Peters, Colleagues Introduce Bill to Strengthen Foreign Investment Review Process, Safeguard National Security

WASHINGTON, DC – U.S. Senator Gary Peters (MI) today joined his colleagues in introducing bipartisan legislation to authorize heightened scrutiny on the flow of sensitive U.S. technology to foreign countries that may be investing in American companies to gain a military advantage. The Foreign Investment Risk Review Modernization Act (FIRRMA) would modernize and strengthen the review process by which the Committee on Foreign Investment in the United States (CFIUS) approves acquisitions, mergers, and other foreign investments in the United States. The CFIUS review process has not been modernized in nearly a decade, and gaps in the current process have allowed foreign adversaries to weaponize their investment in U.S. companies and transfer sensitive dual-use U.S. technologies, many of which have potential military applications.  

“Michigan is leading the way in the development of cutting-edge, innovative technologies that will revolutionize the way we get around, as well as our military’s battlefield capabilities. It is vital that these technologies are protected from transactions that could pose a threat to national security by eroding America’s technological advantages,” said Senator Peters, a member of the Senate Homeland Security and Armed Services Committees. “I’m pleased to join my colleagues in introducing this bipartisan legislation, which will allow Michigan businesses to keep innovating while eliminating loopholes that could allow adversarial countries circumvent national security checks.”

CFIUS is an interagency committee tasked with reviewing foreign investments in the U.S. and determining whether or not such investments pose a risk to national security. Because of the outdated review process, foreign investment-driven technology transfers have jeopardized the United States’ ability to maintain our historical military advantage and have, in turn, weakened our defense industrial base.

During Senate Armed Services Committee hearings earlier this year, Peters questioned national security leaders, including Secretary of Defense James Mattis, Director of National Intelligence Dan Coats, and National Security Agency Director and Commander of U.S. Cyber Command, Michael Rogers, on the importance of updating CFIUS. All three leaders agreed on the need to reassess and update the CFIUS review process.

The Foreign Investment Risk Review Modernization Act (FIRRMA) would address 21st century national security concerns, like investment-driven technology transfers designed to sidestep the Committee’s limited jurisdiction. Specifically, FIRRMA would:

• Expand the CFIUS jurisdiction to include certain joint ventures, minority position investments, and real estate transactions near military bases or other sensitive national security facilities;

• Update the Committee’s definition of “critical technologies” to include emerging technologies that could be essential for maintaining the U.S. technological advantage over countries that pose threats, such as China;

• Allow foreign investors to submit “light filings” to CFIUS for certain types of transactions;

• Add new national security factors for CFIUS to consider in its analyses;

• Authorize CFIUS to assess and collect filing fees to be used to ensure it has the resources to conduct more extensive reviews of transactions; and

• Authorize CFIUS to exempt certain otherwise covered transactions if all foreign investors are from a country that meets certain criteria, such as being a U.S. treaty ally and having a mutual investment security arrangement.

Peters introduced the bill with U.S. Senators John Cornyn (R-TX), Dianne Feinstein (D-CA), Richard Burr (R-NC), Marco Rubio (R-FL), Amy Klobuchar (D-MN), John Barrasso (R-WY), James Lankford (R-OK), Joe Manchin (D-WV) and Tim Scott (R-SC).