Speaker, I rise in support of H.R. 556, the
``Foreign Investment and National Security Act of 2007''. As our Nation
pursues the laudable dual goals of free and fair flows of capital and
trade in the global economy, it must remain ever vigilant of its own
security. Understanding this, H.R. 556 amends existing law to
strengthen the process by which the Federal Government performs
national security-related reviews of foreign investments in the United
States.
First and foremost, this bill establishes in statute the membership
of the Committee on Foreign Investment in the United States, CFIUS.
H.R. 556 broadens the factors that CFIUS must consider during reviews
of proposed foreign investments in the United States. This includes the
bill's express intent that critical energy infrastructure-related
aspects of national security not be ignored in the CFIUS review
process. I am particularly pleased with this provision, as well as the
establishment in the bill of adding both the Secretary of Energy and
the Secretary of Commerce as permanent members of CFIUS. In short, the
Committee on Energy and Commerce appreciates the emphasis laid by the
bill on issues that fall squarely within our jurisdiction.
Lastly, I note my support for the bill's requirement that the
Inspector General of the Department of the Treasury investigate why
that Department has not complied with reporting requirements related to
potential industrial espionage or coordinated strategies by foreign
parties with respect to U.S. critical technology, as is required under
current law. This underscores my strong belief that Congressional
oversight is a necessary component in assuring that the laws are
properly and thoroughly carried out by the Federal Government.
I do have concerns regarding what I believe are several shortcomings
in H.R. 556, when compared to the bill originally passed by the House
in February of this year. I am troubled that there is no provision to
designate vice chairmen of CFIUS--which, in the bill originally passed
by the House, would have been comprised of the Secretaries of Commerce
and Homeland Security--and instead replaces it with ``lead agencies,''
to which the responsibility for performing national security reviews
would now mainly be delegated. This has the lamentable consequence of
hindering the thorough participation of the Department of Commerce in
the CFIUS review process, something for which my colleagues on the
Subcommittee on Commerce, Trade, and Consumer Protection of the
Committee on Energy and Commerce advocated during their hearing on
CFIUS reform in July 2006.
Additionally, H.R. 556 now contains weaker provisions related to the
collection of evidence in national security reviews, the approval of
such reviews, as well as reporting requirements to the Congress about
them. For example, while H.R. 556 originally directed CFIUS to submit
reports to the Congress on all actions related to covered transactions,
the bill now only provides for reports to be submitted to the Congress
upon request. Also, I am alarmed that H.R. 556 no longer protects the
Federal Government from liability for losses incurred by parties during
CFIUS reviews. Such an omission may dissuade the Government from
prosecuting thorough reviews for fear of being sued for remuneration by
parties to CFIUS-covered transactions.
Although I have chided the bill for what I perceive to be its most
apparent weaknesses, I have always maintained that the desire for
perfect legislation should not impede the progress of good legislation.
I believe H.R. 556 is good legislation that will contribute to the
improvement of the CFIUS. I urge my colleagues to support the passage
of H.R. 556.
Mr. THOMPSON of Mississippi. Mr. Speaker, I stand here today as
Chairman of the

[[Page H7460]]

Committee on Homeland Security in support of H.R. 556, the Foreign
Investment and National Security Act of 2007. This bill provides
necessary reform by formalizing and streamlining the structure and
duties of the Committee on Foreign Investment in the United States,
CFIUS. This reform combines an understanding of the need for ensuring
that foreign investment in the U.S. is in the security interests of the
American public with an appreciation for global commerce in the 21st
century. Indeed, this bill addresses many of the concerns raised about
CFIUS over the past year, especially with regard to its current lack of
transparency and oversight. This bill rectifies these concerns by
formally establishing CFIUS and its membership, while also streamlining
how and when CFIUS review will be conducted. This bill sends an
important message to the country and the world: The United States will
continue to encourage the international flow of commerce in a manner
that demands the security of our country.
Mr. Speaker, the bill formalizes the CFIUS membership and requires
the following to serve: (1) Secretaries of Treasury, Homeland Security,
Commerce, Defense, State, and Energy; (2) Attorney General; Director of
National Intelligence (ex officio); and Secretary of Labor (ex
officio); and (3) The heads of any other executive department, agency,
or office, as the President determines appropriate, generally on a
case-by-case basis.
Under this bill, CFIUS will conduct a review of any transaction by or
with any foreign person which could result in the foreign control of
any person engaged in interstate commerce in the U.S. to determine the
effects of the transaction on the national security of the U.S. CFIUS
will determine whether to conduct an investigation of the effects of
the transaction on the national security of the U.S. if the initial
review of the transaction results in the determination that: The
transaction threatens to impair the national security of the U.S. and
that the threat has not been mitigated during or prior to the review of
the transaction; the transaction is a foreign government-controlled
transaction; the transaction would result in control of any critical
infrastructure of or within the U.S. by or on behalf of any foreign
person, if CFIUS determines that the transaction could impair national
security, and that such impairment to national security has not been
mitigated by assurances provided to CFIUS; or The lead agency
recommends, and CFIUS concurs, that an investigation be undertaken.

Mr. Speaker, I believe that our colleagues in the Senate made
remarkable contributions to this bill. For example, I think that its
determination to eliminate the option for CFIUS to conduct a second 45-
day review at the end of the investigation stage was a wise one. As a
result of this change, CFIUS will be required to be efficient and will
demonstrate our country's recognition of the importance of not
hampering foreign investment that avoids hindering our national
security. The Congressional Research Service's independent report, for
instance, found that, for all the merger and acquisition activity in
2005, 13 percent of it was from foreign firms acquiring U.S. firms.
This is up from 9 percent nearly 10 years before. This statistic shows
that foreign investment in the U.S. is vital to our economy.
I must mention, however, my concern with one of the changes to the
bill, as passed by my colleagues in the Senate, which eliminates an
important role of the Secretary of Homeland Security. Both bills
establish the Secretary of the Treasury as the Chairperson of CFIUS.
Whereas the original House-passed bill required that the Secretaries of
Homeland Security and Commerce be Vice Chairpersons of CFIUS, the
current bill eliminates the Vice Chairpersons and, instead, calls for
the Secretary of the Treasury to designate, as appropriate, a member or
members of CFIUS to be the ``lead agency or agencies'' on behalf of
CFIUS for each covered transaction, and for negotiating any mitigation
agreements or other conditions necessary to protect national security.
In addition, the lead agency or agencies will work on all matters
related to the monitoring of the completed transaction. The ``lead
agency'' role is particularly important because if the Secretary of the
Treasury and the head of the lead agency jointly determine that a
transaction will not impair the national security of the U.S. in
certain cases, then an investigation will not be required.
The Department of Homeland Security has played a vital role with
regard to CFIUS cases in the past and has an unparalleled institutional
understanding of such cases. In its involvement with such cases, it
represents the need to protect our homeland from attack and to ensure
that our critical infrastructure is protected and available to the
American public during, and in the aftermath of, an attack. In 2006,
the Department was involved in each of the 113 CFIUS filings and, in 15
instances, the Department requested mitigation agreements. Thus far in
2007, the Department has been involved in each of the 80 filings and
has requested five mitigation agreements. Furthermore, a large number
of these filings regard the ownership of critical infrastructure, which
is a major initiative of the Department. The Department's past
involvement with CFIUS and its mission to protect our country only
underscores its need to be second to none when CFIUS reviews cases.
That the Department no longer has a clearly articulated leadership role
in this process negates its understanding of such matters and undercuts
a developing expertise of this new Department. Once this bill is
enacted into law, I hope that the Secretary of the Treasury will
appoint the Department of Homeland Security as one of the lead agencies
in all CFIUS cases, unless there is an explicit reason to do otherwise.
The need to protect our homeland is too vital--and the Department's
role therein too intrinsic--for it to be left without a leadership
position in all CFIUS filings.
This bill, nevertheless, brings the necessary reform to the CFIUS
process. Incidents such as Dubai Ports World and China National
Offshore Oil Corporation's attempted bid for control of an oil company,
Unocal, raised an increased awareness regarding transactions that
should receive CFIUS review. Importantly, though, this bill does not
represent an isolationist reaction to these incidents but, instead,
balances the need for continued foreign investment in the U.S. with the
need to review that investment's impact on national security and our
critical infrastructure.
Only through this legislation will CFIUS have a formal budget,
membership, and a clear mission--protecting American security while
maintaining a free and growing economy.
In closing, let me thank my colleagues on the Financial Services
Committee for their leadership on this legislation, especially my
Democratic colleagues Chairman Frank as well as Representative Carolyn
Maloney and Representative Joseph Crowley of New York. I would also
like to thank my colleagues in the Senate.
I encourage my colleagues to pass this legislation with strong
bipartisan support.
Mr. RUSH. Mr. Speaker, I rise today in order to express the support
of the Committee on Energy and Commerce, and in particular the
Subcommittee for Commerce, Trade, and Consumer Protection, for H.R.
556, the ``Foreign Investment and National Security Act of 2007.'' This
bill makes much-needed reforms to the process by which the Committee on
Foreign Investment in the United States, hereafter: CFIUS, performs
national security-related reviews of potential foreign investments in
our country.
Since the DB World scandal, the Committee on Energy and Commerce has
been actively involved in efforts to reform CFIUS. Along with the
Committee on Financial Services and the Committee on (then)
International Relations, our Committee received referral of H.R. 5337,
the ``National Security Foreign Investment Reform and Strengthened
Transparency Act of 2006,'' in May 2006. Following a hearing by the
Subcommittee on Commerce, Trade, and Consumer Protection on H.R. 5337
in July 2006, the Committee on Energy and Commerce ordered the bill
reported. While H.R. 5337 was approved by the House, the Senate did not
take it up before the conclusion of the 109th Congress.
In January of this year, the Committee on Energy and Commerce again
received referral of a CFIUS reform bill, this time H.R. 556, the
``National Security Foreign Investment Reform and Transparency Act of
2007.'' In the interest of expediting House passage of this bill, our
Committee agreed to waive its right to mark up H.R. 556, provided that
the final bill include provisions for the establishment of a vice
chairmanship of CFIUS, additional CFIUS reporting requirements to the
Congress, and that the Inspector General of the Treasury Department
investigate that Department's failure to report on potential industrial
espionage or coordinated strategies by foreign countries with respect
to U.S. critical technology. This understanding--intended for the
express purpose of strengthening Congressional oversight of the CFIUS
review process--is reflected in an exchange of letters between the
Committee on Financial Services and Committee on Energy and Commerce,
which itself is part of the record of the bill's initial House debate.
Given our jurisdictional stake and strong interest in CFIUS reform,
the Committee on Energy and Commerce is pleased that the House will
vote today on H.R. 556. This bill is the culmination of over a year's
effort to improve the process by which our government reviews potential
foreign investment in the United States for national security risks.
While my Committee does offer its support of H.R. 556, we would note
that our support is tempered by concerns with deficiencies in the
Senate amendments to the bill. My good friend and colleague, Chairman
Dingell, discusses these concerns in greater detail in a statement
which has been inserted into the Record. Given this, the Subcommittee
on Commerce, Trade, and Consumer Protection fully intends to monitor
the implementation of this new law. We feel, nevertheless, that the
bill makes a meaningful contribution to the reform of the CFIUS review

[[Page H7461]]

process and would urge our colleagues to vote for its passage.
Mr. MANZULLO. Mr. Speaker, I am particularly pleased that we are this
point in the legislative process to send to the President's desk a
bipartisan, bicameral reform of the Committee on Foreign Investment in
the United States, CFIUS, process. I first became interested in CFIUS
reform when a Chinese state-owned enterprise was in competition with a
private Italian and a Canadian firm to purchase a very sensitive
machine tool division of Ingersoll Milling. The Chinese eventually
decided not to attempt to buy the very sensitive machine tool division
of Ingersoll but were able to purchase the non-sensitive production
line division, which saved hundreds of jobs. It came up again when IBM
decided to sell its personal computer division to Lenovo, partially
owned by the Chinese government. It emerged again when the China
National Offshore Oil Company, CNOOC, another Chinese state-owned
enterprise, was ready to outbid a private firm to acquire Unocal.
Let me make clear that I am a strong supporter of foreign direct
investment into the United States. U.S. subsidiaries of foreign
companies employ 5.1 million Americans, of which 31 percent are in the
manufacturing sector; have a payroll of $325 billion; and account for
19 percent of all U.S. exported goods. Foreign direct investment in the
U.S. is important because in many cases it provides capital to purchase
companies in the U.S. where there is no domestic financing or interest,
thus saving thousands of U.S. jobs. Many foreign companies retained
numerous firms and jobs in the northern Illinois district I am proud to
represent including Ingersoll Machine Milling (Italy) and Ingersoll
Cutting Tools (Israel) in Rockford; Nissan Forklift (Japan) in Marengo;
Eisenmann Corporation (Germany) in Crystal Lake; and Cadbury-Schweppes
(United Kingdom), which owns the Adams confectionary plant in Loves
Park. In fact, Illinois is fifth in the United States in terms of the
number of employees supported by U.S. subsidiaries of foreign companies
per State.
The House is now prepared to send a comprehensive CFIUS reform bill
to the President because of the legitimate concern over a year ago of
Dubai Ports (DP) World's proposed acquisition of the London-based
Peninsular and Oriental Steam Navigation Company (P&O) management
operations of 27 terminals at 6 major U.S. ports east of the
Mississippi River. Many Americans were legitimately concerned about the
national security implications of this deal. However, it was often
overlooked that DP World is a state-owned enterprise, owned by the
royal family of Dubai. What does it mean for our national interest when
foreign governments acquire private sector companies in America?
In the P&O case, the New York Times reported on February 24, 2006
that this sale came down to a ``battle between two foreign, state-
backed companies''--DP World and PSA, which is part of the investment
arm of the Singapore government. ``The acquisition price (for P&O)
reflects the advantage that a number of the fastest growing companies
enjoy--their government's deep pockets.'' Here is the key, Mr.
Speaker--``DP World paid about 20 percent more (for P&O) than analysts
thought the company was worth. Publicly traded companies that were
potential bidders were scared off long before DP World's final offer.''
You would think this would be a factor in the CFIUS decisionmaking
process, particularly after Congress in 1992 required a 45-day review
process for acquisitions by state-owned enterprises in reaction to the
proposed sale of LTV's missile division to Thomson-CSF, the American
subsidiary of a French firm that was then 58 percent owned by the
French Government. Yet, CFIUS initially declined to subject the DP
World's proposed acquisition of P&O through the additional 45-day
review process until pressured by Congress.
I am pleased that H.R. 556 incorporates my main suggestion to mandate
all proposed acquisitions of U.S. assets by a foreign state-owned
enterprise undergo the more rigorous additional 45-day review process.
The free market cannot work if foreign governments subsidize the
purchase of U.S. assets. H.R. 556 will make absolutely crystal clear
that in every case where there is a proposed acquisition by a foreign
state-owned enterprise, it will undergo heightened scrutiny to ensure
that there is no hidden agenda by a foreign government that could
undermine our national security. We owe it to our constituents to make
sure that foreign governments do not undermine our open free market
system as a tool to advance their national interests. I congratulate
the Chairmen and Ranking Members in both Houses of Congress for working
together to produce a bill that will merit the President's signature. I
urge my colleagues to support H.R. 556.
Mr. SHAYS. Mr. Speaker, as a cosponsor of H.R. 556, I am pleased we
are considering the Senate amendment to this legislation, which passed
the House earlier this Congress by an overwhelming bipartisan vote.
This legislation will require congressional notification for cases sent
to second-stage reviews and automatically subjects all transactions
involving foreign state-owned companies to a second-stage 45-day
investigation.
Last year, the attempt by Dubai Ports World, a port operations
company owned by the government of the United Arab Emirates, to
purchase operating terminals at 6 U.S. ports was a clear indicator the
CFIUS process was in dire need of reform.
Whenever a foreign investment affects our homeland security, it
deserves greater scrutiny. It seems to me this legislation strikes the
proper balance between strengthening our economy and protecting the
American people.
Mr. Speaker, I urge my colleagues to support this legislation and
move this bill to the President for his signature.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise today in strong
support, and as a proud co-sponsor of H.R. 556, the bipartisan National
Security FIRST Act of 2007. This bill will ensure that never again will
the Congress and people of the United States be taken by surprise at
the discovery that an administration may have endangered the nation's
security by authorizing the acquisition of critical American
infrastructure by an entity owned or controlled by foreign government
with interests inimical to the United States.
Mr. Speaker, recall how outraged Americans were in January 2006 when
we learned of the Bush administration's secret approval of the Dubai
Ports World deal. That is when it was disclosed that the secretive
Committee on Foreign Investment in the United States (CFIUS) had
approved a port deal sought by Dubai Ports World--with only minimal
review--despite the deal's national security implications. Dubai Ports
World is a company owned by the government of the United Arab Emirates
(UAE).
The Dubai port deal would have resulted in the company managing
terminal operations at six major U.S. ports, including the Port of
Houston in my own congressional district. But that is not all. As the
facts began to dribble out, we learned that the CFIUS had not initiated
a 45-day national security investigation--despite the fact that UAE had
links to 9/11 and notwithstanding the fact the Department of Homeland
Security had raised security concerns. It was only in response to the
overwhelming disapproval, criticism, and anger of the American people
and the Congress that Dubai Ports World announced in early March 2006
that it was divesting itself of these U.S. port operations, effectively
killing the deal.
Mr. Speaker, although this was a happy outcome it did not obscure the
material fact that the CFIUS process was fundamentally flawed. This is
because despite the national security implications, the Bush
administration lawfully had approved the Dubai Ports World deal with
only minimal review--and with no notification to the Congress.
It is also clear from the record that the Bush administration only
gave the Dubai port deal a cursory look before approving it. The
secretive CFIUS approved the plan with little review, in only 30 days,
and without the 45-day national security investigation that should have
been conducted. Further, the CFIUS approval was made by mid-level
officials. The senior-level decisionmakers in the administration--
including the Secretary of the Treasury, the Secretary of Homeland
Security, and the President of the United States--were not involved in
the decisionmaking process and learned of it only from media reports.
In addition, no Member of Congress was informed of the secretive
approval by CFIUS of the port deal--with Members also learning about
the deal in press reports.
Mr. Speaker, as a senior member of the Committee on Homeland
Security, I participated in hearings that uncovered the weaknesses in
the CFIUS regulatory framework and cosponsored bipartisan legislation
in the 109th Congress that would have corrected these deficiencies.
That bill, H.R. 5337, passed the House 424-0 but the Republican
congressional leadership in the last Congress could not get together
with the Senate to produce and present to the President a bill he would
sign.

We rectify that failure today. H.R. 556 strengthens national security
by reforming the interagency Committee on Foreign Investment in the
United States (CFIUS) process by which the Federal Government reviews
foreign investments in the United States for their national security
implications.
The bill requires CFIUS to conduct a 30-day review of any national
security-related business transaction. After a 30-day review is
conducted, CFIUS would be required to conduct a full-scale, 45-day
investigation of the effects the business transaction would have on
national security if the committee review determines that the
transaction threatens to impair national security and these threats
have not been mitigated during the 30-day review. The statutory 45-day
review is also triggered if the committee review determines that the
transaction involves a foreign government-controlled entity and the
CFIUS chairman and

[[Page H7462]]

vice chairman are unable to certify it poses no threat to the national
security. Finally, the 45-day review is required if the Director of
National Intelligence (DNI) identifies intelligence concerns with the
transaction that he concludes could threaten national security, and
these threats have not been mitigated during the 30-day review. The
bill also contains numerous other provisions to strengthen the CFIUS
review process.
Mr. Speaker, I support H.R. 556 for four important reasons. First, it
subjects transactions involving foreign governments to a stricter level
of scrutiny. Second, the bill provides for senior-level accountability
for CFIUS decisions. Third, the bill improves CFIUS accountability to
Congress. Finally, H.R. 556 strengthens the CFIUS review process by
establishing a formal role for intelligence assessments for every
transaction. I will briefly discuss each of these important procedural
improvements.
Mr. Speaker, as I indicated earlier, the Dubai Ports World deal was
approved by mid-level officials and without a 45-day national security
investigation of the transaction, even though Dubai Ports World was
owned by a foreign government. H.R. 556 strengthens current law by
requiring in cases involving a company that is controlled by a foreign
government, a non-delegable certification by either (1) the chairman of
CFIUS (the Secretary of the Treasury) or the vice-chairman of CFIUS
(the Secretary of Homeland Security) that the transaction poses no
national security threat. In the absence of this non-delegable
certification, a second-stage 45-day national security investigation of
the transaction must take place.
Next, H.R. 556 ensures senior level accountability for CFIUS
decisions by requiring the chairman and vice chairman of CFIUS to
approve all transactions where CFIUS consideration is completed within
the 30-day review period (limiting delegation of approval authority to
the Under Secretary level); and requires that the President approve all
transactions that have also been subjected to the second-stage 45-day
national security investigation.
H.R. 556 improves CFIUS accountability to Congress. As was noted
above, Members of Congress were not notified of the CFIUS approval of
the Dubai Ports World deal. This bill rectifies this failure by
requiring CFIUS to report to the congressional committees of
jurisdiction within 5 days after the final action on a CFIUS
investigation, and permits the committees to request one detailed
classified briefing on the transaction. The bill also requires CFIUS to
file semi-annual reports to Congress that contain information on
transactions handled by the committee during the previous 6 months.
Last, H.R. 556 strengthens the CFIUS review process by establishing a
formal role for intelligence assessments for every transaction. The
bill requires that every transaction be subjected to an assessment by
the Director of National Intelligence (DNI) and contains provisions to
ensure that the DNI has adequate time to conduct the required
assessment.
All in all, Mr. Speaker, H.R. 556 represents an important
contribution to our effort to secure the homeland. Last November, the
American people voted for change, they voted for competence, they voted
for a new direction for our country. I am proud to say that with H.R.
556, the new majority has once again delivered on its promise to chart
a new direction to make America safer and more secure.
I urge all Members to join me in supporting H.R. 556.
Ms. PRYCE of Ohio. Mr. Speaker, I yield back the balance of my time.
Mrs. MALONEY of New York. Mr. Speaker, I yield back the balance of my
time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from New York (Mrs. Maloney) that the House suspend the
rules and concur in the Senate amendment to the bill, H.R. 556.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mrs. MALONEY of New York. Mr. Speaker, on that I demand the yeas and
nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this question will
be postponed.

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