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Despite objections from the business establishment, the U.S. Senate Committee on Banking, Housing and Urban Affairs unanimously approved an overhaul of a secret panel that reviews foreign-U.S. deals for national security concerns. “As critical as foreign investment is, our national security is paramount,” said Senate Banking Committee Chairman Richard Shelby, R-Ala., during a recent committee meeting. “Once bargained away, it may never be recovered.” Lawmakers voted, 20-0, to approve legislation, introduced by Shelby, to alter the interagency Committee on Foreign Investment in the U.S. (CFIUS). Most of the support for an overhaul came after disclosure that Dubai, United Arab Emirates-controlled DP World would acquire operations at six U.S. ports. DP World backed down in the face of an uproar. Although lawmakers agreed that CFIUS needed reform, some provisions were more controversial than others. One of these gives a CFIUS member the power to double an informal 30-day transaction review. CFIUS normally completes informal reviews in a month, but some can be followed by a formal 45-day probe. Senator Christopher Dodd, D-Conn., planned to offer an amendment to kill this provision, but allow a CFIUS agency to add 30 days to the 45-day formal investigation. “I understand the process needs to be made better, but not necessarily longer,” Dodd said. But after it appeared the majority of senators would not support the amendment, Dodd withdrew it. Shelby pointed out that giving CFIUS members an additional 30 days could be useful. Todd Malan, president of Washington-based Organization for International Investment, said he worried that a 60-day review would discourage foreign investment, particularly if just one CFIUS agency can ask for it. Hagel’s amendment Malan and business groups were more satisfied with a provision, introduced by Senator Chuck Hagel, R-Neb., that would require acquisitions affecting U.S. infrastructure to undergo the formal 45-day review. Hagel’s provision changed Shelby’s draft legislation, which would require all deals affecting infrastructure to undergo formal 45-day investigations. The business groups worry that Shelby’s language would have discouraged foreign nonstate-owned companies from buying assets in the United States, even if the deal does not affect U.S. national security. The legislation would create a new CFIUS post of vice chairman, which the secretary of defense would fill, and would give the director of national intelligence a permanent seat on the panel.

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