Cornyn, Casey Outbound Investment Amendment Passes Senate
WASHINGTON – U.S. Senators John Cornyn (R-TX) and Bob Casey (D-PA) released the following statements after their amendment to the National Defense Authorization Act to increase transparency of investments by American entities in sensitive technologies in China, Russia, Iran, and North Korea passed the Senate:
“When American companies invest in technology like semiconductors or AI in countries like China and Russia, their capital, intellectual property, and innovation can fall into the wrong hands and be weaponized against us,” said Sen. Cornyn. “This bill would increase the visibility of these investments, which will help the U.S. gather the information needed to better evaluate our national security vulnerabilities, confront threats from our adversaries, and remain competitive on the global stage.”
“The United States is at a crossroads; we can take control of our own future or we can let China eat our lunch,” said Sen. Casey. “The Outbound Investment Transparency Act is a strong first step to give the U.S. insight into the risks of allowing American national security technology and know-how get into the hands of our adversaries. Today’s overwhelming vote shows that there is bipartisan consensus to meet the challenge posed by the Chinese government and I hope that this is just the start.”
The Outbound Investment Transparency Act would establish a program to require covered U.S. entities to notify the U.S. Department of the Treasury 14 days prior to making various investments in sensitive technologies in countries of concern, such as China, Russia, Iran, and North Korea, and 14 days after secured transactions. It would also direct the Department of the Treasury, in coordination with the U.S. Department of Commerce, to establish a process to receive notifications of such investments. Lastly, the legislation would require the U.S. government to coordinate with allies and partners on implications of a notification process and work to implement outbound investment screening in partner countries.
The legislation would cover the following investments:
- Interest in short- or long-term debt obligations;
- Establishment of subsidiaries;
- Joint ventures;
- And “know-how,” including transfers of technology through operational cooperation, board representation, or the provision of business services.
De Minimis transactions, transactions in the national interest, and ordinary business transactions would be excluded from this legislation.
The legislation would cover the following sensitive technologies:
- Advanced semiconductors and microelectronics;
- Artificial Intelligence;
- Quantum information science and technology;
- Satellite-based communications;
- And networked laser scanning systems with dual-use applications.