The US Treasury Department has proposed an update to the Committee on Foreign Investment in the United States (CFIUS) rules that would expand the committee's jurisdiction over foreign real estate purchases. The proposed rules would allow CFIUS to review foreign investment in existing US businesses as well as greenfield investments. The update comes in response to concerns over Chinese investment in US real estate near sensitive locations, such as military bases. The proposed rules would add a list of about fifty sensitive sites to the real estate rules' appendix, expanding CFIUS's jurisdiction to any land acquisition by foreign buyers that occurs close to a listed government site. The new rules could potentially restrict Chinese greenfield investment in designated areas near sensitive sites. However, the rules would only apply to future transactions and not retroactively [43a7bfc3].
The Committee on Foreign Investment in the United States (CFIUS) is facing increased scrutiny over its role in monitoring foreign property transactions near military installations. The US Treasury Department plans to broaden oversight of foreigners' property transactions near military bases, with concerns over Chinese land purchases growing. The proposed rule would add more than 50 facilities to a list of sites where surrounding property transactions may be reviewed by CFIUS, bringing the total to 227. The concern is that foreign purchases or leases of certain properties could allow them to collect intelligence or expose national security activities to foreign surveillance risks. This move by the US Treasury Department represents the largest expansion of CFIUS' review authority since a 2018 law was enacted [adf49c1c].
The expansion of CFIUS' review authority comes as Congresswoman Nikki Budzinski and Congressman Mike Bost sent a letter to U.S. Treasury Secretary Janet Yellen urging CFIUS to review the recent acquisition of the Cahokia grain terminal by COFCO International, a Chinese state-run company. The acquisition of the Cahokia facility, located near St. Louis, has raised concerns about national security and the region's agricultural economy. COFCO International already owns multiple locations across the U.S. for commercial sales, port terminals, and warehouse storage. Budzinski and Bost requested that CFIUS consider these concerns and investigate the acquisition further [68b784d7].
CFIUS' role in monitoring foreign property transactions near military installations has come under scrutiny in relation to Commonwealth Fusion Systems, a company working on fusion technology. Commonwealth Fusion Systems has received significant investments, including from foreign entities, raising concerns about potential foreign control and the implications for national security. The success of Commonwealth Fusion Systems in developing fusion technology could have significant economic implications for the U.S. economy. Given the potential economic impact and the foreign investments involved, it is understandable why some believe CFIUS should be monitoring the company closely [f40832d9].