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GAO Report on National Security Risks of Foreign Investment in the U.S.

The following is the July 2018 Governement Accountability Office report, Committee on Foreign Investment in the United States: Action Needed to Address Evolving National Security Concerns Facing the Department of Defense.

The Department of Defense (DOD) faces challenges identifying and addressing evolving national security concerns posed by some foreign investments in the United States.

  • Resources: DOD’s Office of Manufacturing and Industrial Base Policy represents the department and coordinates DOD’s participation on the Committee on Foreign Investment in the United States (CFIUS). As a committee member, DOD co-leads CFIUS’s review and investigation of transactions between foreign acquirers and U.S. businesses where it has expertise. DOD co-led 99 transactions in calendar year 2017, or 57 percent more transactions than it co-led in 2012, while the annual authorized positions increased from 12 to 17 during that same time period. DOD’s workload has also been affected by the volume and complexity of the transactions it is responsible for co-leading, in addition to other CFIUS responsibilities, such as identifying transactions that foreign acquirers do not voluntarily file with CFIUS. DOD has taken some steps to address its resource limitations, but has not fully assessed the department-wide resources needed to address its growing workload/
  • Emerging Technology and Proximity: DOD officials identified some investments that pose national security concerns from foreign acquirers gaining access to emerging technologies or being in close proximity to critical military locations, which, according to officials, cannot always be addressed through CFIUS because the investments would not result in foreign control of a U.S. business. DOD and Department of the Treasury (Treasury) officials said addressing these investments may require legislative action. DOD is taking steps to identify critical emerging technologies and military locations that should be protected from foreign investment. However, DOD has not fully assessed risks from these types of foreign investment or what additional authorities, if any, may be necessary for it to address them.
  • Policy: DOD’s CFIUS Instruction does not clearly identify some reviewer responsibilities or processes for identifying transactions that foreign acquirers do not voluntarily file with CFIUS. The policy is also outdated and inconsistent with current practices. DOD’s CFIUS Instruction and federal internal control standards emphasize the importance of assessing organizational structures, policies, and procedures to respond to risks. Without assessing resources needed to address its CFIUS workload and risks from foreign investment in emerging technologies or in proximity to critical military locations, and ensuring its policies and processes clearly reflect the issues facing the department, DOD is at risk of being unable to respond to evolving national security concerns.

This is a public version of a sensitive report that GAO issued in April 2018. Information that DOD and Treasury deemed sensitive has been omitted.

  • Leroy

    Yeah well Chinese firms Huawei and maybe even retaliation against ZTE (again) is coming after China messed with the Qualcom – NXPI merger. Payback if you will. Gonna be quite a few Chinese firms paying a price after that debacle.

    China wants a trade war? They’ve just expanded it and now, beyond simple tariffs, they’ve got one! 5G isn’t gonna be cornered by Beijing, not if U.S. firms, which are far more innovative, can help it.

    PS. IP theft? That’s gonna stop too thanks to POTUS and his trade team. Make no mistake, U.S. national security is on the line and all levels of government have got to become involved. They are taking part in Beijing! Every last Ministry.

    • Duane

      Name one action taken by the Putin-Trump administration to stop Chinese theft of either military or commercial IP.

      Starting a trade war with tariffs – i.e., new taxes on US consumers and manufacturers, which are returned in kind with retaliatory tariffs on US products that kill American jobs and farm markets – do absolutely nothing, nada, zilch to stop IP thievery, which has already been reported as ACCELERATING this year by China.

      • Leroy

        Stop.

        • Duane

          Stop shilling for Trump, and that will end the discussion. Pretty much most of your commentary of late is propounding the wonders of Trump and Trumpism.

          • vetww2

            Hey, lawyer, stick to facts and drop the politjcs and polemics!

          • Duane

            Responding to Leroy’s shilling for Trum. If he stops making hero worship comments about Trump, I’ll stop telling truthful rebuttals.

            Live by the sword, die by the sword.

      • proudrino

        Hey Duane,

        At least our current President is doing something about China’s intellectual theft. The last couple of Presidents just gave lip service to the issue without doing a thing. Not that I would expect a rabid Trump-hater like you to look at the situation with any integrity. How exactly would you commies stop intellectual theft?

        • Duane

          But he is actually not doing anything to stop IP theft … that is the point. Levying tariffs on Chinese consumer products has exactly zero effect on Chinese industrial espiinahe, none, zip, nada.

          The only effects are on US consumers and manyfacturers, via higher prices and lost jobs.

          • Mr. Speaker

            Exactly.
            If he really wanted to do something about Chinese IP theft in the DoD he would change DoD hiring practices and modify requirements within DoD contracts in regards to who the vendors employ on those contracts.

  • Ser Arthur Dayne

    I think it’s time to realize Progressive-ism is the real threat to national security.

    • Mr. Speaker

      Actually ignorance is the real threat to national security and we see that daily in the POTUS tweets and from his followers.

      • Ser Arthur Dayne

        Boooooooo.

  • proudrino

    Hillary Clinton and Barak Obama sold off 25% of America’s uranium stock to a Russian Oligarch for personal profit to the Clinton Foundation and Obama library. Where’s the concern over this internal corruption? In other words…. lock them up!

    • Mr. Speaker

      OMG….. this again……. and the % keeps rising with each telling
      Facts matter
      Research is your friend.

    • TomD

      I don’t care if it was sold, all I care about is if it was shipped.

      It’s possible to own something and not be able to take it out of the country. Was it?