Foreign Investment and National Security Act of 2007

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Foreign Investment and National Security Act of 2007

Strengthens examination requirements of the Committee on Foreign Investment in the United States

The Foreign Investment and National Security Act of 2007 passed less than one year after a controversy over the effort by Dubai Ports World to acquire London-based Peninsular & Oriental Steam Navigation, an international ports operating firm that would have given Dubai control of operations in up to 22 U.S. ports. At the time, the Bush administration received criticism for allowing the United Arab Emirates firm to manage security at U.S. ports. The Act directs the executive branch to review business transactions to determine their affect on national security.

The Foreign Investment and National Security Act of 2007 requires the executive branch to do the following:

The President must investigate the effects of certain business transactions on national security and to take necessary steps to protect national security. Although prior law had given the president the authority to evaluate transactions at his discretion, the bill would create specific factors for evaluation of a transaction.

The Director of National Intelligence must conduct an analysis of any threat to national security posed by such transactions. [5]

The Secretary of Treasury must study investments in critical U.S. infrastructure or businesses related to national security by foreign governments and others that comply with boycotts of Israel or which do not ban foreign terrorist organizations in particular.

In instances where the president moved to scrutinize a transaction further, the newly-formed Committee on Foreign Investment in the United States (CFIUS) must review the transaction to determine its effects on national security. Any review or investigation would need to be approved by a majority roll call vote of CFIUS members and be signed by the Secretaries of Treasury, Homeland Security and Commerce. A transaction could be withdrawn from a review if a written request from any party to the transaction was approved in writing by the chair and vice chair of CFIUS, but discussion on the deal could continue. The president could also return to a previously reviewed transaction if a party submitted false or misleading material information to CFIUS relating to the review or investigation of if any party to the deal breached a mitigation agreement (if the breach was considered intentional).

The bill had been called the National Security Foreign Investment Reform and Strengthened Transparency Act of 2007 while in Congress.

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