[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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