White House Supports Laws to Curb Foreign Buys of Key US Tech
Xu Wei
DATE:  Jun 28 2018
/ SOURCE:  Yicai
White House Supports Laws to Curb Foreign Buys of Key US Tech White House Supports Laws to Curb Foreign Buys of Key US Tech

(Yicai Global) June 28 -- US President Donald Trump supports a bill now before the US Congress to restrict acquisitions of key US technologies by foreign entities, he said in a statement issued yesterday.

The Foreign Investment Risk Review Modernization Act currently under congressional review has made significant progress in protecting key US technologies from foreign acquisitions, Trump said in the statement.

After consulting with policy advisers to evaluate the bill and discussing it with lawmakers, the president believes that the legislation will provide additional tools to counter "predatory investment practices" that threaten America's technological leadership, national security, and future economic prosperity. He urged the US Congress to pass the bill as soon as possible.

After the legislation comes into force, Trump will direct government agencies to implement it as soon as possible to resolve the issue of foreign acquisitions of US key technologies that emerged during the Section 301 investigation, the statement said. If the US Congress fails to pass the act, Trump will instruct agencies to forge new policy weapons to wield against all countries.

The US treasury department and other agencies have evaluated various options to shield sensitive US technologies from a foreign acquisition in the past few months.

They eventually concluded that the Committee on Foreign Investment in the US (CFIUS) mechanism after its amendment by Congressional legislation is the best way to protect US technology, rather than introducing additional administrative measures, a senior US government official said at a telephone briefing for the media earlier in the day. CFIUS is an inter-departmental agency under the US treasury department responsible for the national security review of foreign mergers and acquisitions.

The treasury department will introduce measures to restrict Chinese entities from getting their hands on US key technologies by June 30, the White House had previously said.

Both the Senate and the House of Representatives have passed their own versions of the Foreign Investment Risk Review Modernization Act and ironing out the differences between the two will be the next step before drafting a final harmonized version.

After the Senate and the House pass the bill, Trump must sign it for it to become law. Several months will thus likely elapse before the law ultimately takes effect.

Editor: Ben Armour

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Keywords:   US,Donald Trump,M&A