"DeLauro Legislation Would Broaden Reach of CFIUS Reviews to Assess 'Net Benefit' of Foreign Investment"

Congresswoman Rosa DeLauro (D-CT), who strongly opposed the Chinese acquisition of Smithfield, has introduced legislation that would radically overhaul the review of foreign investment by the Committee on Foreign Investment in the United States (CFIUS), the governmental panel that assesses the impact of foreign acquisitions on national security. 

This Stroock Special Bulletin provides an overview of the DeLauro bill, HR 5581, which would extend the scope of CFIUS reviews to include not only an assessment of the national security impact of a merger, takeover, acquisition by or with a foreign person, but also the "net benefit" of the transaction – namely, the effect of the transaction "on the level of economic activity" in the United States, including "the level and quality of employment" (among other factors) and "the effect of the proposed or pending transaction on productivity, industrial efficiency, technological development, technology transfers, and product innovation," as well as the compatibility of the proposed action with U.S. "cultural policies," and the "effect on the public health, safety, and well-being of United States consumers."  HR 5581 would also, for the first time, extend reviews to "construction of a new facility in the United States by any foreign person," regardless of whether the investment entailed a merger, acquisition, or takeover.