50 USC 4565 - Authority to review certain mergers, acquisitions, and takeovers

U.S Code last checked for updates: Nov 22, 2024

§ 4565.

Authority to review certain mergers, acquisitions, and takeovers

(a)

Definitions

In this section:

(1)

Clarification

(2)

Committee; chairperson

(3)

Control

(4)

Covered transaction

(A)

In general

Except as otherwise provided, the term “covered transaction” means—

(i)

any transaction described in subparagraph (B)(i); and

(ii)

any transaction described in clauses (ii) through (v) of subparagraph (B) that is proposed, pending, or completed on or after the effective date set forth in section 1727 of the Foreign Investment Risk Review Modernization Act of 2018.

(B)

Transactions described

A transaction described in this subparagraph is any of the following:

(i)

Any merger, acquisition, or takeover that is proposed or pending after August 23, 1988, by or with any foreign person that could result in foreign control of any United States business, including such a merger, acquisition, or takeover carried out through a joint venture.

(ii)

Subject to subparagraphs (C) and (E), the purchase or lease by, or a concession to, a foreign person of private or public real estate that—

(I)

is located in the United States;

(II)

(aa)

is, is located within, or will function as part of, an air or maritime port; or

(bb)

(AA)

is in close proximity to a United States military installation or another facility or property of the United States Government that is sensitive for reasons relating to national security;

(BB)

could reasonably provide the foreign person the ability to collect intelligence on activities being conducted at such an installation, facility, or property; or

(CC)

could otherwise expose national security activities at such an installation, facility, or property to the risk of foreign surveillance; and

(III)

meets such other criteria as the Committee prescribes by regulation, except that such criteria may not expand the categories of real estate to which this clause applies beyond the categories described in subclause (II).

(iii)

Any other investment, subject to regulations prescribed under subparagraphs (D) and (E), by a foreign person in any unaffiliated United States business that—

(I)

owns, operates, manufactures, supplies, or services critical infrastructure;

(II)

produces, designs, tests, manufactures, fabricates, or develops one or more critical technologies; or

(III)

maintains or collects sensitive personal data of United States citizens that may be exploited in a manner that threatens national security.

(iv)

Any change in the rights that a foreign person has with respect to a United States business in which the foreign person has an investment, if that change could result in—

(I)

foreign control of the United States business; or

(II)

an investment described in clause (iii).

(v)

Any other transaction, transfer, agreement, or arrangement, the structure of which is designed or intended to evade or circumvent the application of this section, subject to regulations prescribed by the Committee.

(C)

Real estate transactions

(i)

Exception for certain real estate transactions

A real estate purchase, lease, or concession described in subparagraph (B)(ii) does not include a purchase, lease, or concession of—

(I)

a single “housing unit”, as defined by the Census Bureau; or

(II)

real estate in “urbanized areas”, as defined by the Census Bureau in the most recent census, except as otherwise prescribed by the Committee in regulations in consultation with the Secretary of Defense.

(ii)

Definition of close proximity

(D)

Other investments

(i)

Other investment defined

For purposes of subparagraph (B)(iii), the term “other investment” means an investment, direct or indirect, by a foreign person in a United States business described in that subparagraph that is not an investment described in subparagraph (B)(i) and that affords the foreign person—

(I)

access to any material nonpublic technical information in the possession of the United States business;

(II)

membership or observer rights on the board of directors or equivalent governing body of the United States business or the right to nominate an individual to a position on the board of directors or equivalent governing body; or

(III)

any involvement, other than through voting of shares, in substantive decisionmaking of the United States business regarding—

(aa)

the use, development, acquisition, safekeeping, or release of sensitive personal data of United States citizens maintained or collected by the United States business;

(bb)

the use, development acquisition, or release of critical technologies; or

(cc)

the management, operation, manufacture, or supply of critical infrastructure.

(ii)

Material nonpublic technical information defined

(I)

In general

For purposes of clause (i)(I), and subject to regulations prescribed by the Committee, the term “material nonpublic technical information” means information that—

(aa)

provides knowledge, know-how, or understanding, not available in the public domain, of the design, location, or operation of critical infrastructure; or

(bb)

is not available in the public domain, and is necessary to design, fabricate, develop, test, produce, or manufacture critical technologies, including processes, techniques, or methods.

(II)

Exemption for financial information

(iii)

Regulations

(I)

In general

(II)

United States businesses that own, operate, manufacture, supply, or service critical infrastructure

The regulations prescribed by the Committee with respect to an investment described in subparagraph (B)(iii)(I) shall—

(aa)

specify the critical infrastructure subject to that subparagraph based on criteria intended to limit application of that subparagraph to the subset of critical infrastructure that is likely to be of importance to the national security of the United States; and

(bb)

enumerate specific types and examples of such critical infrastructure.

(iv)

Specific clarification for investment funds

(I)

Treatment of certain investment fund investments

Notwithstanding clause (i)(II) and subject to regulations prescribed by the Committee, an indirect investment by a foreign person in a United States business described in subparagraph (B)(iii) through an investment fund that affords the foreign person (or a designee of the foreign person) membership as a limited partner or equivalent on an advisory board or a committee of the fund shall not be considered an “other investment” for purposes of subparagraph (B)(iii) if—

(aa)

the fund is managed exclusively by a general partner, a managing member, or an equivalent;

(bb)

the general partner, managing member, or equivalent is not a foreign person;

(cc)

the advisory board or committee does not have the ability to approve, disapprove, or otherwise control—

(AA)

investment decisions of the fund; or

(BB)

decisions made by the general partner, managing member, or equivalent related to entities in which the fund is invested;

(dd)

the foreign person does not otherwise have the ability to control the fund, including the authority—

(AA)

to approve, disapprove, or otherwise control investment decisions of the fund;

(BB)

to approve, disapprove, or otherwise control decisions made by the general partner, managing member, or equivalent related to entities in which the fund is invested; or

(CC)

to unilaterally dismiss, prevent the dismissal of, select, or determine the compensation of the general partner, managing member, or equivalent;

(ee)

the foreign person does not have access to material nonpublic technical information as a result of its participation on the advisory board or committee; and

(ff)

the investment otherwise meets the requirements of this subparagraph.

(II)

Treatment of certain waivers

(aa)

In general

(bb)

Exception

(v)

Exception for air carriers

(vi)

Rule of construction

(E)

Country specification

(F)

Transfers of certain assets pursuant to bankruptcy proceedings or other defaults

(5)

Critical infrastructure

(6)

Critical technologies

(A)

In general

The term “critical technologies” means the following:

(i)

Defense articles or defense services included on the United States Munitions List set forth in the International Traffic in Arms Regulations under subchapter M of chapter I of title 22, Code of Federal Regulations.

(ii)

Items included on the Commerce Control List set forth in Supplement No. 1 to part 774 of the Export Administration Regulations under subchapter C of chapter VII of title 15, Code of Federal Regulations, and controlled—

(I)

pursuant to multilateral regimes, including for reasons relating to national security, chemical and biological weapons proliferation, nuclear nonproliferation, or missile technology; or

(II)

for reasons relating to regional stability or surreptitious listening.

(iii)

Specially designed and prepared nuclear equipment, parts and components, materials, software, and technology covered by part 810 of title 10, Code of Federal Regulations (relating to assistance to foreign atomic energy activities).

(iv)

Nuclear facilities, equipment, and material covered by part 110 of title 10, Code of Federal Regulations (relating to export and import of nuclear equipment and material).

(v)

Select agents and toxins covered by part 331 of title 7, Code of Federal Regulations, part 121 of title 9 of such Code, or part 73 of title 42 of such Code.

(vi)

Emerging and foundational technologies controlled pursuant to section 4817 of this title.

(B)

Recommendations

(i)

In general

(ii)

Matters informing recommendations

(7)

Foreign government-controlled transaction

(8)

Intelligence community

(9)

Investment

(10)

Lead agency

(11)

Party

(12)

United States

(13)

United States business

(b)

National security reviews and investigations

(1)

National security reviews

(A)

In general

Upon receiving written notification under subparagraph (C) of any covered transaction, or pursuant to a unilateral notification initiated under subparagraph (D) with respect to any covered transaction, the President, acting through the Committee—

(i)

shall review the covered transaction to determine the effects of the transaction on the national security of the United States; and

(ii)

shall consider the factors specified in subsection (f) for such purpose, as appropriate.

(B)

Control by foreign government

(C)

Written notice

(i)

In general

(I)

In general

(II)

Comments and acceptance

(aa)

In general

(bb)

Completeness

(cc)

Stipulations required

(ii)

Withdrawal of notice

(iii)

Continuing discussions

(iv)

Inclusion of partnership and side agreements

(v)

Declarations for certain covered transactions

(I)

In general

(II)

Regulations

(III)

Committee response to declaration

(aa)

In general

Upon receiving a declaration under this clause with respect to a covered transaction, the Committee may, at the discretion of the Committee—

(AA)

request that the parties to the transaction file a written notice under clause (i);

(BB)

inform the parties to the transaction that the Committee is not able to complete action under this section with respect to the transaction on the basis of the declaration and that the parties may file a written notice under clause (i) to seek written notification from the Committee that the Committee has completed all action under this section with respect to the transaction;

(CC)

initiate a unilateral review of the transaction under subparagraph (D); or

(DD)

notify the parties in writing that the Committee has completed all action under this section with respect to the transaction.

(bb)

Timing

(cc)

Rule of construction

(IV)

Mandatory declarations

(aa)

Regulations

(bb)

Certain covered transactions with foreign government interests

(AA)

In general

(BB)

Substantial interest defined

(CC)

Waiver

(cc)

Other declarations required by Committee

(dd)

Exception

The submission of a declaration described in subclause (I) shall not be required pursuant to this subclause with respect to an investment by an investment fund if—

(AA)

the fund is managed exclusively by a general partner, a managing member, or an equivalent;

(BB)

the general partner, managing member, or equivalent is not a foreign person; and

(CC)

the investment fund satisfies, with respect to any foreign person with membership as a limited partner on an advisory board or a committee of the fund, the criteria specified in items (cc) and (dd) of subsection (a)(4)(D)(iv).

(ee)

Submission of written notice as an alternative

(ff)

Timing and refiling of submission

(AA)

In general

(BB)

Refiling of declaration

(gg)

Penalties

(vi)

Stipulations regarding transactions

(I)

In general

In a written notice submitted under clause (i) or a declaration submitted under clause (v) with respect to a transaction, a party to the transaction may—

(aa)

stipulate that the transaction is a covered transaction; and

(bb)

if the party stipulates that the transaction is a covered transaction under item (aa), stipulate that the transaction is a foreign government-controlled transaction.

(II)

Basis for stipulation

(D)

Unilateral initiation of review

Subject to subparagraph (G), the President or the Committee may initiate a review under subparagraph (A) of—

(i)

any covered transaction (other than a covered transaction described in subparagraph (E));

(ii)

any covered transaction described in subparagraph (E), if any party to the transaction submitted false or misleading material information to the Committee in connection with the Committee’s consideration of the transaction or omitted material information, including material documents, from information submitted to the Committee; or

(iii)

any covered transaction described in subparagraph (E), if—

(I)

any party to the transaction or the entity resulting from consummation of the transaction materially breaches a mitigation agreement or condition described in subsection (l)(3)(A);

(II)

such breach is certified to the Committee by the lead department or agency monitoring and enforcing such agreement or condition as a material breach; and

(III)

the Committee determines that there are no other adequate and appropriate remedies or enforcement tools available to address such breach.

(E)

Covered transactions described

A covered transaction is described in this subparagraph if—

(i)

the Committee has informed the parties to the transaction in writing that the Committee has completed all action under this section with respect to the transaction; or

(ii)

the President has announced a decision not to exercise the President’s authority under subsection (d) with respect to the transaction.

(F)

Timing

(G)

Limit on delegation of certain authority

(H)

Identification of non-notified and non-declared transactions

The Committee shall establish a process to identify covered transactions for which—

(i)

a notice under clause (i) of subparagraph (C) or a declaration under clause (v) of that subparagraph is not submitted to the Committee; and

(ii)

information is reasonably available.

(2)

National security investigations

(A)

In general

(B)

Applicability

Subparagraph (A) shall apply in each case in which—

(i)

a review of a covered transaction under paragraph (1) results in a determination that—

(I)

the transaction threatens to impair the national security of the United States and the risk has not been mitigated during or prior to the review of a covered transaction under paragraph (1);

(II)

the transaction is a foreign government-controlled transaction; or

(III)

the transaction would result in control of any critical infrastructure of or within the United States by or on behalf of any foreign person, if the Committee determines that the transaction could impair national security, and that such impairment to national security has not been mitigated by assurances provided or renewed with the approval of the Committee, as described in subsection (l), during the review period under paragraph (1); or

(ii)

the lead agency recommends, and the Committee concurs, that an investigation be undertaken.

(C)

Timing

(i)

In general

(ii)

Extension for extraordinary circumstances

(I)

In general

(II)

Nondelegation

(III)

Notification to parties

(D)

Exception

(i)

In general

(ii)

Nondelegation

(E)

Guidance on certain transactions with national security implications

(3)

Certifications to Congress

(A)

Certified notice at completion of review or assessment

(B)

Certified report at completion of investigation

(C)

Certification procedures

(i)

In general

Each certified notice and report required under subparagraphs (A) and (B), respectively, shall be submitted to the members of Congress specified in clause (iii), and shall include—

(I)

a description of the actions taken by the Committee with respect to the transaction;

(II)

a certification that all relevant national security factors have received full consideration; and

(III)

whether the transaction is described under clause (i), (ii), (iii), (iv), or (v) of subsection (a)(4)(B).

(ii)

Content of certification

(iii)

Members of Congress

Each certified notice and report required under subparagraphs (A) and (B), respectively, shall be transmitted—

(I)

to the Majority Leader and the Minority Leader of the Senate;

(II)

to the chair and ranking member of the Committee on Banking, Housing, and Urban Affairs of the Senate and of any committee of the Senate having oversight over the lead agency;

(III)

to the Speaker and the Minority Leader of the House of Representatives;

(IV)

to the chair and ranking member of the Committee on Financial Services of the House of Representatives and of any committee of the House of Representatives having oversight over the lead agency; and

(V)

with respect to covered transactions involving critical infrastructure, to the members of the Senate from the State in which the principal place of business of the acquired United States person is located, and the member from the Congressional District in which such principal place of business is located.

(iv)

Signatures; limit on delegation

(I)

In general

(II)

Delegation of certifications

(aa)

In general

(bb)

Limitation on delegation with respect to certain transactions

(v)

Authority to consolidate documents

(4)

Analysis by Director of National Intelligence

(A)

Analysis required

(i)

In general

(ii)

Views of intelligence community

(iii)

Updates

(iv)

Independence and objectivity

(B)

Basic threat information

(i)

In general

(ii)

Covered transaction described

A covered transaction is described in this clause if—

(I)

the transaction is described in subsection (a)(4)(B)(ii);

(II)

the Director of National Intelligence has completed an analysis pursuant to subparagraph (A) involving each foreign person that is a party to the transaction during the 12 months preceding the review or investigation of the transaction under this section; or

(III)

the transaction otherwise meets criteria agreed upon by the Committee and the Director for purposes of this subparagraph.

(C)

Timing

(D)

Interaction with intelligence community

(E)

Independent role of Director

(F)

Assessment of operational impact

(G)

Submission to Congress

(5)

Submission of additional information

(6)

Notice of results to parties

(7)

Regulations

Regulations prescribed under this section shall include standard procedures for—

(A)

submitting any notice of a covered transaction to the Committee;

(B)

submitting a request to withdraw a covered transaction from review;

(C)

resubmitting a notice of a covered transaction that was previously withdrawn from review; and

(D)

providing notice of the results of a review or investigation to the parties to the covered transaction, upon completion of all action under this section.

(8)

Tolling of deadlines during lapse in appropriations

(c)

Confidentiality of information

(1)

In general

(2)

Exceptions

Paragraph (1) shall not prohibit the disclosure of the following:

(A)

Information relevant to any administrative or judicial action or proceeding.

(B)

Information to Congress or any duly authorized committee or subcommittee of Congress.

(C)

Information important to the national security analysis or actions of the Committee to any domestic governmental entity, or to any foreign governmental entity of a United States ally or partner, under the exclusive direction and authorization of the chairperson, only to the extent necessary for national security purposes, and subject to appropriate confidentiality and classification requirements.

(D)

Information that the parties have consented to be disclosed to third parties.

(3)

Cooperation with allies and partners

(A)

In general

(B)

Requirements

The process established under subparagraph (A) should, in the discretion of the chairperson—

(i)

be designed to facilitate the harmonization of action with respect to trends in investment and technology that could pose risks to the national security of the United States and countries that are allies or partners of the United States;

(ii)

provide for the sharing of information with respect to specific technologies and entities acquiring such technologies as appropriate to ensure national security; and

(iii)

include consultations and meetings with representatives of the governments of such countries on a recurring basis.

(d)

Action by the President

(1)

In general

(2)

Announcement by the President

The President shall announce the decision on whether or not to take action pursuant to paragraph (1) with respect to a covered transaction not later than 15 days after the earlier of—

(A)

the date on which the investigation of the transaction under subsection (b) is completed; or

(B)

the date on which the Committee otherwise refers the transaction to the President under subsection (l)(2).

(3)

Enforcement

(4)

Findings of the President

The President may exercise the authority conferred by paragraph (1), only if the President finds that—

(A)

there is credible evidence that leads the President to believe that a foreign person that would acquire an interest in a United States business or its assets as a result of the covered transaction might take action that threatens to impair the national security; and

(B)

provisions of law, other than this section and the International Emergency Economic Powers Act [50 U.S.C. 1701 et seq.], do not, in the judgment of the President, provide adequate and appropriate authority for the President to protect the national security in the matter before the President.

(5)

Factors to be considered

(e)

Actions and findings nonreviewable

(1)

In general

(2)

Civil actions

(3)

Procedures for review of privileged information

(4)

Applicability of use of information provisions

(f)

Factors to be considered

For purposes of this section, the President or the President’s designee may, taking into account the requirements of national security, consider—

(1)

domestic production needed for projected national defense requirements,

(2)

the capability and capacity of domestic industries to meet national defense requirements, including the availability of human resources, products, technology, materials, and other supplies and services,

(3)

the control of domestic industries and commercial activity by foreign citizens as it affects the capability and capacity of the United States to meet the requirements of national security,

(4)

the potential effects of the proposed or pending transaction on sales of military goods, equipment, or technology to any country—

(A)

identified by the Secretary of State—

(i)

under section 4605(j) 1

 See References in Text note below.

of this title, as a country that supports terrorism;

(ii)

under section 4605(l) ¹ of this title, as a country of concern regarding missile proliferation; or

(iii)

under section 4605(m) ¹ of this title, as a country of concern regarding the proliferation of chemical and biological weapons;

(B)

identified by the Secretary of Defense as posing a potential regional military threat to the interests of the United States; or

(C)

listed under section 2139a(c) of title 42 on the “Nuclear Non-Proliferation-Special Country List” (15 C.F.R. Part 778, Supplement No. 4) or any successor list;

(5)

the potential effects of the proposed or pending transaction on United States international technological leadership in areas affecting United States national security;

(6)

the potential national security-related effects on United States critical infrastructure, including major energy assets;

(7)

the potential national security-related effects on United States critical technologies;

(8)

whether the covered transaction is a foreign government-controlled transaction, as determined under subsection (b)(1)(B);

(9)

as appropriate, and particularly with respect to transactions requiring an investigation under subsection (b)(1)(B), a review of the current assessment of—

(A)

the adherence of the subject country to nonproliferation control regimes, including treaties and multilateral supply guidelines, which shall draw on, but not be limited to, the annual report on “Adherence to and Compliance with Arms Control, Nonproliferation and Disarmament Agreements and Commitments” required by section 2593a of title 22;

(B)

the relationship of such country with the United States, specifically on its record on cooperating in counter-terrorism efforts, which shall draw on, but not be limited to, the report of the President to Congress under section 7120 of the Intelligence Reform and Terrorism Prevention Act of 2004; and

(C)

the potential for transshipment or diversion of technologies with military applications, including an analysis of national export control laws and regulations;

(10)

the long-term projection of United States requirements for sources of energy and other critical resources and material; and

(11)

such other factors as the President or the Committee may determine to be appropriate, generally or in connection with a specific review or investigation.

(g)

Additional information to Congress; confidentiality

(1)

Briefing requirement on request

(2)

Application of confidentiality provisions

(A)

In general

(B)

Proprietary information

(h)

Regulations

(1)

In general

(2)

Content

Regulations issued under this subsection shall—

(A)

provide for the imposition of civil penalties for any violation of this section, including any mitigation agreement entered into, conditions imposed, or order issued pursuant to this section;

(B)

to the extent possible—

(i)

minimize paperwork burdens; and

(ii)

coordinate reporting requirements under this section with reporting requirements under any other provision of Federal law;

(C)

provide for an appropriate role for the Secretary of Labor with respect to mitigation agreements; and

(D)

provide that, in any review or investigation of a covered transaction conducted by the Committee under subsection (b), the Committee should—

(i)

consider the factors specified in subsection (f); and

(ii)

as appropriate, require parties to provide to the Committee the information necessary to consider such factors.

(i)

Effect on other law

(j)

Technology risk assessments

(k)

Committee on Foreign Investment in the United States

(1)

Establishment

(2)

Membership

The Committee shall be comprised of the following members or the designee of any such member:

(A)

The Secretary of the Treasury.

(B)

The Secretary of Homeland Security.

(C)

The Secretary of Commerce.

(D)

The Secretary of Defense.

(E)

The Secretary of State.

(F)

The Attorney General of the United States.

(G)

The Secretary of Energy.

(H)

The Secretary of Labor (nonvoting, ex officio).

(I)

The Director of National Intelligence (nonvoting, ex officio).

(J)

The heads of any other executive department, agency, or office, as the President determines appropriate, generally or on a case-by-case basis.

(3)

Chairperson

(4)

Hiring authority

(A)

Senior officials

(i)

In general

(ii)

Department of the Treasury

(I)

In general

(II)

Assistant Secretary for Investment Security

(B)

Special hiring authority

(5)

Designation of lead agency

The Secretary of the Treasury shall designate, as appropriate, a member or members of the Committee to be the lead agency or agencies on behalf of the Committee—

(A)

for each covered transaction, and for negotiating any mitigation agreements or other conditions necessary to protect national security; and

(B)

for all matters related to the monitoring of the completed transaction, to ensure compliance with such agreements or conditions and with this section.

(6)

Other members

(7)

Meetings

(l)

Actions by the Committee to address national security risks

(1)

Suspension of transactions

(2)

Referral to President

(3)

Mitigation

(A)

Agreements and conditions

(i)

In general

(ii)

Abandonment of transactions

(iii)

Agreements and conditions relating to completed transactions

(B)

Treatment of outdated agreements or conditions

(C)

Limitations

An agreement may not be entered into or condition imposed under subparagraph (A) with respect to a covered transaction unless the Committee determines that the agreement or condition resolves the national security concerns posed by the transaction, taking into consideration whether the agreement or condition is reasonably calculated to—

(i)

be effective;

(ii)

allow for compliance with the terms of the agreement or condition in an appropriately verifiable way; and

(iii)

enable effective monitoring of compliance with and enforcement of the terms of the agreement or condition.

(D)

Jurisdiction

(4)

Risk-based analysis required

(A)

In general

(B)

Actions of members of the Committee

(i)

In general

(ii)

Failure to reach consensus

If the Committee fails to reach consensus with respect to a recommendation under clause (i) regarding a covered transaction, the members of the Committee who support an alternative recommendation shall produce—

(I)

a written statement justifying the alternative recommendation; and

(II)

as appropriate, a risk-based analysis that supports the alternative recommendation.

(C)

Definitions

(5)

Tracking authority for withdrawn notices

(A)

In general

If any written notice of a covered transaction that was submitted to the Committee under this section is withdrawn before any review or investigation by the Committee under subsection (b) is completed, the Committee shall establish, as appropriate—

(i)

interim protections to address specific concerns with such transaction that have been raised in connection with any such review or investigation pending any resubmission of any written notice under this section with respect to such transaction and further action by the President under this section;

(ii)

specific time frames for resubmitting any such written notice; and

(iii)

a process for tracking any actions that may be taken by any party to the transaction, in connection with the transaction, before the notice referred to in clause (ii) is resubmitted.

(B)

Designation of agency

(6)

Negotiation, modification, monitoring, and enforcement

(A)

Designation of lead agency

(B)

Reporting by designated agency

The lead agency in connection with any agreement entered into or condition imposed with respect to a covered transaction shall—

(i)

provide periodic reports to the Committee on any material modification to any such agreement or condition imposed with respect to the transaction; and

(ii)

ensure that any material modification to any such agreement or condition is reported to the Director of National Intelligence, the Attorney General of the United States, and any other Federal department or agency that may have a material interest in such modification.

(C)

Compliance plans

(i)

In general

(ii)

Elements

Each plan required by clause (i) with respect to an agreement entered into under paragraph (3)(A) shall include an explanation of—

(I)

which member of the Committee will have primary responsibility for monitoring compliance with the agreement;

(II)

how compliance with the agreement will be monitored;

(III)

how frequently compliance reviews will be conducted;

(IV)

whether an independent entity will be utilized under subparagraph (E) to conduct compliance reviews; and

(V)

what actions will be taken if the parties fail to cooperate regarding monitoring compliance with the agreement.

(D)

Effect of lack of compliance

If, at any time after a mitigation agreement or condition is entered into or imposed under paragraph (3)(A), the Committee or lead agency, as the case may be, determines that a party or parties to the agreement or condition are not in compliance with the terms of the agreement or condition, the Committee or lead agency may, in addition to the authority of the Committee to impose penalties pursuant to subsection (h)(3) and to unilaterally initiate a review of any covered transaction under subsection (b)(1)(D)(iii)—

(i)

negotiate a plan of action for the party or parties to remediate the lack of compliance, with failure to abide by the plan or otherwise remediate the lack of compliance serving as the basis for the Committee to find a material breach of the agreement or condition;

(ii)

require that the party or parties submit a written notice under clause (i) of subsection (b)(1)(C) or a declaration under clause (v) of that subsection with respect to a covered transaction initiated after the date of the determination of noncompliance and before the date that is 5 years after the date of the determination to the Committee to initiate a review of the transaction under subsection (b); or

(iii)

seek injunctive relief.

(E)

Use of independent entities to monitor compliance

(F)

Successors and assigns

(G)

Additional compliance measures

(m)

Annual report to Congress

(1)

In general

(2)

Contents of report relating to covered transactions

The annual report under paragraph (1) shall contain the following information, with respect to each covered transaction, for the reporting period:

(A)

A list of all notices filed and all reviews or investigations of covered transactions completed during the period, with—

(i)

a description of the outcome of each review or investigation, including whether an agreement was entered into or condition was imposed under subsection (l)(3)(A) with respect to the transaction being reviewed or investigated, and whether the President took any action under this section with respect to that transaction;

(ii)

basic information on each party to each such transaction;

(iii)

the nature of the business activities or products of the United States business with which the transaction was entered into or intended to be entered into; and

(iv)

information about any withdrawal from the process.

(B)

Specific, cumulative, and, as appropriate, trend information on the numbers of filings, investigations, withdrawals, and decisions or actions by the President under this section.

(C)

Cumulative and, as appropriate, trend information on the business sectors involved in the filings which have been made, and the countries from which the investments have originated.

(D)

Information on whether companies that withdrew notices to the Committee in accordance with subsection (b)(1)(C)(ii) have later refiled such notices, or, alternatively, abandoned the transaction.

(E)

The types of security arrangements and conditions the Committee has used to mitigate national security concerns about a transaction, including a discussion of the methods that the Committee and any lead agency are using to determine compliance with such arrangements or conditions.

(F)

A detailed discussion of all perceived adverse effects of covered transactions on the national security or critical infrastructure of the United States that the Committee will take into account in its deliberations during the period before delivery of the next report, to the extent possible.

(G)

Statistics on compliance plans conducted and actions taken by the Committee under subsection (l)(6), including subparagraph (D) of that subsection, during that period, a general assessment of the compliance of parties with agreements entered into and conditions imposed under subsection (l)(3)(A) that are in effect during that period, including a description of any actions taken by the Committee to impose penalties or initiate a unilateral review pursuant to subsection (b)(1)(D)(iii), and any recommendations for improving the enforcement of such agreements and conditions.

(H)

Cumulative and, as appropriate, trend information on the number of declarations filed under subsection (b)(1)(C)(v), the actions taken by the Committee in response to those declarations, the business sectors involved in those declarations, and the countries involved in those declarations.

(I)

A description of—

(i)

the methods used by the Committee to identify non-notified and non-declared transactions under subsection (b)(1)(H);

(ii)

potential methods to improve such identification and the resources required to do so; and

(iii)

the number of transactions identified through the process established under that subsection during the reporting period and the number of such transactions flagged for further review.

(J)

A summary of the hiring practices and policies of the Committee pursuant to subsection (k)(4).

(K)

A list of the waivers granted by the Committee under subsection (b)(1)(C)(v)(IV)(bb)(CC).

(3)

Contents of report relating to critical technologies

In order to assist Congress in its oversight responsibilities with respect to this section, the President and such agencies as the President shall designate shall include in the annual report submitted under paragraph (1)—

(A)

an evaluation of whether there is credible evidence of a coordinated strategy by 1 or more countries or companies to acquire United States companies involved in research, development, or production of critical technologies for which the United States is a leading producer;

(B)

an evaluation of whether there are industrial espionage activities directed or directly assisted by foreign governments against private United States companies aimed at obtaining commercial secrets related to critical technologies; and

(C)

a description of the technologies recommended by the chairperson under subsection (a)(6)(B) for identification under the interagency process set forth in section 4817(a) of this title.

(4)

Form of report

(A)

In general

(B)

Inclusion in classified version

(C)

Inclusions in unclassified version

The unclassified version of the report required under paragraph (1) shall include, with respect to covered transactions for the reporting period—

(i)

the number of notices submitted under subsection (b)(1)(C)(i);

(ii)

the number of declarations submitted under subsection (b)(1)(C)(v) and the number of such declarations that were required under subclause (IV) of that subsection;

(iii)

the number of declarations submitted under subsection (b)(1)(C)(v) for which the Committee required resubmission as notices under subsection (b)(1)(C)(i);

(iv)

the average number of days that elapsed between submission of a declaration under subsection (b)(1)(C)(v) and the acceptance of the declaration by the Committee;

(v)

the median and average number of days that elapsed between acceptance of a declaration by the Committee and a response described in subsection (b)(1)(C)(v)(III);

(vi)

information on the time it took the Committee to provide comments on, or to accept, notices submitted under subsection (b)(1)(C)(i), including—

(I)

the average number of business days that elapsed between the date of submission of a draft notice and the date on which the Committee provided written comments on the draft notice;

(II)

the average number of business days that elapsed between the date of submission of a formal written notice and the date on which the Committee accepted or provided written comments on the formal written notice; and

(III)

if the average number of business days for a response by the Committee reported under subclause (I) or (II) exceeded 10 business days—

(aa)

an explanation of the causes of such delays, including whether such delays are caused by resource shortages, unusual fluctuations in the volume of notices, transaction characteristics, or other factors; and

(bb)

an explanation of the steps that the Committee anticipates taking to mitigate the causes of such delays and otherwise to improve the ability of the Committee to provide comments on, or to accept, notices within 10 business days;

(vii)

the number of reviews or investigations conducted under subsection (b);

(viii)

the number of investigations that were subject to an extension under subsection (b)(2)(C)(ii);

(ix)

information on the duration of those reviews and investigations, including the median and average number of days required to complete those reviews and investigations;

(x)

the number of notices submitted under subsection (b)(1)(C)(i) and declarations submitted under subsection (b)(1)(C)(v) that were rejected by the Committee;

(xi)

the number of such notices and declarations that were withdrawn by a party to the covered transaction;

(xii)

the number of such withdrawals that were followed by the submission of a subsequent such notice or declaration relating to a substantially similar covered transaction; and

(xiii)

such other specific, cumulative, or trend information that the Committee determines is advisable to provide for an assessment of the time required for reviews and investigations of covered transactions under this section.

(n)

Certification of notices and assurances

(1)

In general

Each notice, and any followup information, submitted under this section and regulations prescribed under this section to the President or the Committee by a party to a covered transaction, and any information submitted by any such party in connection with any action for which a report is required pursuant to paragraph (6)(B) of subsection (l), with respect to the implementation of any mitigation agreement or condition described in paragraph (3)(A) of subsection (l), or any material change in circumstances, shall be accompanied by a written statement by the chief executive officer or the designee of the person required to submit such notice or information certifying that, to the best of the knowledge and belief of that person—

(A)

the notice or information submitted fully complies with the requirements of this section or such regulation, agreement, or condition; and

(B)

the notice or information is accurate and complete in all material respects.

(2)

Effect of failure to submit

The Committee may not complete a review under this section of a covered transaction and may recommend to the President that the President suspend or prohibit the transaction under subsection (d) if the Committee determines that a party to the transaction has—

(A)

failed to submit a statement required by paragraph (1); or

(B)

included false or misleading information in a notice or information described in paragraph (1) or omitted material information from such notice or information.

(3)

Applicability of law on fraud and false statements

(o)

Testimony

(1)

In general

Not later than March 31 of each year, the chairperson, or the designee of the chairperson, shall appear before the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate to present testimony on—

(A)

anticipated resources necessary for operations of the Committee in the following fiscal year at each of the departments or agencies represented on the Committee;

(B)

the adequacy of appropriations for the Committee in the current and the previous fiscal year to—

(i)

ensure that thorough reviews and investigations are completed as expeditiously as possible;

(ii)

monitor and enforce mitigation agreements; and

(iii)

identify covered transactions for which a notice under clause (i) of subsection (b)(1)(C) or a declaration under clause (v) of that subsection was not submitted to the Committee;

(C)

management efforts to strengthen the ability of the Committee to meet the requirements of this section; and

(D)

activities of the Committee undertaken in order to—

(i)

educate the business community, with a particular focus on the technology sector and other sectors of importance to national security, on the goals and operations of the Committee;

(ii)

disseminate to the governments of countries that are allies or partners of the United States best practices of the Committee that—

(I)

strengthen national security reviews of relevant investment transactions; and

(II)

expedite such reviews when appropriate; and

(iii)

promote openness to foreign investment, consistent with national security considerations.

(2)

Sunset

(p)

Funding

(1)

Establishment of Fund

(2)

Authorization of appropriations for the Committee

(3)

Filing fees

(A)

In general

(B)

Determination of amount of fee

(i)

In general

The amount of the fee to be assessed under subparagraph (A) with respect to a covered transaction—

(I)

may not exceed an amount equal to the lesser of—

(aa)

1 percent of the value of the transaction; or

(bb)

$300,000, adjusted annually for inflation pursuant to regulations prescribed by the Committee; and

(II)

shall be based on the value of the transaction, taking into account—

(aa)

the effect of the fee on small business concerns (as defined in section 632 of title 15);

(bb)

the expenses of the Committee associated with conducting activities under this section;

(cc)

the effect of the fee on foreign investment; and

(dd)

such other matters as the Committee considers appropriate.

(ii)

Updates

(C)

Deposit and availability of fees

Notwithstanding section 3302 of title 31, fees collected under subparagraph (A) shall—

(i)

be deposited into the Fund solely for use in carrying out activities under this section;

(ii)

to the extent and in the amounts provided in advance in appropriations Acts, be available to the chairperson;

(iii)

remain available until expended; and

(iv)

be in addition to any appropriations made available to the members of the Committee.

(D)

Study on prioritization fee

(i)

In general

(ii)

Submission to Congress

(4)

Transfer of funds

(q)

Centralization of certain Committee functions

(1)

In general

(2)

Functions

(3)

Rule of construction

(Sept. 8, 1950, ch. 932, title VII, § 721, as added Pub. L. 100–418, title V, § 5021, Aug. 23, 1988, 102 Stat. 1425; amended Pub. L. 102–484, div. A, title VIII, § 837(a)–(c), (e), Oct. 23, 1992, 106 Stat. 2463–2465; Pub. L. 102–558, title I, § 163, Oct. 28, 1992, 106 Stat. 4219; Pub. L. 103–359, title VIII, § 809(d), Oct. 14, 1994, 108 Stat. 3454; Pub. L. 110–49, §§ 2–7(b), 8–10, July 26, 2007, 121 Stat. 246, 252–257, 259; Pub. L. 115–232, div. A, title XVII, §§ 1703–1717(a), 1718, 1719(a), 1720, 1721(c), 1723–1725, Aug. 13, 2018, 132 Stat. 2177–2193, 2197, 2202, 2204–2206; Pub. L. 116–283, div. H, title XCVII, § 9721(a), Jan. 1, 2021, 134 Stat. 4839.)

cite as: 50 USC 4565

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