Foreign Investment Risk Review Modernization Act of 2018

Floor Speech

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Mr. HECK. Mr. Speaker, I thank the ranking member. I do indeed rise to engage in a colloquy with the gentleman from Kentucky.

The bill we are considering today, unlike the Senate CFIUS bill, does not have specific language dealing with board seats. That notwithstanding, Chairman Barr and I share an understanding that the language of the bill that covers ``involvement, other than through voting shares, in the substantive decision-making of the United States business'' gives CFIUS jurisdiction over investments which would confer membership or observer rights or the right to nominate someone from the board of directors or equivalent governing body of a business.

I ask my friend to confirm that understanding.

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Mr. HECK. I yield to the gentleman from Kentucky.

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Mr. HECK. Mr. Speaker, I thank the gentleman for this exchange.

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Mr. HECK. Mr. Speaker, I thank the ranking member for yielding.

Mr. Speaker, I rise in support of this legislation which is urgently needed. Our adversaries and competitors are indeed actively exploiting gaps in our existing CFIUS process, which I would argue has not been materially modernized in 30 years, and there are gaps.

Right now, purchases of land near our most sensitive national security installations which are purchased to facilitate espionage go unreviewed unless there happens to be an existing business on that site.

Investments that could give our strategic competitors influence and insights into our critical technology or the critical infrastructure our country relies on go unreviewed because they fall just short of control of a company.

Rights changes that can confer control of a company even without new equity being contributed are not clearly within CFIUS jurisdiction.

There is a gap between CFIUS' existing authority over joint ventures involving a whole U.S. business and the export control system's authority over individual pieces of technology and know-how.

Good news. We close these gaps in this bill.

I appreciate deeply the willingness of Chairmen Hensarling and Barr to work to ensure this legislation effectively addresses investments that could expose details of critical technology or critical infrastructure to our strategic competitors and to incorporate other improvements suggested by our national security committees.

Frankly, however, as is no secret, I think there are some other changes that I would like to have had made. For example, the Senate and the original House bill contained delegation authority to help manage an increased workload and more senior officials to oversee the CFIUS process.

I also continue to believe that the blacklist used in the House bill will ultimately be too easy for our adversaries to evade. Compared to the approach taken by the Senate bill and the original House legislation, the blacklist is also kind of a missed opportunity, I think, to encourage our allies and partners to establish their own CFIUS-like mechanisms compatible with ours because the truth is, we are no safer if we block our competitors from buying a capability here but they buy it from one of our allies or partners. That all said, this is a very important step forward.

Mr. Speaker, I am glad to stand before you today and urge your support on what I believe is a critical issue of national security. I am equally glad to express my deep appreciation to the ranking member and to the chairmen, both Mr. Hensarling and Mr. Barr, and to my friend, Robert Pittenger.

Last statement of the obvious warning, none of us is any better than the quality of our staff. I want to acknowledge that I have been very ably assisted on this matter for the better part of a year by Erik Ashida of my staff. He has been with me 6 years.

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Mr. HECK. Mr. Speaker, he is leaving staff because he has been admitted to the extremely prestigious SAIS program, School of Advanced International Studies at Johns Hopkins University. I know each of us has experiences who have been here any length of time, when you have had a young person be with you for many, many years, it creates a sense of loss when they finally decide to take that next step. I am only able to do this because I know that as ably as he has served the people of the 10th Congressional District in our State from which he is from, I know with equal confidence that he will continue to serve America upon completion of his graduate program. He has been the point person in my office working with Members' offices, and I am deeply appreciative to him for all of his service.

Mr. Speaker, I urge the Members of this House to endorse and to support this very important national security measure.

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