In an age of globalization and an internationalized defense industrial base, safeguarding national security while maintaining an open investment climate is a challenge. This is where the Committee on Foreign Investment in the United States (CFIUS) comes in, which is chaired by the Treasury Department rather than the Pentagon.
CFIUS reviews foreign investment for its national-security implications, with a traditional definition of a national-security threat as foreign acquisition of any sole domestic supplier with defense contracts. This is in line with the 1988 Exon Florio Amendment to the Defense Production Act of 1950, and the concern here is defense dependence and a cutoff of supply by a foreign actor.
However, under President Donald Trump’s administration, national security has been more broadly defined with the passage of the 2018 Foreign Investment Risk Review Modernization Act (FIRRMA) targeting Chinese investments. While in the past CFIUS evaluated national-security concerns from proposed “merger, acquisition or takeover” of US companies by foreign entities that could “control” the company, now the jurisdiction has cast a wide net to include most economic transactions.

No comments:
Post a Comment
Note: Only a member of this blog may post a comment.