The Trump administration proposed new regulations on Tuesday to toughen national security reviews of foreign investments in US companies involved in technology and infrastructure.
The proposed regulations seek to implement a 2018 law that gave an inter-agency review panel known as the Committee on Foreign Investment in the United States, or CFIUS, greater authority to examine foreign transactions. The new rules expand the timeline and scope of covered transactions, including certain real estate deals involving foreign persons and sensitive data.
“Today’s proposed regulations will provide clarity and certainty to investors regarding CFIUS’s enhanced authorities to address national security risks that arise from certain foreign investments, and continue modernising the CFIUS process,” treasury secretary Steven Mnuchin said in a statement.
The proposed rules would apply to investments in US businesses with critical technology subject to export controls or other regulations, as well as emerging technologies that the commerce department will identify, according to a senior treasury official.
Critical infrastructure includes telecommunications, energy and transportation, and sensitive personal data includes geolocation, financial or health-related information that may be exploited at the risk of national security, including data related to targeted populations such military personnel, the official said.
The rules also target real estate deals involving or near specific airports, maritime ports and military installations, but they generally don’t focus on transactions involving single housing units or most real estate in urban areas, the official said.
The regulations do not target any particular country, the official said. A limited list of exempted countries is expected to be published when the rule is published in February.
Last year, President Donald Trump scuttled a proposed takeover of US chip maker Qualcomm by Broadcom, citing the national security concerns flagged by CFIUS. The prior September, Trump blocked the sale of Lattice Semiconductor to a Chinese-backed investor, and at least half a dozen other technology deals have collapsed under scrutiny from the panel during the president’s first term.
The treasury department will be accepting written comments on the proposed regulations through to 17 October, and is obligated by law to implement a final version of the new rules by 13 February next year. — Reported by Justin Sink and Mark Niquette, (c) 2019 Bloomberg LP