Amends the Defense Production Act to authorize the President or his designee to conduct a review to determine whether an investigation should be conducted to determine the effects on national security of certain mergers, acquisitions, and takeovers by foreign persons which could result in foreign control of persons or activities engaged in interstate commerce in the United States. (Currently, there is no review process prior to such investigation.)
Authorizes the Secretaries of Commerce and Defense, if the President's designee is an interagency committee, to collect and analyze such takeover proposals, identify the plans of the acquiring foreign person with respect to the transfer of technology, and make recommendations to the committee concerning the need to conduct such an investigation. Authorizes the Secretaries to: (1) solicit assurances from the foreign person that their plans will not impair the national security; (2) conduct a review to determine if such assurances are being implemented and complied with; and (3) request that the interagency committee conduct an investigation if the Secretary of Commerce finds that a foreign person is not appropriately implementing or complying with the assurances. Requires a foreign person making a direct investment in a United States person (entity) to file with the President or his designee an advisement which discloses specified information with respect to such investment.
Requires each agency serving on the interagency committee to identify technologies which are essential to the industrial and technological base of the United States, a list of which shall be published in the Federal Register. Requires the Secretaries to identify, in connection with any merger, acquisition, or takeover involving a foreign person, any essential technology which is involved. Requires an investigation to be commenced if an essential technology is found to be involved. Requires the foreign person, as part of such investigation, to make assurances that the involvement of such essential technology will not adversely affect the national security by eroding the industrial and technological base of the United States.
Authorizes the President to suspend or prohibit any merger, acquisition, or takeover by a foreign person in the United States if the President believes that national security might be impaired by the effects such takeover could have on the industrial or technological base of the United States.
Allows General Accounting Office officials and employees access to information collected by the Secretary of Commerce concerning foreign direct investment in the United States for purposes of responding to requests for information and conducting research and analysis for the Congress. Directs the President to report to the Congress the results of a study conducted to identify trends in foreign direct investment in the United States.
HR 5225 IH 101st CONGRESS 2d Session H. R. 5225 To amend the Defense Production Act of 1950 to clarify and strengthen provisions pertaining to national security takeovers. IN THE HOUSE OF REPRESENTATIVES June 28, 1990 Mr. WALGREN (for himself, Ms. OAKAR, Mr. GEPHARDT, Mr. BRYANT, Mr. ECKART, Mr. SIKORSKI, Mr. MINETA, and Mr. LEVINE of California) introduced the following bill; which was referred jointly to the Committees on Banking, Finance, and Urban Affairs, Energy and Commerce, and Foreign Affairs A BILL To amend the Defense Production Act of 1950 to clarify and strengthen provisions pertaining to national security takeovers. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. ACTIONS OF THE COMMERCE AND DEFENSE DEPARTMENTS. Section 721(a) of the Defense Production Act (50 U.S.C. App. 2170(a)) is amended-- (1) by striking out `The President or the President's designee may' and inserting in lieu thereof the following: `(1) INVESTIGATIONS- The President or the President's designee may', (2) by striking out `make an investigation to determine' and inserting in lieu thereof `conduct a review to determine if an investigation should be conducted to determine', (3) by striking out `If it is determined' and inserting in lieu thereof `If upon such review it is determined', and (4) by adding at the end the following: `(2) Authority of the Commerce and Defense Departments- `(A) INFORMATION AND RECOMMENDATION- If the President's designee under paragraph (1) is an inter-agency committee, the Secretary of Commerce and the Secretary of Defense shall for purposes of the review and investigations under paragraph (1)-- `(i) collect and analyze information pertaining to mergers, acquisitions, and takeovers by foreign persons and may receive from any agency of the Federal Government information and views on such mergers, acquisitions, and takeovers, and `(ii) identify in detail the plans of the acquiring foreign person with respect to the transfer of technology from the United States to foreign persons and the transfer of foreign technology to the United States and any other factor that may affect the viability of the United States person being acquired, `(iii) make recommendations to the members of the inter-agency committee concerning the need to conduct such an investigation. If the Secretary of Commerce and the Secretary of Defense recommend that an investigation be initiated, the investigation shall be initiated. `(B) ASSURANCES- `(i) The Secretary of Commerce and the Secretary of Defense acting on behalf of an inter-agency committee which is the designee of the President may, in connection with a review and investigation under paragraph (1) of a merger, acquisition, or takeover of a United States person by a foreign person, solicit assurances from the foreign person that the plans and intentions of such person for the future operation of the United States person will not impair the national security. Such assurances shall be in writing, shall be made available to each member of the inter-agency committee, and shall be published in the Federal Register by the Chairman of the inter-agency committee not later than 10 days of their receipt by the committee unless within that period the foreign person withdraws its notice of the merger, acquisition, or takeover. `(ii) At least annually the Secretary of Commerce shall conduct a review to determine if assurances provided under clause (i) are being implemented and complied with in an appropriate manner. Not later than March 1 of each year, the Secretary shall report to Congress the results of the review under this clause. `(iii) If the Secretary of Commerce finds that a foreign person is not appropriately implementing or complying with an assurance provided under clause (i) respecting a merger, acquisition, or takeover, the Secretary shall immediately request that the inter-agency committee conduct an investigation under paragraph (1) and the inter-agency committee shall grant such request without delay or qualification. If the Secretary makes such a finding, the President may bring a civil action to impose an injunction on the activities of the foreign person in connection with the merger, acquisition, or takeover. `(C) ADVISEMENT- If a foreign person, including a United States subsidiary of a foreign person, files a form with the Secretary of Commerce identifying a direct investment of such person in a United States person, such person shall also submit an advisement to the President or the President's designee which shall be attached to such form and which shall contain the following information: The name and address of the United States person being acquired or invested in, the name and address of the ultimate beneficial foreign person that is acquiring or investing in the United States person, and whether notice of the merger, acquisition, or takeover has been given the President under paragraph (1). Failure to provide such advisement shall be subject to the same penalty as the failure to submit the form to which the advisement is to be attached. `(D) ESSENTIAL TECHNOLOGIES- `(i) Each agency that serves on the inter-agency committee which is the President's designee shall identify, by March 1 of each year following the date of the enactment of this subparagraph, technologies which are essential to the industrial and technological base of the United States. A list of such technologies shall be published in the Federal Register not later than March 20 of each year. `(ii) In connection with any merger, acquisition, or takeover for which notice has been provided to the President or the President's designee, the Secretary of Commerce and the Secretary of Defense shall identify any essential technology which is involved. If the Secretary of Commerce or the Secretary of Defense finds that such an essential technology is involved in any merger, acquisition, or takeover for which notice has been given, the Secretary of Commerce or the Secretary of Defense shall request that the President's designee, which is an inter-agency committee, begin an investigation under paragraph (1) and such request shall be granted without delay. The Secretary of Commerce and the Secretary of Defense shall solicit appropriate assurances, which may include the following, from the foreign person involved in such merger, acquisition, or takeover to ensure that the foreign person (I) will not take actions to impair the national security by eroding the industrial and technological base of the United States, (II) will continue necessary research and development, and (III) will not disrupt the supply of customers in the United States. The Secretary of Commerce and the Secretary of Defense shall make such assurances available to each member of the inter-agency committee and shall publish in the Federal Register notice of the receipt and content of such assurances. If a foreign person does not provide an assurance solicited under this subparagraph, such failure may be considered the basis for determining that the merger, acquisition, or takeover impairs national security. `(E) REPORTS- `(i) Not later than the 23d day of the 30-day review period under paragraph (1), the Secretary of Commerce and the Secretary of Defense shall submit to each member of the inter-agency committee which is the President's designee a report containing information and analysis concerning the impact of the merger, acquisition, or takeover which is being reviewed and any information and views submitted by any Federal agency on such merger, acquisition, or takeover. `(ii) If an inter-agency committee conducts an investigation under paragraph (1), the Secretary of Commerce and the Secretary of Defense shall, not later than the 40th day of the investigation, submit to each member of the committee a report concerning the results of the investigation and recommendations to be made to the President.'. SEC. 2. FINDINGS OF THE PRESIDENT. Section 721(d)(1) of the Defense Production Act (50 U.S.C. App. 2170(d)(1)) is amended to read as follows: `(1) there is credible evidence that leads the President to believe that national security might be impaired by the effect the merger, acquisition, or takeover could have on the industrial and technology base of the United States, and'. SEC. 3. FACTORS TO BE CONSIDERED. Section 721(e)(3) of the Defense Production Act (50 U.S.C. App. 2170(e)(3)) is amended to read as follows: `(3) the control of domestic industries and commercial activity by foreign citizens as it affects the industrial and technological base of the United States.'. SEC. 4. ACCESS TO DATA. For purposes of responding to requests for information and conducting research and analysis for Congress, duly authorized officials and employees of the General Accounting Office shall have access to information collected by the Secretary of Commerce concerning foreign direct investment in the United States. Such access for duly authorized officials and employees of the General Accounting Office shall be in accordance with procedures and guidelines established by the Comptroller General which are designed to ensure that no information is disclosed to persons not authorized by the Congressional request to have such information which may identify individual foreign investors or the United States firms in which they invest. SEC. 5. STUDY. Not later than one year after the date of the enactment of this Act, the President shall report to the Congress concerning the results of a study initiated by the President to identify trends in foreign direct investment in the United States. Such report shall identify which industry sectors, technologies, or types of firms should be preserved for research and development and production in the United States ownership and the extent to which suppliers to prime contractors with the Department of Defense are, because of foreign investment, unable to provide materials and components needed for the manufacture of defense weapons.
Introduced in House
Introduced in House
Referred to the House Committee on Banking, Finance + Urban Affrs.
Referred to the House Committee on Energy and Commerce.
Referred to the House Committee on Foreign Affairs.
Referred to the Subcommittee on Arms Control, International Security and Science.
Referred to the Subcommittee on International Economic Policy and Trade.
Referred to the Subcommittee on Economic Stabilization.
Referred to the Subcommittee on Commerce, Consumer Protection and Competitiveness.
Subcommittee Hearings Held.
Forwarded by Subcommittee to Full Committee (Amended).
Subcommittee Consideration and Mark-up Session Held.
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