May 07, 2024

Why the Committee on Foreign Investment in the U.S. has been getting busier

It’s been a couple weeks since President Joe Biden signed a bill into law that will require ByteDance, the Chinese company that owns the social media app TikTok, to sell it off by January or face an outright ban in the United States.

The case is a little unusual, because the details of deciding whether or not a foreign company can invest in a U.S. business, or own it outright, is usually left to the Committee on Foreign Investment in the United States, or CFIUS.

The committee is made of representatives from a grab bag of government agencies with big national security responsibilities, including the departments of Defense and Homeland Security, and agencies with economic and commercial responsibilities, including the Commerce Department and the U.S. Trade Representatives’ office.

The committee’s goal is to look at foreign investment and figure out whether it raises any national security issues, said Emily Kilcrease, director of the energy, economics and security program at the Center for a New American Security. She used to be a staffer at the Trade Representative’s office and the Commerce Department, and has represented both agencies on CFIUS.

Then the committee will decide whether to make changes to the deal in order to assuage the government’s concerns.

“It’s kind of a flexible definition of national security, and it can take into consideration economic considerations, but it always has to come back to a national security risk,” Kilcrease said.

For example, a foreign company that wants to buy an American military supplier might present a national security risk. Kilcrease said there’s a wide range of transactions where the government might have national security concerns.

“Protection of critical infrastructure, including cybersecurity elements — that counts as national security,” Kilcrease said. “We’re worried about supply chains more broadly these days. So that would certainly be something that would be considered national security.”

Listen to the full segment from Marketplace.

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