In light of the increased focus on national security in the US since the attacks of 11 September last year and all that followed, some investors and lawyers have wondered whether the US Government may impose greater national security restrictions on foreign direct investment. Although some members of the US defence establishment reportedly want to increase foreign investment restrictions, the US has not departed from its historical policy of openness to foreign investment, nor does such a shift appear likely from our perspective.
However, as new technologies emerge, and as new threats are evaluated, the US Government will continue to use its authority to impose certain conditions on various kinds of foreign investments to protect national security. As in the past, foreign investors can lay the groundwork for successful investments in America by being aware of the national security review process under the Exon-Florio law (Section 721 of the Omnibus Trade and Competitiveness Act of 1988) and by understanding the roles played by various agencies in the process.
