The Exon-Florio National Security Test for Foreign Investment

The Exon-Florio provision grants the President the authority to block the proposed or pending foreign acquisitions of persons engaged in interstate commerce in the United States that threaten to impair the national security. This provision came under intense scrutiny with the proposed acquisitions in 2006 of major operations in six major U.S. ports by Dubai Ports World and of Unocal by a Chinese corporation. The debate that followed reignited long-standing differences among Members of Congress and between the Congress and the administration over the role foreign acquisitions play in U.S. national security. The public debate underscored the differences between U.S. policy, which is to actively promote internationally the national treatment of foreign firms, and the concerns of some over the way this policy applies to companies that are owned by foreign governments that have unlimited access to the Nations industrial base. Much of this debate focused on the activities of a relatively obscure committee, the Committee on Foreign Investment in the United States CFIUS and the Exon-Florio provision, which gives the President broad powers to block certain types of foreign investment. In the first session of the 110th Congress, Congresswoman Maloney introduced H.R. 556, the National Security Foreign Investment Reform and Strengthened Transparency Act of 2007, on Jan 18, 2007. The measure was approved by the House Financial Services Committee on February 13, 2007, with amendments, and was approved with amendments by the full House on Feb 28, 2007, by a vote of 423 to 0. On June 13, 2007, Senator Dodd introduced S. 1610, the Foreign Investment and National Security Act of 2007. On June 29, 2007, the Senate adopted S. 1610 in lieu of H.R. 556 by unanimous consent. On July 11, 2007, the House accepted the Senates version of H.R. 556 by a vote of 370-45 and sent the measure to the President, who signed it on July 26, 2007. It is designated as P.L. 110-49.