Representative Royce Co-Authors U.S. Foreign Investor "Warning" Bill

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Representative Royce Co-Authors U.S. Foreign Investor "Warning" Bill

Representatives Ed Royce (R-CA) and Brad Sherman (D-CA), the ranking member and chairman of the Terrorism, Nonproliferation and Trade Subcommittee (Foreign Affairs Committee), have introduced legislation designed to give U.S. foreign investors greater protection. The legislation requires that the State Department produce each year a report on the business and investment climates in foreign countries. The Secretary of State is to report on unfair business and investment practices in foreign countries that have harmed U.S. businesses and investment. The report is also to include measures that the U.S. government is taking to prevent such unfair practices.

"This bill is a reality check to the State and Commerce Departments' hyping of foreign economies, especially China. U.S. businesses are given rosy scenarios by these Departments, they invest, get in trouble, and too often are left on the side-of-the road," Royce said.

The legislation also requires the Secretary of State to develop a system to issue "investment warnings" for countries with which the U.S. has significant economic relations. A warning would alert investors to "long-term, protracted conditions that make a country's business or investment climate risky or potentially dangerous to members of the United States business community and United States investors." The State Department has long maintained a warning system for U.S. travelers.

This legislation, expected to be referred to the Subcommittee for consideration, stems from a hearing it held last July, "Aiding American Businesses Abroad: Government Action to Help Beleaguered American Firms and Investors." That hearing featured testimony by Nancy Weinstein, CEO and Founder of Nancy's Lifestyles, a southern-California-based high-end furniture retailer. Ms. Weinstein testified to the Subcommittee about how an unscrupulous landlord and complicit local police in Shanghai have cost her millions of dollars in a foreign investment nightmare. She criticized the U.S. Consulate (State Department) in Shanghai's advocacy on her behalf.

At that hearing Representative Royce said, "If our Government is going to provide commercial service, it ought to give accurate and prominent warnings about China and elsewhere, and fight darn hard when there is a problem like [Ms. Weinstein's]."

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