The Committee on Foreign Investment in the United States (CFIUS) Page: 2 of 38
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The Committee on Foreign Investment in the United States (CFIUS)
The Committee on Foreign Investment in the United States (CFIUS) is comprised of nine
members, two ex officio members, and other members as appointed by the President representing
major departments and agencies within the federal executive branch. While the group generally
has operated in relative obscurity, the proposed acquisition of commercial operations at six U.S.
ports by Dubai Ports World in 2006 placed the group's operations under intense scrutiny by
Members of Congress and the public. Prompted by this case, some Members of the 109th and
110th Congresses questioned the ability of Congress to exercise its oversight responsibilities given
the general view that CFIUS's operations lack transparency. Other Members revisited concerns
about the linkage between national security and the role of foreign investment in the U.S.
economy. Some Members of Congress and others argued that the nation's security and economic
concerns have changed since the September 11, 2001, terrorist attacks and that these concerns
were not being reflected sufficiently in the Committee's deliberations. In addition, anecdotal
evidence seemed to indicate that the CFIUS process was not market neutral. Instead, a CFIUS
investigation of an investment transaction may have been perceived by some firms and by some
in the financial markets as a negative factor that added to uncertainty and may have spurred firms
to engage in behavior that may not have been optimal for the economy as a whole. On July 12,
2016, Senator Charles Grassley introduced S. 3161 to include the Secretary of Agriculture as a
permanent member of the CFIUS and to include the national security impact of foreign
investments on agricultural assets as part of the criteria the Committee uses in deciding to
recommend that the President block a foreign acquisition.
In the first session of the 110' Congress, the House and Senate adopted S. 1610, the Foreign
Investment and National Security Act (FINSA) of 2007. On July 11, 2007, the measure was sent
to President Bush, who signed it on July 26, 2007. It is designated as P.L. 110-49. On January 23,
2008, President Bush issued Executive Order 13456 implementing the law. The Executive Order
also established some caveats that may affect the way in which the law is implemented. These
caveats stipulate that the President will provide information that is required under the law as long
as it is "consistent" with the President's authority "to (i) conduct the foreign affairs of the United
States; (ii) withhold information the disclosure of which could impair the foreign relations, the
national security, the deliberative processes of the Executive, or the performance of the
Executive's constitutional duties; (iii) recommend for congressional consideration such measures
as the President may judge necessary and expedient; and (iv) supervise the unitary executive
branch." Despite the relatively recent passage of the amendments, some Members of Congress
and others have questioned the performance of CFIUS and the way the Committee reviews cases
involving foreign governments, particularly with the emergence of direct investments through
sovereign wealth funds (SWFs). The Obama Administration issued a statement on June 30, 2011,
supporting an open investment policy, a commitment to treat all investors in a fair and equitable
manner, and support for business investment from sources both home and abroad in the economy.
On September 28, 2012, President Obama used the authority granted to him under FINSA to
block an American firm, Ralls Corporation, owned by Chinese nationals, from acquiring a U.S.
wind farm energy firm. On October 31, 2013, the Obama Administration launched a new
initiative, known as Select USA, to attract more foreign direct investment to the United States.
According to the Administration, the aim of the program is to make attracting foreign investment
as important a component of U.S. foreign policy as promoting exports.
Congressional Research Service
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Jackson, James K. The Committee on Foreign Investment in the United States (CFIUS), report, August 12, 2016; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc1020755/m1/2/: accessed June 19, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.