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Foreign Investment and National Security Act of 2007 (Public Law 110-49)

Core Content

The Foreign Investment and National Security Act of 2007 (FISA) is a U.S. federal law enacted on July 26, 2007, to enhance national security protections while allowing foreign investment in the United States. It reformed the process for reviewing foreign investments that could affect national security, particularly those involving critical infrastructure and critical technologies. The law established the Committee on Foreign Investment in the United States (CFIUS) to oversee these reviews and investigations, and it expanded the scope of national security considerations to include homeland security and intelligence community involvement.

Main Purpose

• To ensure national security while promoting foreign investment and job creation.
• To reform the review and investigation process for foreign investments.
• To establish the CFIUS as a multi-agency committee to evaluate the national security implications of foreign investments.
• To increase oversight by Congress and enhance enforcement mechanisms.

Key Provisions

1. Statutory Framework and Definitions

• The law amends Section 721 of the Defense Production Act of 1950.
• It defines key terms:
  • Committee and Chairperson refer to the CFIUS and its chair.
  • Control is defined by CFIUS regulations.
  • Covered Transaction includes any merger, acquisition, or takeover after August 23, 1988, that could result in foreign control of a U.S. entity in interstate commerce.
  • Foreign Government-Controlled Transaction is any covered transaction that could result in foreign government control.
  • Critical Infrastructure refers to systems or assets vital to the U.S. that would have a debilitating impact on national security if disrupted.
  • Critical Technologies are technologies, components, or items essential to national defense.

2. Review and Investigation Process

• The President acts through the CFIUS to review or investigate covered transactions.
• Review is triggered by written notice from the parties involved or unilateral initiation by the President or CFIUS.
• Investigation is required if:
  • The transaction is a foreign government-controlled transaction.
  • It involves critical infrastructure.
  • It threatens to impair national security.
• Investigations must be completed within 45 days, unless an exception applies.
• Exception: If the Secretary of the Treasury and the lead agency jointly determine that the transaction does not impair national security, no investigation is required.

3. Certification and Reporting

• Certified notices and reports are required after the review or investigation.
• These documents must include:
  • A description of actions taken by the Committee.
  • Identification of determinative factors considered.
• The Chairperson and the lead agency head must sign these documents.
• They are transmitted to specific Congressional members and committees, including:
  • Senate Majority and Minority Leaders.
  • House Speaker and Minority Leader.
  • Relevant Senate and House committees.
  • For transactions involving critical infrastructure, to members of Congress from the state and district where the transaction occurs.

4. Role of the Director of National Intelligence

• The Director of National Intelligence (DNI) is a nonvoting, ex officio member of the CFIUS.
• The DNI is responsible for:
  • Conducting a thorough analysis of threats to national security.
  • Consulting with intelligence agencies.
  • Providing analysis to the Committee.
• The DNI is not involved in policy decisions but is engaged in information collection and analysis.

5. Additional Factors for Consideration

• The CFIUS must consider additional factors, including:
  • Potential regional military threats.
  • Effects on critical infrastructure.
  • Effects on critical technologies.
  • Whether the transaction is foreign government-controlled.
  • Nonproliferation compliance of the subject country.
  • Counterterrorism cooperation with the U.S.
  • Potential for transshipment or diversion of military technologies.
  • Long-term U.S. energy and resource needs.
  • Other factors as deemed appropriate by the President or CFIUS.

6. Mitigation, Tracking, and Enforcement

• The Committee or lead agency may negotiate, impose, or enforce mitigation agreements or conditions.
• These agreements must be based on a risk-based analysis.
• If a notice is withdrawn, the Committee may establish:
  • Interim protections.
  • Time frames for resubmission.
  • A tracking process for actions taken by the parties.
• The lead agency is responsible for:
  • Negotiating and enforcing mitigation agreements.
  • Reporting modifications to the Committee and relevant officials.
  • Ensuring compliance with agreements.

7. Presidential Authority

• The President may suspend or prohibit covered transactions that threaten national security.
• The President must announce such decisions within 15 days of the completion of an investigation.
• The President may seek judicial relief, including divestment, to enforce mitigation agreements.
• Findings and actions by the President are nonreviewable by courts.

8. Congressional Oversight

• The CFIUS must submit an annual report to the chairmen and ranking members of relevant Senate and House committees.
• The report includes all completed reviews and investigations from the previous 12 months.
• The report must include confidentiality provisions, ensuring that proprietary information is only disclosed to Congress with confidentiality assurances.

Conclusion

The Foreign Investment and National Security Act of 2007 established a comprehensive framework for reviewing foreign investments in the U.S. that could affect national security. It created the CFIUS as a multi-agency body, expanded the scope of national security considerations, and increased Congressional oversight. The law also included enforcement mechanisms, mitigation agreements, and intelligence community involvement to ensure that foreign investments are evaluated and managed in a way that protects U.S. interests.