Tighter foreign investment oversight put in U.S. Senate must-pass bill

WASHINGTON (Reuters) – A U.S. Senate panel has put a measure to tighten oversight of foreign investment in the United States into a must-pass defense policy bill, a Senate committee said on Thursday.

The measure seeks to strengthen the Committee on Foreign Investment in the United States (CFIUS), a government agency that reviews potential foreign investment to ensure it does not compromise national security.

Among other changes, the new rules would allow CFIUS to expand the definition of which deals may be reviewed and to review purchases of vacant land if they were near a sensitive U.S. facility, like a military base.

The CFIUS legislation is aimed at preventing China or other unfriendly countries from acquiring U.S. technology or data about Americans via investment in U.S. companies.

It is one of a series of measures being considered by the White House and Congress to address what it sees as China’s unfair trade and market access practices. Others include potential tariffs on goods ranging from aluminum to automobiles, and efforts to prevent the growth in the United States of Chinese telecommunications companies Huawei and ZTE (HK:).

The defense policy bill – the National Defense Authorization Act – is a ‘must-pass’ act, one of the few measures that Congress reliably votes into law.

The CFIUS measure was not put in the version of the bill that was passed earlier on Thursday by an overwhelming margin in the House of Representatives.

The two versions will be combined and voted on later in the year. Provisions included in one version often survive that process and become law.

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