The Foreign Investment and National Security Act of 2007: An Assessment of Its Impact on Sovereign Wealth Funds and State-Owned Enterprises
Research Handbook on Sovereign Wealth Funds and International Investment Law (Edward Elgar, 2015)
39 Pages Posted: 30 Jan 2014 Last revised: 1 Dec 2015
Date Written: January 29, 2014
In 2007, the U.S. Congress passed the Foreign Investment in the United States Act (FINSA), the most recent in a series of calibrations to a basic regulatory framework that is now nearly 40 years old. FINSA has particularly significant effects on investment by sovereign wealth funds (SWFs) and state-owned enterprises (SOEs). Indeed, FINSA is properly understood as a response to SWF and SOE activity, and is designed to provide a framework in which U.S. regulators can weigh the particular risks presented with investment by state-controlled entities. Although in general FINSA has performed ably and as intended in its first five years of implementation, balancing the risks associated with SOE and SWF investment in a competitively neutral way has historically been a challenge, and now seems to be even more challenging after the passage of FINSA.
Keywords: CFIUS, FINSA, FDI, sovereign wealth funds, state-owned enterprises
JEL Classification: K2, K20, K22, K23, K33
Suggested Citation: Suggested Citation