Foreign Investment Risk Review Modernization Act of 2018

Floor Speech

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Mr. BARR. Will the gentleman yield?

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Mr. BARR. Mr. Speaker, I thank the gentleman for yielding, and I especially thank the gentleman for his cooperative, constructive, and bipartisan approach to the legislation, and improving the legislation.

We are in agreement on this point, that such involvement could cover activity, including membership on the board of directors and observer rights. In addition, the gentleman makes note of board nominations. As we have seen under current law, CFIUS looks at nominations and the risks that may arise from them. The Broadcom deal was a case in point. However, the language in this bill makes this jurisdiction clearer.

The gentleman is right to focus on risks that a board member may pose who is acting on behalf of a foreign investor who nominates the member. The whole point of such nominations could be to involve the foreign investor in substantive decision-making in a way that results in national security risks.

H.R. 5841 could cover such a scenario. I thank the gentleman for yielding.

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Mr. BARR. Mr. Speaker, I rise today in support of the Foreign Investment Risk Review Modernization Act.

I want to thank the House authors of this bill, particularly the gentleman from North Carolina (Mr. Pittenger), for his outstanding leadership on this effort; and my friend, the gentleman from Washington (Mr. Heck); also the Senate authors, Senator Cornyn and Senator Feinstein; and House Chairman Hensarling, Chairman Royce, Chairman Nunes, Chairman Thornberry, and Chairman Walden; as well as House leadership for their efforts in bringing this nonpartisan legislation to the floor.

Just by that list, you understand how complex this issue is because it involves not only a multiagency effort of this government, it requires the concerted and cooperative efforts of many committees in this House and in Congress generally because of the shared jurisdiction.

In 2016, new foreign direct investment added $894 billion in value to the U.S. economy. Today, 6.8 million American workers are employed by international companies, including 20 percent of U.S. manufacturing workers.

In my own district in Kentucky, Toyota Motor Manufacturing, Kentucky, Inc. supports 8,500 jobs as a result of benign foreign direct investment, a great example of this. These are typically higher paying jobs. So it is critical that we preserve in the United States an open investment climate, to the extent possible, consistent with national security objectives.

But a comprehensive update to both the export control regime and the Committee on Foreign Investment in the United States, or CFIUS as is it commonly called, is needed due to the massive surge in malign investments by the Chinese and other bad actors in U.S. assets.

This legislation closes loopholes in CFIUS' jurisdiction and modernizes our process for identifying critical technologies without duplicating agency efforts like earlier drafts of this legislation called for, all the while ensuring these transactions are thoroughly vetted in a timely manner so that America continues to attract much- needed foreign investment that does not implicate national security.

This legislation also authorizes CFIUS to review sensitive, noncontrolling investments in critical technology or infrastructure made by persons affiliated with countries of special concern or threatening actors.

These changes improve upon previous versions of the bill that failed to focus CFIUS' limited resources on the most serious threats and bad actors, including China.

Importantly, this legislation grants CFIUS the authority to review the acquisition of real estate near U.S. military installations and other important national security assets. The legislation uses a new and strengthened interagency export control process to review joint ventures and outbound activities. I want to thank Chairman Royce for his leadership on that point.

These reforms strike the right balance between bolstering national security and ensuring strong economic growth. I encourage my colleagues to support the legislation.

Ms. MAXINE WATERS of California.

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Mr. BARR. Mr. Speaker, this effort has been a success because we are balancing the imperatives of national security with maintaining an important open investment climate in the United States. Why that balance is so important is because preserving benign foreign direct investment and capital so that research and development in the United States can flourish is important not only to preserve our competitive edge in the global economy, it is important for national security.

Our economic strength contributes to our national security. We are striking the right balance with this new FIRRMA legislation.

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