Washington, D.C.   -  U.S. Rep. Phil English (R-Pa.) hailed today’s House action on bipartisan legislation to strengthen the national security review process and reform the current functions of the Committee on Foreign Investment in the United States (CFIUS).  English cosponsored the bill, H.R. 566, the National Security Foreign Investment Reform and Strengthened Transparency (FIRST) Act of 2007 which passed the House floor by a vote of 423 to 0.

“In a post 9/11 world, Congress must enact policies that protect America’s security without discouraging legitimate foreign investment which creates jobs,” English said.  “Today, the House acted on balanced legislation that will achieve this goal and reform the operations of CFIUS.”

The lack of Congress’ ability to perform oversight over CFIUS was brought to light last April when the Committee failed to raise red flags regarding the sale of operations of six American seaports by  Peninsular & Oriental Steam Navigation Company (P&O) of London, England, to Dubai Ports World, a government owned company from the United Arab Emirates.  In response, the U.S. House of Representatives passed comprehensive legislation to provide more transparency and accountability to the process by which CFIUS reviews foreign direct investment.  Unfortunately, the Senate failed to act before the 109th Congress concluded.

Today, the U.S. House of Representatives once again acted on the CFIUS reform legislation that passed the House chamber last year.  The National Security FIRST Act of 2007 would strengthen and reform the CFIUS process by: establishing a mandatory 45-day investigation for all acquisitions involving foreign governments; requiring CFIUS to consult the Director of National Intelligence; establish automatic congressional notification after each investigation; and require the Treasury and Homeland Security Secretaries or Deputy Secretaries to sign off on all approvals.

“Overall, this is a common sense bill that protects the interests of the American people while ensuring transparency and a thorough public review of any pending foreign investment transactions.  It is my hope that the Senate will act swiftly on legislation and send it to the president’s desk for signature,” English said.

Summary of the legislation follows: 

H.R. 556 - National Security FIRST Act
    
A tough bill that reforms the CFISU process to improve national security - but neither creates new burdens on or hurdles for normal business acquisitions nor creates new diplomatic or business problems for the U.S.
  
REAFFIRMS CONGRESSIONAL INTENT RE: "BYRD RULE"
• Mandatory 45-day investigation for companies controlled by foreign governments.

RESTORES ACCOUNTABILITY TO THE PROCESS
• Establishes CFIUS in statute, adds DHS and Dept. of Commerce as vice chair
• Signature of chair and vice chair(s) on all decisions
• Adds Dept. of Energy to CFIUS:  Other members include: Treasury, DHS, DOC, DOD, DOS, AG, CEA, USTR, OMB, NEC, Dir of Office of Science and Tech. Policy, NS Advisor
• Develops a regular-order process for notifying CFIUS, withdrawals from the process, extension of investigation (requires roll-call votes of 2/3 of Committee), and sends decision to President with the dissenting vote of any single Committee member
• Dedicates specific funding to the process to make sure that reviews are not abbreviated for lack of resources, in or outside of Treasury.
• Establishes a formal review of any transaction by the Director of National Intelligence.
• Establishes a formal method for tracking post-transaction compliance with mitigation agreements and for tracking any post-transaction changes in such agreements.
• Gives formal enforcement authority for compliance with such agreements to DOJ.
• Assures an objective review of a proposal, followed by certain notification of responsible Presidentially appointed officials.

IMPROVES CONGRESSIONAL OVERSIGHT
• Notice to appropriate committees at start of every review or investigation.
• Report to appropriate committees at end of review, with option to request secure briefing.
• Mandatory briefings to appropriate (and specifically HIRC, House Financial Services and House Energy and Commerce) committees after all investigation
• Thorough and regular (semi-annual) reporting to Congress on activities of Committee with trend analysis of foreign investments.

ADDED CERTAINTY AND PREDICTABILITY FOR BUSINESS
• Regular-order certainty in consideration of applications-maintains objectivity
• Statutory protection of proprietary business information
• Certainty on the potential for any extensions
• Clarifies that any dissenting vote by any CFIUS member during the review stage triggers an investigation
• The option to skip review period, going directly to an investigation (only with CFIUS approval)
• The certainty that the Administration and Congress will not be blindsided by a proposal that otherwise is unobjectionable.

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