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Lawmakers seek ability to screen US company investments into adversaries: report

FILE – a woman walks past the logo for Google at the China International Import Expo in Shanghai, Nov. 5, 2018. Google says its Russian subsidiary is planning to file for bankruptcy because it can’t pay staff and suppliers. Russian state media reported Wednesday, May 18, 2022 that the U.S. tech company’s Russian subsidiary submitted notice of its intention to declare bankruptcy to a national registry. (AP Photo/Ng Han Guan, File)

U.S. lawmakers are pushing ahead with legislation that would screen investments from international businesses that work within adversarial nations such as China.

The Wall Street Journal reported that Congress has drafted a section in the larger Innovation and Competition Act of 2021 that would force American companies and investors to disclose certain investments in any country labeled a “foreign adversary.”

The bill would also create a new interagency panel to review investments brought to its attention and potentially block them. While the U.S. has some limitations already in place for American companies with foreign investments, the proposal is a dramatic shift in policy that would greatly expand government oversight into investments abroad.

Sens. Bob Casey (D-Pa.) and John Cornyn (R-Texas) are leading discussions on the proposal in the Senate, while multiple representatives, including Reps. Michael McCaul (R-Texas) and Rosa DeLauro (D-Conn.), are backing the measure in the House.

Lawmakers said in a joint statement released on Monday that they had discussed the proposal for the past couple months with stakeholders and the measure now has “bipartisan, bicameral support.”

“Creating an outbound investment review mechanism is a critical tool as Congress works to provide guardrails on taxpayer funds and safeguard our supply chains from countries of concern,” the statement reads, adding it would “ensure the United States is not ceding its manufacturing power in industries critical to our economic and national security to foreign adversaries.”

The measure is included in the Innovation and Competition Act, a broader piece of legislation that is intended to bolster U.S. investment and production at home while imposing sanctions and limitations on China.

Congress is pushing to bring the bill to the floor for a vote before July 4, according to The Wall Street Journal.

For the screening measure specifically, both Republicans and Democrats have narrowed the language to investments from companies operating in critical sectors, The Wall Street Journal reported, citing aides familiar with the legislation.

U.S. entities would also be required to disclose to the federal government of activities in China if they operate under a critical sector or with critical technology, including with semiconductor chips or artificial intelligence.

According to The Wall Street Journal, China is fiercely opposed to the measure, calling it unprecedented in 250 years of American history and a provision that “stretches the concept of national security and abuses state power.”

Tags Bob Casey Bob Casey China Company investments Congress John Cornyn Michael McCaul Regulation Rosa DeLauro Russia
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