Exon-Florio National Security Test for Foreign Investment [Updated April 8, 2008]   [open pdf - 156KB]

"The Exon-Florio provision grants the President the authority to block proposed or pending foreign acquisitions of 'persons engaged in interstate commerce in the United States' that threaten to impair the national security. This provision came under intense scrutiny with the proposed acquisitions in 2006 of major operations in six major U.S. ports by Dubai Ports World and of Unocal by the China National Offshore Oil Corporation (CNOOC). The debate that followed reignited longstanding differences among Members of Congress and between the Congress and the administration over the role foreign acquisitions play in U.S. national security. The public debate underscored the differences between U.S. policy, which is to actively promote internationally the national treatment of foreign firms, and the concerns of some over the way this policy applies to companies that are owned by foreign governments that have unlimited access to the Nation's industrial base. Much of this debate focuses on the activities of a relatively obscure committee, the Committee on Foreign Investment in the United States (CFIUS) and the Exon-Florio provision, which gives the President broad powers to block certain types of foreign investment. In the first session of the 110th Congress, Congresswoman Maloney introduced H.R. 556, the National Security Foreign Investment Reform and Strengthened Transparency Act of 2007, on January 18, 2007. [...] On January 23, 2008, President Bush issued Executive Order 13456 implementing the law. [...] the President will provide information that is required under the law as long as it is 'consistent' with the President's authority 1) to conduct the foreign affairs of the United States; 2) withhold information that would impair the foreign relations, the national security, the deliberative processes of the Executive, or the performance of the Executive's constitutional duties; or the President's ability to supervise the unitary executive branch."

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CRS Report for Congress, RL33312
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