National Security Reviews of Foreign Investment

GAO discussed the Administration's national security reviews of proposed foreign investments, focusing on the: (1) Administration's authority to review and possibly block foreign investments after the authorization period lapsed; (2) reasons for the Administration's delay in implementing a presidential divestiture order to block a foreign investment; (3) difficulties experienced by the Interagency Committee on Foreign Investment in the United States (CFIUS) in analyzing specific investments; and (4) larger public policy questions. GAO noted that: (1) CFIUS did not consider the lapse of the blocking authority as a constraint on its consideration of an investment case, since it was operating on the expectation that the authority would be renewed; (2) the overall slowdown in the U.S. economy and the general complexities of finalizing business transactions contributed to the delay in the divestiture; (3) CFIUS experienced difficulties in defining national security, determining the existence of a credible foreign threat to national security, and developing adequate data to evaluate proposed investments; and (4) public policy questions need to be addressed at a higher policy-making level and in a broader context than the case-by-case approach presently afforded by CFIUS.