Cultural Revolutions

Opposing CFIUS

Sen. Richard Shelby (R-AL) received a letter on March 23 from a gaggle of organizations representing the financial industry.  The group included the American Bankers Association, the Bankers’ Association for Finance and Trade, the Investment Company Institute, the Securities Industry Association, the Bond Market Association, the Financial Services Forum, and the Financial Services Roundtable.  They wrote in opposition to strengthening the Committee on Foreign Investment in the United States (CFIUS), a reform effort that Senator Shelby, chairman of the Senate Banking Committee, is leading.

CFIUS was created in 1975 to review the impact of foreign transactions on national security and the defense industrial base.  Its powers were expanded in 1988 with the adoption of the Exon-Florio amendment to the Defense Production Act.  Shelby’s concern that CFIUS is not being vigilant enough was triggered last summer when the state-owned Chinese National Overseas Oil Company tried to buy American-owned Unocal, which possessed oil reserves around the world that Beijing coveted.  CFIUS has become more famous in recent months in the wake of the attempt by state-owned Dubai Ports World to gain control of several U.S. ports through the acquisition of the British firm Peninsular and Oriental Steam Navigation Company.  CFIUS has the authority to block foreign takeovers of U.S.-based assets or mandate changes in...

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