FIRRMA and National Security

17 Pages Posted: 20 Aug 2018 Last revised: 21 Aug 2018

See all articles by Paul Rose

Paul Rose

Ohio State University - Moritz College of Law; Bocconi University - BAFFI Center on International Markets, Money, and Regulation; Tufts University - The Fletcher School of Law and Diplomacy; Fundación Instituto de Empresa, S.L. - IE Business School

Date Written: August 10, 2018

Abstract

As a result of growing American insecurity related to Chinese investment, the U.S. Congress is again revising its foreign investment law, less than a dozen years after the last major overhaul. This brief article, prepared for the 2018 Annual General Conference of the European China Law Studies Association, will describe the history of U.S. foreign investment regulation and its chief regulator, the Committee on Foreign Investment in the U.S. The article then turns to the development of the recently proposed Foreign Investment Risk Review Modernization Act (FIRRMA), with particular focus on how FIRRMA is meant to respond to U.S. concerns about the rise of China as a technological power and, more specifically, about whether China is unfairly using investments in sensitive U.S. technologies to facilitate that rise. In previous versions of U.S. foreign investment regulations, Congress was careful to avoid what might have been perceived as discriminatory treatment of a particular country in its foreign investment laws. That is not the case with FIRRMA, which targets China in a variety of ways. Yet, there is significant uncertainty surrounding the final CFIUS rules enacting FIRRMA. This uncertainty is magnified by the Trump administration’s apparent willingness to evaluate foreign investment through a transactional lens, rather than relying on a stable policy view that would benefit both foreign acquirers and U.S. firms and reduce the risk that other countries will take a similarly transactional tack in response to U.S. policies.

Keywords: foreign investment, CFIUS, FIRRMA, Chinese investment, national security

JEL Classification: K2, K23, K33

Suggested Citation

Rose, Paul, FIRRMA and National Security (August 10, 2018). Ohio State Public Law Working Paper No. 452, Available at SSRN: https://ssrn.com/abstract=3235564 or http://dx.doi.org/10.2139/ssrn.3235564

Paul Rose (Contact Author)

Ohio State University - Moritz College of Law ( email )

55 West 12th Avenue
Columbus, OH 43210
United States

Bocconi University - BAFFI Center on International Markets, Money, and Regulation ( email )

Milano, 20136
Italy

Tufts University - The Fletcher School of Law and Diplomacy ( email )

Medford, MA 02155
United States

Fundación Instituto de Empresa, S.L. - IE Business School ( email )

Calle Maria de Molina 12, Bajo
Madrid, Madrid 28006
Spain

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