Accession Number : ADA267825
Title : Analyzing National Security-Related Investments under the Exon-Florio Provision
Descriptive Note : Testimony.
Corporate Author : GENERAL ACCOUNTING OFFICE WASHINGTON DC GENERAL GOVERNMENT DIV
Report Date : 04 Jun 1992
Pagination or Media Count : 9
Abstract : The 1988 Exon-Florio Amendment to the Defense Production Act authorizes U.S. government review, and if warranted blockage, of foreign acquisitions of U.S. firms related to national security. The Amendment's review criteria, requiring credible evidence of a threat to national security, have applied in practice to a very narrow range of circumstances. The President has blocked only 1 of over 700 foreign investments reviewed under the provision, and that case involved the People's Republic of China. Foreign acquisitions of U.S. firms are reviewed on a case-by-case basis at the time they are formally proposed. At this point, if the U.S. firm is in financial difficulty, the President may be faced with limited choices--either to approve the proposed investment as a welcome capital infusion helping to maintain the firm's production in the United States or to oppose the acquisition and watch the U.S. firm suffer continued business difficulties. The Exon-Florio review process does not address public concerns about the broader issues of U.S. competitiveness in industry sectors essential to leadership in defense technology. Nor does it cover the range of international business relationships that raise technology transfer issues similar to those raised by direct equity investments.
Descriptors : *INTERNATIONAL TRADE , POLITICAL SCIENCE , NATIONAL SECURITY , INVESTMENTS , ECONOMICS
Subject Categories : Economics and Cost Analysis
Government and Political Science
Distribution Statement : APPROVED FOR PUBLIC RELEASE