- The Washington Times - Wednesday, May 10, 2006

House lawmakers yesterday introduced a bill that would require the White House to consult with Congress more closely when foreign companies invest in the U.S.

But the legislation would limit changes in regulations governing foreign investment in the U.S., following a more business-friendly approach than the Senate version written immediately after the DP World dust-up.

DP World earlier this year purchased a London company that ran operations at several U.S. ports. The deal was approved by the Committee on Foreign Investment in the U.S. (CFIUS), a panel of executive branch officials led by the Treasury Department. Congressional opposition to the deal forced the United Arab Emirates company to promise that it would sell its U.S. holdings to an American operator.

“It’s no secret we are responding to the obvious gaps we saw in the system with the ports deal,” said House Majority Whip Roy Blunt, Missouri Republican and sponsor of the bill.

CFIUS is required to investigate all foreign investments with national security implications. Since 1998, it has been notified of 1,625 mergers and investigated 27 of them.

The proposed House law would require CFIUS to investigate all purchases of U.S. assets when the investor is controlled by a foreign government. It also would force the Treasury Department to notify Congress at the conclusion of all investigations, a step that business groups fear could lead to congressional meddling in commercial transactions.

But the notification requirement is less stringent than a Senate bill that would require CFIUS to keep Congress informed of ongoing investigations.

“We continue to have concerns with certain aspects of the bill, including the unprecedented notification and reporting requirements which increase the risk of politicizing transactions,” a coalition led by the U.S. Chamber of Commerce, the Financial Services Forum and other business groups said of the Senate bill.

Rep. Joseph Crowley, New York Democrat and a co-sponsor of Mr. Blunt’s bill, called the Senate bill an “overreach.”

“This compromise bill depoliticizes the process,” he said.

The House bill also would hold accountable the Treasury and Homeland Security secretaries for all CFIUS decisions, allow the director of national intelligence to weigh in on CFIUS deliberations and dedicate more funding to CFIUS — $10 million over four years.

Business groups offered a muted response.

“The reform package must be balanced and constructive so it does not place unnecessary, damaging and counterproductive restrictions on foreign investment,” the chamber and other business groups said.

Several high-profile deals are likely to undergo CFIUS scrutiny in the coming weeks, including proposed mergers between French telecommunications giant Alcatel and Lucent Technologies, and Japanese conglomerate Toshiba and Westinghouse Electric Co.

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