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FINSAQ: What is the Foreign Investment and National Security Act of 2007 (FINSA)?A: It is a federal law that ensures national security while promoting foreign investment and the creation and maintenance of jobs. FINSA also reforms the process by which foreign investments are examined for any effect they may have on national security and codifies the CFIUS process. Q: What does FINSA do? A: It codifies aspects of the structure, role, process and responsibilities of CFIUS and the role of executive branch departments, agencies and offices in CFIUS’s review of transactions for national security concerns. Q: What prompted Congress to pass it? A: Dating back to World War I, Congress, the President and the American people have consistently become more concerned about the impact of foreign direct investment on U.S. national security in times of war or events that create feelings of uneasiness toward other countries. The attacks of September 11, 2001 are no exception, and a few major foreign transactions since then - most notably the Dubai Ports World attempted acquisition – have caused heightened concern about the CFIUS review process. Before FINSA, CFIUS had existed only by executive order. Q: How has FINSA changed the members of CFIUS? A: FINSA added the Director of National Intelligence (DNI) and the Secretary of Labor as nonvoting, ex officio members of CFIUS. Q: What role does the DNI play in the CFIUS process? A: The DNI will provide independent analyses of any national security threats posed by transactions by incorporating the views of all appropriate intelligence agencies with respect to the transaction. The DNI does not vote and has no policy role. Q: How does the DNI's analysis fit into the CFIUS process? A: The DNI must submit his analysis within 20 days of the date when the initial notice is filed with CFIUS for review, but the DNI may supplement the analysis later on if the Committee requests additional information. Q: What role does the Secretary of Labor play in the CFIUS process? A: FINSA's proposed regulations dictate that the Secretary of Labor will identify for CFIUS any risk mitigation provisions that would violate U.S. labor laws based on the particular transaction under review. Once CFIUS finds that national security issues do exist, it will work with the parties to attempt to mitigate those issues through security agreements or other arrangements. Q: Does FINSA affect the roles of any other members of CFIUS? A: Yes. FINSA requires the Secretary of the Treasury to designate one or more lead agencies for each transaction and gives those lead agencies the authority to negotiate on behalf of CFIUS. The lead agency or agencies may also enter into and enforce mitigation agreements or conditions with the parties to address any threats to national security the transaction poses. Q: What is a lead agency? A: A lead agency is the agency or agencies under whose jurisdiction(s) the transaction’s national security issues most squarely fall. Q: How does FINSA increase Congressional oversight? A: FINSA requires that a high-level official at the Treasury Department and at the lead agency report to Congress on any foreign transaction CFIUS has reviewed and approved, and has determined that there are no unresolved national security concerns. Q: Which Members of Congress are entitled to receive the report on the CFIUS review? A: The following members are entitled to receive the report:
A: Yes, if any Members of Congress listed above request a briefing on a particular transaction for which CFIUS has concluded all action, CFIUS will provide a briefing to members and staff and will classify the briefing if the sensitivity of the information requires it. Q: Does Congress receive any sort of comprehensive report on the transactions CFIUS reviews, or does it just receive the individual reports as the reviews occur? A: FINSA requires that the Secretary of the Treasury transmit an annual report to the Chairman and Ranking Member of the committee of jurisdiction in the House and Senate on all reviews and investigations of foreign transactions completed. Q: Can members of the public ever gain access to the annual reports? A: Yes, but only an unclassified version, consistent with safeguarding national security and privacy. Q: With Congresses increased oversight responsibilities, will the process become even more politicized? A: Absolutely. | |