WASHINGTON (Reuters) - A bipartisan group of lawmakers in the U.S. Senate and House of Representatives will introduce bills as soon as Monday to toughen U.S. foreign investment rules amid growing concern about Chinese deals, according to a source familiar with the legislation.
Senator John Cornyn, a member of the Republican leadership who is on the Senate Intelligence Committee, will introduce a Senate bill to broaden the government’s power to stop foreign purchases of U.S. firms by strengthening the Committee on Foreign Investment in the United States (CFIUS).
CFIUS is an interagency panel led by the Treasury Department that reviews proposed transactions to review national security concerns.
Rep. Robert Pittenger, a North Carolina Republican, will introduce an identical bill in the House of Representatives.
At least four Democrats will back the bills, including Senator Amy Klobuchar of Minnesota, Rep. Rosa DeLauro of Connecticut and Rep. Dave Loebsack of Iowa, said a source who spoke on background to protect business relationships. “The likelihood of Congress acting on this is pretty significant,” said the source.
Rep. Denny Heck, a Democrat from Washington, said he was concerned about China at least partly because of allegations of stolen U.S. intellectual property.
“China’s actions are clear – they are cheating the system. They are evading the rules meant to prevent them from accessing technology critical to our national security and we need to do something to stop them sooner rather than later,” he said in a statement. “With these changes, we hope to modernize and update the law in order to meet today’s threats from around the globe.”
CFIUS already has a reputation for being tough on high-tech deals involving China in particular, and has blocked transactions that involve sophisticated semiconductors.
It has become more conservative since President Donald Trump was inaugurated amid growing political and economic tensions between the United States and China. Since the inauguration, the panel has balked at approving a broader range of deals from China, according to lawyers who specialize in representing proposed transactions to the board.
The bills would expand CFIUS’ power to look at smaller investments and joint ventures, according to sources who have read drafts of the bills.
There have been calls for “green field” investment to be subject to CFIUS scrutiny, but under the bills CFIUS will only review these to ensure they are not close to sensitive military installations, the first source said. A green field investment is when a parent company starts a new firm overseas from the ground up.
Reporting by Diane Bartz. Additional reporting by Rick Cowan; Editing by Chris Sanders and Nick Zieminski