CFIUS Head, Lawmakers Discuss Expanding CFIUS Reach
The Committee on Foreign Investment in the U.S. is open to working with lawmakers on a bill that could block China, Russia, Iran and North Korea from investing in American land or agricultural companies, said Paul Rosen, the head of CFIUS. While Rosen didn’t explicitly endorse the Promoting Agriculture Safeguards and Security Act, suggesting that CFIUS would need more resources if its jurisdiction were broadened, he said the legislation raises valid concerns.
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“This is a very important issue, and I want to work with you to figure out how we can address it,” Rosen told Sen. Jon Tester, D-Mont.,who helped introduce the bill earlier this year (see 2303010036).
Tester, speaking during a Senate Banking Committee hearing last week, said the bill has strong bipartisan support, but he doesn’t want to move forward unless he knows CFIUS would be able to enforce it. Not only would the legislation expand the scope of deals CFIUS would be required to review, but it would also add the USDA secretary as a permanent member of the committee. “I don't want to write something that sounds good, put good press releases out,” Tester said, “but it really doesn't do anything because we don't have the enforcement agency to do it.”
Rosen said much of CFIUS’ ability to review more investments would depend on the final scope of the bill. “If we brought in every single investment,” he said, “that would be a different consideration than targeting the investments” that present a specific national security concern. Tester said he isn’t sure “how much land is being bought right now in this country” from China, Russia, Iran and North Korea and therefore isn’t sure how much CFIUS’ scope would increase, “but we've got to figure this out before it gets to be a crisis.”
He added that certain foreign investments in American agriculture are a “huge problem, whether it's for laundering money or whether it's for national security, or whether it's food security. It's all the same thing. And if we could get your help, we might be able to get a piece of legislation that actually functionally works.”
Rosen said: “What I can commit to you is: I'm willing to go with this issue with you and figure it out and work toward a solution.”
Sen. Kevin Cramer, R-N.D., stressed the importance of adding USDA to CFIUS, suggesting that would help make “food supply chains” a higher priority for the committee. He said it was “very frustrating to watch” the committee decide last year not to intervene in China-based Fufeng Group's attempted purchase of North Dakota farmland near Grand Forks Air Force Base (see 2212150035 and 2302070028), calling the situation a “nightmare.”
Rosen declined to comment on the Fufeng case but told Cramer that USDA is already heavily involved in many CFIUS reviews. The agency, even though it’s not a permanent member, has “full visibility into the case filings, they have visibility into the materials, they're regularly involved in our regular CFIUS meetings, and they have an opportunity to not just participate but lead, just like a permanent member would.”
“So the process that we have set up ensures, from my perspective, that we do not leave any food security, or agricultural issues as it relates to national security, unresolved,” Rosen said.
Cramer also suggested that CFIUS expand the list of military bases that fall under the committee’s jurisdiction. Although the Treasury Department proposed last month to add eight military bases to the list, including Grand Forks (see 2305040052), Cramer suggested that CFIUS should have jurisdiction over foreign investments near all American military bases.
“It seems to me that if we start designating certain bases as more sensitive than other bases, we might, in essence, be signaling to the enemy where our priorities are,” Cramer said. “Wouldn't it make sense to just apply that more broadly to all of our military and defense installations?”
Rosen said Congress was “very intentional” when it wrote the committee’s mandate “not to blanket the United States with real estate jurisdiction.” He also said he gives “great deference” to the Defense Department in deciding which military bases should fall under CFIUS jurisdiction. “But these are certainly important questions, they're hard questions, and I'm happy to continue working with you.”
Cramer suggested he would support expanding CFIUS’ reach. “When it comes to land itself, whether it's agricultural or otherwise, it's not like we're going to grow more. I don't think we're going to take over Alberta or anything,” he said. “It just seems like it's such a precious commodity that maybe we should just consider more restrictions.”