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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (20953)	8/9/2007 8:46:06 AM
From: elmatador	Respond to of 217917

FDI in US to Get More ''Transparent'' Scrutiny New bill crafted to preserve draw of US economy, address security concerns The US government’s scrutiny of some foreign direct investment deals is likely to become more transparent and predictable without making the business climate less friendly to foreign investors, according to several government officials and business representatives. Under legislation recently passed by the House and Senate and expected to be signed by President Bush, Congress and the business community would get greater access to the administration’s reviews of proposed foreign investments that have potential implications for US national security. The investment reviews are routinely conducted by the government’s interagency Committee on Foreign Investment in the United States (CFIUS), whose work until very recently has been shrouded in secrecy. Foreign investors have complained that dealing with the opaque review process based on vague criteria has complicated their business decisions. The final bill will “provide the investors more confidence and knowledge about what we are trying to do when we look at national security issues,” said Under Secretary of Treasury Clay Lowery recently. Officials and lawmakers from both parties have acknowledged that because of terrorism-related concerns, the US government must scrutinize thoroughly foreign companies’ transactions that may affect US national security. But they also say the legislation was crafted carefully to avoid discouraging foreign investment in the US. "We showed we haven’t decided to secede from the world,” said House Financial Services Committee Chairman Barney Frank, who was involved in crafting the original legislation. Deputy Secretary of the Treasury Robert Kimmitt said the bill “strikes the important balance between protecting national security … and advancing the open investment policy.” The Treasury Department issued his prepared statement after the House of Representatives approved the measure, which already had been passed by the Senate. All major US business groups, including the Organization for International Investment, which represents foreign companies doing business in the US, have supported the bill. Jonathan Huneke, vice president of the US Council for International Business (USCIB), said the legislation significantly would improve the review process. The USCIB is a business interest group that promotes free trade and open investment worldwide. Lawmakers have attempted to revamp the process since the CFIUS approval of a 2006 deal by a Dubai state-owned company, Dubai Ports World (DP World), to acquire container terminals at several US ports caused an uproar in Congress. Christopher Wall said that the bill would give Congress “greater confidence in the CFIUS review process,” making less likely future political controversies over foreign investments. Wall is an international trade attorney in the Washington office of Pillsbury Winthrop Shaw Pittman LLP. The bill would require greater disclosure to Congress of foreign investment reviews. It also would expand CFIUS authority to review acquisitions of power plants, ports, toll roads and other critical facilities, and would require a 45-day investigation to follow the standard 30-day review of deals by companies controlled by foreign governments. In addition, it would provide for the more frequent use of so-called “mitigation agreements” that require investors to take certain actions to address perceived national security risks. According to the White House, scrutiny of foreign direct investments has not affected US openness to foreign investment. Since 2000, CFIUS has reviewed on average only about 5% of such deals per year, restricting or blocking only a few, according to a recent Treasury Department news release. Foreign direct investment (FDI) in the US has increased consistently since 2002, with a sharp upsurge in 2006 that brought it to $183 billion. But FDI is still far from the $321 billion peak in 2000, according to the US Commerce Department’s Bureau of Economic Analysis. The Bush Administration has expressed concern that doubts and misperceptions in other countries created by the DP World controversy might dampen investment. In a statement made in early May, President Bush said that although his administration “will continue to take every necessary step to protect national security,” it also is “committed to ensuring that the United States continues to be the most attractive place in the world to invest." Some countries have announced they are introducing measures that are intended to emulate the US investment review process, according to Treasury’s Lowery. But both USCIB's Huneke and the group’s chairman, William Parrett, worry that such measures may be used instead to protect domestic industries. Canada, Germany, Japan, China, India, and Russia recently imposed or are considering restrictions on foreign purchases of companies or real estate in their countries. Governments, Parrett said, “have used informal barriers to restrict foreign investment, such as declaring that certain industries are off-limits or that certain companies are untouchable.”