P.L. 110-49, The National Security Foreign Investment Reform and Strengthened Transparency Act of 2007

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H.R. 556 would ensure national security while promoting foreign investment and the creation and maintenance of jobs, it would reform the process by which such investments are examined for any effect they may have on national security, and it would establish the Committee on Foreign Investment in the United States.

Detailed Summary

National Security Foreign Investment Reform and Strengthened Transparency Act of 2007 - (Sec. 2) Amends the Defense Production Act of 1950 to direct the President, acting through the Committee on Foreign Investment in the United States (CFIUS), when receiving written notification of a possible merger, acquisition, or takeover which could result in foreign control of any person engaged in interstate commerce (covered transaction), upon receiving a request from CFIUS, a committee member acting on behalf of CFIUS, or upon the President's own initiative to review such covered transaction to determine its effects on national security. Requires CFIUS to investigate a covered transaction which it determines is a foreign government-controlled transaction. Permits any party to any covered transaction to initiate a review of a covered transaction by submitting a written notice of the transaction to CFIUS.

Directs the President, acting through CFIUS, to conduct an investigation of the effects of certain covered transactions on national security and to take any necessary steps to protect national security, if a review of a covered transaction results in a determination that: (1) the transaction threatens to impair national security and that threat has not been mitigated or the transaction is a foreign government-controlled transaction; (2) a CFIUS roll call vote on any covered transaction results in at least one vote by a Committee member against approving the transaction; or (3) the Director of National Intelligence identifies particularly complex intelligence concerns that could threaten to impair national security of the United States and CFIUS members were not able to develop and agree upon measures to mitigate satisfactorily those threats during the initial review. Provides that, notwithstanding clause (2), an investigation of a foreign government-controlled transaction will not be required under this paragraph if the Secretary of the Treasury, the Secretary of Homeland Security, and the Secretary of Commerce determine, on the basis of the review, that the transaction will not affect the national security of the United States and no agreement or condition is required, with respect to the transaction, to mitigate any threat to the national security.

Requires such investigations to be completed within 45 days (with an extension in limited cases). Requires, for any review or investigation of a covered transaction to be treated as final, approval by a majority roll call vote of CFIUS members and the signatures of of the Secretaries the Treasury, Homeland Security, and Commerce. Requires, in the case of any CFIUS roll call vote in connection with an investigation of any foreign government-controlled transaction in which there is at least one vote by a Committee member against approving the transaction, the investigation shall not be treated as final or complete until the findings and report resulting from such investigation are signed by the President, in addition to the Chairperson and the Vice Chairpersons of CFIUS. Requires that, in the case of a covered transaction in which a party is a person of a country the government of which has repeatedly provided support for acts of international terrorism, no review or investigation will be considered final until the results are approved and signed by the President.

Requires the DNI to conduct an analysis of any threat to national security posed by a covered transaction.

(Sec. 3) Establishes CFIUS as a multi-agency statutory committee and revises the membership of such committee. Authorizes appropriations.

(Sec. 4) Makes the consideration of specified factors in evaluating a covered transaction mandatory (currently, discretionary with the President). Adds to the list of such factors whether the covered transaction: (1) has a security-related impact on U.S. critical infrastructure; (2) has potential effects on U.S. efforts to curtail human smuggling and drug smuggling; (3) is a foreign-government-controlled transaction; and (4) such other factors as the President determines appropriate.

(Sec. 5) Exempts the United States from liability for any losses or other expenses incurred by any party to a covered transaction as a result of any review or investigation after a covered transaction has been consummated if, before consummating the transaction, the party did not submit a written notice of the transaction to the CFIUS, did not wait until the completion of any review or investigation, or until 15 days after an investigation is completed.

(Sec. 6) Authorizes CFIUS to: (1) enter into agreements with parties to a covered transaction to mitigate any threat to national security; and (2) designate one or more lead federal agencies to negotiate, modify, monitor, and enforce such agreements. Requires designated agencies to provide periodic reports to CFIUS on the implementation of any agreements or conditions.

Establishes a method of tracking transactions which are withdrawn from the review or investigation process and a process for setting interim protections to address specific national security concerns relating to such transactions.

Requires CFIUS to develop methods for evaluating compliance with any agreement entered into or condition imposed with respect to a covered transaction.

(Sec. 7) Requires: (1) CFIUS reports to Congress after completed investigations; (2) congressional briefing on a covered transaction, or on compliance with a mitigation agreement or condition, if requested by a Member of Congress; and (3) annual CFIUS reports to appropriate congressional committees on all reviews and investigations conducted. Requires specific report information with respect to possible foreign acquisition of U.S. companies involved in the research, development, or production of critical technologies.

Requires the Secretary of the Treasury to: (1) annually study investments in the United States, especially investments in critical infrastructure and industries affecting national security by foreign governments or their agents which comply with any boycott of Israel or which do not ban foreign terrorist organizations; and (2) report each study's results to Congress.

Directs the Inspector General of the Treasury to: (1) conduct an independent investigation of each failure of the Department of the Treasury to make any report to Congress required by CFIUS; and (2) report to the appropriate congressional committees on investigation results.

(Sec. 8) Requires the certification of information submitted by a party to a covered transaction.

(Sec. 11) Makes the amendments made by this Act effective 90 days after enactment.

Status of the Legislation

Latest Major Action: 7/11/2007: Resolving differences -- House actions. Status: On motion that the House suspend the rules and agree to the Senate amendment Agreed to by the Yeas and Nays: (2/3 required): 370 - 45 (Roll no. 614).

Points in Favor

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Points Against

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