To extend the temporary suspension of duty on triphenyltin hydroxide.

Madam President, section 721 of the Defense Production Act, also known as the Exon-Florio amendment, Exon-Florio, established a statutory framework for the U.S. Government to analyze foreign acquisitions, mergers, and takeovers of privately owned entities within the United States to determine whether such transactions affect the national security of the United States. The Foreign Investment and National Security Act of 2007 amends section 721 for the purpose of strengthening the process by which such transactions are reviewed and, when warranted, investigated for national security concerns. In addition, the act provides for a system of congressional notification so that Congress is able to conduct proper oversight of the national security implications of foreign direct investment in the United States to ensure that it is beneficial and has no adverse impact on U.S. national security.

Exon-Florio established a four-step process for examining a foreign acquisition: (1) voluntary notice by the companies; (2) a 30-day review to identify any national security concerns; (3) an optional 45-day investigation to determine whether identified concerns require more extensive mitigation efforts or a recommendation to the President for possible action; and (4) a Presidential decision to permit, suspend, or prohibit an acquisition in those instances where potential national security concerns cannot be mitigated.

During the standard review period, CFIUS conducts a national security analysis to determine whether any national security issues exist with a particular transaction, and if so, whether those concerns can be mitigated. In practice, companies sometime ``pre-file'' with CFIUS, providing information about the transaction in order to ensure that CFIUS has all necessary information during the formal review period. Further, companies may withdraw from the formal review in order to address concerns on the condition that they re-file promptly with CFIUS or abandon the transaction.

Therefore, while the vast majority of CFIUS transactions are approved by the end of the 30-day review, the total time devoted to transactions is sometimes longer. If national security concerns have not been resolved during the 30-day review, CFIUS can extend its review to a second stage 45-day investigation. At the end of a 45-day investigation, the transaction is sent to the President for a decision, accompanied by a CFIUS report and recommendation. Any transaction that goes to the President must be reported to Congress. Transactions that enter investigation may also be terminated before reaching the President, with the companies voluntarily withdrawing and abandoning the investment. Presidential decisions are also avoided in cases where a mitigation agreement has been reached during the investigation period and the companies withdraw from investigation and immediately refile.

Mitigation agreements, which are contracts with CFIUS or CFIUS agencies entered into by the parties to the transaction, are an important element of the CFIUS review and investigation process. These agreements are intended to mitigate possible national security threats posed by a transaction short of requiring that the parties abandon the transaction altogether. The Department of Defense, hereafter DOD, has for many years used various types of mitigation agreements under existing DOD authority and regulations such as the National Industrial Security Program Operating Manual, NISPOM, to address the impact of foreign ownership and control over companies that have classified contracts with the Pentagon or intelligence agencies. In recent years, the Departments of Justice and Homeland Security have also done so.

S. 1610 reinforces CFIUS's capacity to refuse, suspend, modify or reverse any transaction if a written notice of such transaction is not filed with CFIUS or if there is an intentional material omission or falsehood in connection with a completed CFIUS review or investigation, or an intentional material breach in any posttransaction mitigation agreement, and establishes a formal requirement that all filings with CFIUS must be complete and accurate to the best of the filing party's ability. Thus, the committee establishes a

clear signal that all violations of such notice certification should be considered in the context of title 18, section 1001, and all intentional breaches or misstatements could also lead to severe modification or divestment of an acquisition of a previously reviewed transaction at any time.

The bill also establishes a mechanism by which CFIUS can unilaterally reopen a transaction that had previously been approved. My expectation is that this authority will only be used in exceptional circumstances when no other remedies exist and where there has been an intentional breach that affects national security. For that reason, the bill requires important procedural safeguards to ensure that this authority is not used lightly--among other safeguards, it requires, for example, that the decision to reopen a case is made at the same level of seniority as is required in the bill for the approval of transactions. The bill makes clear that CFIUS can only reopen a transaction if these threshold tests are met.

Of necessity, the reviews and investigations, which contain classified evaluations of national security vulnerabilities as well as extensive proprietary business information, remain highly confidential. Given this lack of transparency, there have been concerns over the years about CFIUS's accountability to Congress and to the public, particularly with regard to fundamental questions of whether CFIUS policies are consistent with the statute, executive orders, and regulations that govern its operations and whether CFIUS policies are applied consistently from transaction to transaction.

CFIUS has explicit authority in the regulations to open a case in the event that CFIUS discovers there has been a material misstatement or omission in the information provided by the parties to the transaction. CFIUS agencies also have all of the remedies that are normally available under a contract in order to enforce the terms of the mitigation agreement. In addition, in a large number of CFIUS cases, and particularly those involving the Defense Department, CFIUS approvals can be effectively nullified simply by ending the federal agency's contracting relationship with the company. Defense-related contracts are often a central element of CFIUS transactions, so the threat of being denied a contract going forward ensures compliance with the terms of mitigation agreements or other conditions agreed to by the foreign investor.

On October 6, 2005, under the leadership of then-Chairman Richard Shelby, the Committee on Banking, Housing, and Urban Affairs conducted a hearing into the findings of the GAO report. Discussion between the GAO witnesses and Banking Committee members further highlighted deficiencies in implementation of Exon-Florio and the level of dissatisfaction with the lack of communication between CFIUS and the appropriate oversight committees of Congress. That hearing was followed on October 20, 2005, by another hearing that allowed the Banking Committee to hear directly from many of the agencies that comprise CFIUS, including the Department of the Treasury, which has the lead role in implementing Exon-Florio, as well as private sector representatives.

In late January 2006 congressional offices became aware of the proposed acquisition of terminal operations at a number of U.S. maritime ports by Dubai Ports World, hereafter DPW, an established port operator owned by the government of the Emirate of Dubai. Concern within Congress about a transaction that would transfer control of terminal operations to a company owned by a Persian Gulf emirate through whose financial system funds had been transferred to the terrorists who carried out the September 11, 2001, attacks upon the United States, and that had been a central conduit for nuclear weapons components being smuggled to hostile regimes, provided further impetus for review of the manner in which foreign transactions were being analyzed by CFIUS.

That senior White House officials, and the Secretaries and Deputy Secretaries of the Departments of the Treasury and Homeland Security were unaware of the Dubai Ports World transaction, combined with the fact this transaction was not subjected to a formal investigation in violation of the Byrd amendment, compounded congressional concerns about the nature of the underlying transaction.

In response to congressional criticism related to the DPW case in 2006, CFIUS agencies pledged to address flaws in the CFIUS process identified by Congress. There were 113 transactions filed with CFIUS in 2006, up 74 percent from the previous year. Because companies seek CFIUS consideration voluntarily, this increase reflected greater sensitivity among foreign investors, which in turn may reflect a more aggressive stance from CFIUS. CFIUS conducted seven second-stage investigations, the same number of investigations that had been conducted over the previous five-year period. There was also an increase in the number of companies withdrawing from CFIUS reviews and investigations, which suggests a higher degree of scrutiny: either companies withdrew for the purpose of terminating the underlying transaction or in order to restructure the transaction to address CFIUS concerns.

The number of cases in which CFIUS approved transactions with conditions attached through mitigation agreements also increased. CFIUS has also increased its Congressional outreach, notifying the Congressional leadership and committees of jurisdiction upon completion of CFIUS action on each transaction. Treasury also finally produced the long-overdue quadrennial report on CFIUS-related issues as mandated by the Defense Production Act of 1950.

In response to continued concerns regarding implementation of Exon- Florio, on April 30, 2006, the Committee on Banking, Housing, and Urban Affairs reported an original bill, S. 109-264, which made significant amendments to Section 721 to strengthen the review and oversight process. Senate bill 109-264 passed the Senate on July 26, 2006. On the same day the House passed its own reform legislation, H.R. 5337. No further action occurred on the bills prior to the adjournment of the 109th Congress.

On February 28, 2007, The House once again passed legislation amending section 721 to strengthen the foreign investment review process, H.R. 556--The National Foreign Investment Reform and Strengthened Transparency Act of 2007. On May 16, 2007, the Senate Committee on Banking, Housing and Urban Affairs convened to consider and report an original bill--the Foreign Investment and National Security Act of 2007--Proposed by Chairman Christopher J. Dodd, working closely with Ranking Member Richard Shelby and drawing upon the extensive work that members of the committee had undertaken on this subject in the 109th Congress.

Let me offer a brief summary of the most important provisions of the bill.

The Foreign Investment and National Security Act of 2007--

Establishes the membership of the Committee on Foreign Investment in the United States, CFIUS, in statute;

Strengthens the role of the Director of National Intelligence, hereafter DNI, by making the DNI an ex-officio member of CFIUS and requiring that the Director undertake a thorough analysis of the transaction with respect to any national security implications, engage the intelligence community, and report the DNI's findings to the committee within 20 days of the commencement of the CFIUS review. Requires the DNI to update CFIUS with any additional relevant intelligence information that becomes available during the course of a review and/or investigation;

Mandates the designation of a lead agency or agencies for each covered transaction, in addition to the Treasury Department, charged with negotiating any mitigation agreement or other conditions to ensure that national security is protected, and for follow-up compliance with the terms of the agreement after the transaction has been approved by

Mr. Speaker, I move to suspend the rules and concur in the Senate amendment to the bill (H.R. 556) to ensure national security while promoting foreign investment and the creation and maintenance of jobs, to reform the process by which such investments are examined

for any effect they may have on national security, to establish the Committee on Foreign Investment in the United States, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks on this legislation and to insert extraneous material thereon.

Mr. Speaker, I yield as much time as he may consume to the chairman of the committee, Chairman Frank, from the great State of Massachusetts.

Mr. Speaker, I reserve the balance of my time and inquire how much time remains on my side.

Mr. Speaker, I yield myself as much time as I may consume.

Mr. Speaker, I hope that my colleagues who voted for this bill unanimously are as delighted as I am to see H.R. 556, the CFIUS reform bill, once again on this floor, this time headed for the President's desk.

Strengthening the system of review of foreign direct investment in this country is, as this body has recognized repeatedly, an important national and strongly bipartisan interest.

When the Dubai Ports World matter became front page news a year and a half ago, most Americans had no idea that the Committee on Foreign Investments in the United States existed or what it did.

The Dubai Ports World debacle made clear that the CFIUS process needed strengthening and oversight, both to ensure that foreign investment here does not jeopardize our national security in a post-9/ 11 world and to encourage and support safe foreign investment in this country to create jobs and boost our economy. This bill is designed to accomplish both of these important goals.

As my colleagues will remember, one of the first bills passed by the Financial Services Committee in this Congress and brought to the floor was the original version of this legislation. I am delighted to say that the Senate adopted our bill with very few changes, and it is back here for final passage.

This has been a long and consistently bipartisan effort in which several Members played key roles and deserve special recognition.

I would like to especially thank Chairman Frank and the Democratic leadership, Speaker Nancy Pelosi and Majority Leader Steny Hoyer, for their support. They made this bill a priority and quickly moved it forward for passage.

I also thank Minority Whip Roy Blunt for his work, both in this Congress and in the last, in putting together a coalition to build support for CFIUS reform. Congressman Joe Crowley and Congressman Luis Gutierrez played a key role in that coalition, and I thank them.

My former colleague on the Monetary Policy Subcommittee, Congresswoman Pryce of Ohio, worked with me to hold hearings on this bill in the last Congress. Those hearings built on the seminal report from the GAO on the weaknesses in the CFIUS process.

I also thank Congressman Thompson of Mississippi and Congressman King of the Homeland Security Committee, who encouraged this bill from the start.

I would like to thank those Members' staff, particularly Scott Morris, Joe Pinder, Kevin Casey, Peter Freeman, Kyle Nehvins; my subcommittee staff director, Eleni Constantine and Ed Mills for their tireless work on this bill over the past 2 years.

I would also like to thank the Senate for moving forward promptly on this key issue and for adopting our bill and our bill number.

In particular, I thank Chairman Dodd and Senator Shelby for their bipartisan work in moving this forward and their staffs for the careful dedication they gave to every detail of this legislation.

Finally, I would like to the thank Secretary Paulson, Deputy Secretary Kimmitt, Undersecretary Steel and Assistant Secretary Lowery. It is they and their successors who will ensure that the CFIUS process works under Congress's oversight. I have appreciated the dialogue we have had over the past 2 years on how the reforms we propose will be implemented, and in some cases, they already have been.

This bill is necessary now more than ever. As the Wall Street journal reported this week, a growing number of countries are imposing new restrictions on foreign investment that go well beyond the strict focus on national security concerns embodied in this legislation.

The story indicates that the new hostility to foreign acquirers reflects a perception that the United States is erecting new barriers to foreign capital. Today's legislation establishes in unequivocal terms that this perception is false.

By strengthening and clarifying the national security review process and maintaining a strict focus on national security, the CFIUS reforms embodied in H.R. 556 clearly endorse the open investment policy of the United States while enhancing our national security protections. In the name of national security, the President can intervene in any transaction, and, similarly, CFIUS can condition approval of a deal on being able to reopen a review. But this bill provides clarity and certainty for investors by requiring a finding by CFIUS that all other remedies have been exhausted before CFIUS can reopen a review.

I would note that the certain and transparent CFIUS procedures in this bill stand in stark contrast to actions by some foreign governments where expropriations of assets have occurred arbitrarily without justification and without recompense for U.S. investors. By passing this bill, we continue our long-standing efforts to ensure that U.S. investors are treated with the same certainty and fairness in foreign markets as we give foreign investors in this bill.

This bill makes several necessary reforms. First, it creates CFIUS by statute, so that its operations, membership and procedures have a sound basis in law, and we are reviewable by Congress.

Second, it requires a full 45-day investigation of foreign government investment, in addition to the 30-day review, which can only be waived by the Secretary or the Deputy Secretary of Treasury. While many foreign governments' transactions are harmless, they also pose certain inherent risks. Governments have more assets and resources than private sector participants and may have nonmarket motives.

Third, it requires review and sign-off on every transaction, by a high-level official. When the Ports World deal became public, no senior official could be found who knew about the approval before it happened. The House bill required all approvals to be made by the Secretary or Deputy Secretary. The Senate bill allows a Deputy Secretary to make a decision, but it also mandates the creation of a special assistant secretary at Treasury whose portfolio would be CFIUS matters. By restricting the additional decision-making ability to one out of the many assistant secretaries at the Treasury, this preserves the accountability and high-level review that motivated the original delegation provision.

Fourth, the bill requires reporting to Congress after the conclusion of reviews. While we do not want to politicize the process of security review, we also want to assure proper oversight.

Fifth, it creates and places and puts in place the importance of review by the National Intelligence Director.

Six, it requires tracking of transactions that are withdrawn from the process. Since deals are often withdrawn because they hit a snag in the initial course of review, it is necessary to make sure that appropriate steps are taken to prevent whatever potential risk was spotted.

For example, this was the case with a Smartmatic transaction that I brought to the attention of Treasury last summer as a matter requiring CFIUS review. As you may recall, press reports indicated that Smartmatic, which had just bought the second largest voting machine company in the United States, Sequoia Voting Systems, had ties to the Venezuelan government.

I thought those allegations needed to be investigated by the body with the power to really get into the tangled ownership of the company, which is CFIUS. Under the broad and flexible definition of national security that the bill puts in place, certainly the ownership of voting machines is a potential national security issue.

A CFIUS review began of the deal. But before it was completed, Smartmatic withdrew and agreed to sell Sequoia. Certainly, this is an agreement that I would want CFIUS to track and make sure actually was followed.

I think we have struck the right balance in this bill in protecting the national security interests of our country, first and foremost, but also providing a certain and clear procedure to encourage safe foreign investment that will create jobs and boost the economy.

I urge my colleagues to once again give this bill their unequivocal support and send it to the President with a bipartisan vote.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I appreciate the gentleman's hard work on this bill and his statements, but I would like to clarify that CFIUS is a consensus body, so each member does and will continue to have an effective veto. This bill does not affect that ability in any way. Chairman Frank of the committee made that very clear in his statements in committee and on the floor today.

Mr. Speaker, I include in the Record a list of important organizations in our country, including the Chamber of Commerce, that have issued letters and statements in support of this legislation.

July 10, 2007.

To the Members of the U.S. House of Representatives: On

behalf of the Financial Services Forum, a trade association

comprised of the CEOs of 20 of the largest and most

diversified financial institutions, I write in strong support

of H.R. 556, the ``Foreign Investment and National Security

Act of 2007.'' This bipartisan legislation would ensure that

proposed foreign investments in the U.S. meet national

security objectives while preserving an open, fair and non-

discriminatory investment environment.

Passage of this bill indicates to international investors

and trade partners that the U.S. remains open for foreign

investment and signals to other countries that they should

follow suit by keeping their doors open to U.S. foreign

direct investment.

The Forum believes that the legislation strikes the

appropriate balance between keeping Americans safe and

growing the economy. The included reforms make clear that

every Administration will devote time and resources to

foreign investment deals that require higher levels of

scrutiny, while allowing acquisitions that do not present

national security concerns to move forward swiftly.

Foreign direct investment supports employment for over 5

million Americans, who typically earn compensation well above

the national average. Investment from abroad supports 19% of

all U.S. exports. In 2005, a number of foreign-owned

companies reinvested $59 billion in profits back into the

U.S. economy. At a time when the competitiveness of the

United States is so important, H.R. 556 will help maintain

America's global advantage and grow the U.S. economy.

The Forum applauds the bipartisan leaders who worked

swiftly and productively to move this bill. H.R. 556 will

restore Congressional confidence in the CFIUS process and the

Forum urges Members to support this critically important

bipartisan bill.

Sincerely,

Robert S. Nichols,

President and COO,

The Financial Services Forum.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I rise today in strong support, and as a proud co-sponsor of H.R. 556, the bipartisan National Security FIRST Act of 2007. This bill will ensure that never again will the Congress and people of the United States be taken by surprise at the discovery that an administration may have endangered the nation's security by authorizing the acquisition of critical American infrastructure by an entity owned or controlled by foreign government with interests inimical to the United States.

Mr. Speaker, recall how outraged Americans were in January 2006 when we learned of the Bush administration's secret approval of the Dubai Ports World deal. That is when it was disclosed that the secretive Committee on Foreign Investment in the United States (CFIUS) had approved a port deal sought by Dubai Ports World--with only minimal review--despite the deal's national security implications. Dubai Ports World is a company owned by the government of the United Arab Emirates (UAE).

The Dubai port deal would have resulted in the company managing terminal operations at six major U.S. ports, including the Port of Houston in my own congressional district. But that is not all. As the facts began to dribble out, we learned that the CFIUS had not initiated a 45-day national security investigation--despite the fact that UAE had links to 9/11 and notwithstanding the fact the Department of Homeland Security had raised security concerns. It was only in response to the overwhelming disapproval, criticism, and anger of the American people and the Congress that Dubai Ports World announced in early March 2006 that it was divesting itself of these U.S. port operations, effectively killing the deal.

Mr. Speaker, although this was a happy outcome it did not obscure the material fact that the CFIUS process was fundamentally flawed. This is because despite the national security implications, the Bush administration lawfully had approved the Dubai Ports World deal with only minimal review--and with no notification to the Congress.

It is also clear from the record that the Bush administration only gave the Dubai port deal a cursory look before approving it. The secretive CFIUS approved the plan with little review, in only 30 days, and without the 45-day national security investigation that should have been conducted. Further, the CFIUS approval was made by mid-level officials. The senior-level decisionmakers in the administration-- including the Secretary of the Treasury, the Secretary of Homeland Security, and the President of the United States--were not involved in the decisionmaking process and learned of it only from media reports. In addition, no Member of Congress was informed of the secretive approval by CFIUS of the port deal--with Members also learning about the deal in press reports.

Mr. Speaker, as a senior member of the Committee on Homeland Security, I participated in hearings that uncovered the weaknesses in the CFIUS regulatory framework and cosponsored bipartisan legislation in the 109th Congress that would have corrected these deficiencies. That bill, H.R. 5337, passed the House 424-0 but the Republican congressional leadership in the last Congress could not get together with the Senate to produce and present to the President a bill he would sign.

We rectify that failure today. H.R. 556 strengthens national security by reforming the interagency Committee on Foreign Investment in the United States (CFIUS) process by which the Federal Government reviews foreign investments in the United States for their national security implications.

The bill requires CFIUS to conduct a 30-day review of any national security-related business transaction. After a 30-day review is conducted, CFIUS would be required to conduct a full-scale, 45-day investigation of the effects the business transaction would have on national security if the committee review determines that the transaction threatens to impair national security and these threats have not been mitigated during the 30-day review. The statutory 45-day review is also triggered if the committee review determines that the transaction involves a foreign government-controlled entity and the CFIUS chairman and

vice chairman are unable to certify it poses no threat to the national security. Finally, the 45-day review is required if the Director of National Intelligence (DNI) identifies intelligence concerns with the transaction that he concludes could threaten national security, and these threats have not been mitigated during the 30-day review. The bill also contains numerous other provisions to strengthen the CFIUS review process.

Mr. Speaker, I support H.R. 556 for four important reasons. First, it subjects transactions involving foreign governments to a stricter level of scrutiny. Second, the bill provides for senior-level accountability for CFIUS decisions. Third, the bill improves CFIUS accountability to Congress. Finally, H.R. 556 strengthens the CFIUS review process by establishing a formal role for intelligence assessments for every transaction. I will briefly discuss each of these important procedural improvements.

Mr. Speaker, as I indicated earlier, the Dubai Ports World deal was approved by mid-level officials and without a 45-day national security investigation of the transaction, even though Dubai Ports World was owned by a foreign government. H.R. 556 strengthens current law by requiring in cases involving a company that is controlled by a foreign government, a non-delegable certification by either (1) the chairman of CFIUS (the Secretary of the Treasury) or the vice-chairman of CFIUS (the Secretary of Homeland Security) that the transaction poses no national security threat. In the absence of this non-delegable certification, a second-stage 45-day national security investigation of the transaction must take place.

Next, H.R. 556 ensures senior level accountability for CFIUS decisions by requiring the chairman and vice chairman of CFIUS to approve all transactions where CFIUS consideration is completed within the 30-day review period (limiting delegation of approval authority to the Under Secretary level); and requires that the President approve all transactions that have also been subjected to the second-stage 45-day national security investigation.

H.R. 556 improves CFIUS accountability to Congress. As was noted above, Members of Congress were not notified of the CFIUS approval of the Dubai Ports World deal. This bill rectifies this failure by requiring CFIUS to report to the congressional committees of jurisdiction within 5 days after the final action on a CFIUS investigation, and permits the committees to request one detailed classified briefing on the transaction. The bill also requires CFIUS to file semi-annual reports to Congress that contain information on transactions handled by the committee during the previous 6 months.

Last, H.R. 556 strengthens the CFIUS review process by establishing a formal role for intelligence assessments for every transaction. The bill requires that every transaction be subjected to an assessment by the Director of National Intelligence (DNI) and contains provisions to ensure that the DNI has adequate time to conduct the required assessment.

All in all, Mr. Speaker, H.R. 556 represents an important contribution to our effort to secure the homeland. Last November, the American people voted for change, they voted for competence, they voted for a new direction for our country. I am proud to say that with H.R. 556, the new majority has once again delivered on its promise to chart a new direction to make America safer and more secure.

I urge all Members to join me in supporting H.R. 556.

Mr. Speaker, I stand here today as Chairman of the

Committee on Homeland Security in support of H.R. 556, the Foreign Investment and National Security Act of 2007. This bill provides necessary reform by formalizing and streamlining the structure and duties of the Committee on Foreign Investment in the United States, CFIUS. This reform combines an understanding of the need for ensuring that foreign investment in the U.S. is in the security interests of the American public with an appreciation for global commerce in the 21st century. Indeed, this bill addresses many of the concerns raised about CFIUS over the past year, especially with regard to its current lack of transparency and oversight. This bill rectifies these concerns by formally establishing CFIUS and its membership, while also streamlining how and when CFIUS review will be conducted. This bill sends an important message to the country and the world: The United States will continue to encourage the international flow of commerce in a manner that demands the security of our country.

Mr. Speaker, the bill formalizes the CFIUS membership and requires the following to serve: (1) Secretaries of Treasury, Homeland Security, Commerce, Defense, State, and Energy; (2) Attorney General; Director of National Intelligence (ex officio); and Secretary of Labor (ex officio); and (3) The heads of any other executive department, agency, or office, as the President determines appropriate, generally on a case-by-case basis.

Under this bill, CFIUS will conduct a review of any transaction by or with any foreign person which could result in the foreign control of any person engaged in interstate commerce in the U.S. to determine the effects of the transaction on the national security of the U.S. CFIUS will determine whether to conduct an investigation of the effects of the transaction on the national security of the U.S. if the initial review of the transaction results in the determination that: The transaction threatens to impair the national security of the U.S. and that the threat has not been mitigated during or prior to the review of the transaction; the transaction is a foreign government-controlled transaction; the transaction would result in control of any critical infrastructure of or within the U.S. by or on behalf of any foreign person, if CFIUS determines that the transaction could impair national security, and that such impairment to national security has not been mitigated by assurances provided to CFIUS; or The lead agency recommends, and CFIUS concurs, that an investigation be undertaken.

Mr. Speaker, I believe that our colleagues in the Senate made remarkable contributions to this bill. For example, I think that its determination to eliminate the option for CFIUS to conduct a second 45- day review at the end of the investigation stage was a wise one. As a result of this change, CFIUS will be required to be efficient and will demonstrate our country's recognition of the importance of not hampering foreign investment that avoids hindering our national security. The Congressional Research Service's independent report, for instance, found that, for all the merger and acquisition activity in 2005, 13 percent of it was from foreign firms acquiring U.S. firms. This is up from 9 percent nearly 10 years before. This statistic shows that foreign investment in the U.S. is vital to our economy.

I must mention, however, my concern with one of the changes to the bill, as passed by my colleagues in the Senate, which eliminates an important role of the Secretary of Homeland Security. Both bills establish the Secretary of the Treasury as the Chairperson of CFIUS. Whereas the original House-passed bill required that the Secretaries of Homeland Security and Commerce be Vice Chairpersons of CFIUS, the current bill eliminates the Vice Chairpersons and, instead, calls for the Secretary of the Treasury to designate, as appropriate, a member or members of CFIUS to be the ``lead agency or agencies'' on behalf of CFIUS for each covered transaction, and for negotiating any mitigation agreements or other conditions necessary to protect national security. In addition, the lead agency or agencies will work on all matters related to the monitoring of the completed transaction. The ``lead agency'' role is particularly important because if the Secretary of the Treasury and the head of the lead agency jointly determine that a transaction will not impair the national security of the U.S. in certain cases, then an investigation will not be required.

The Department of Homeland Security has played a vital role with regard to CFIUS cases in the past and has an unparalleled institutional understanding of such cases. In its involvement with such cases, it represents the need to protect our homeland from attack and to ensure that our critical infrastructure is protected and available to the American public during, and in the aftermath of, an attack. In 2006, the Department was involved in each of the 113 CFIUS filings and, in 15 instances, the Department requested mitigation agreements. Thus far in 2007, the Department has been involved in each of the 80 filings and has requested five mitigation agreements. Furthermore, a large number of these filings regard the ownership of critical infrastructure, which is a major initiative of the Department. The Department's past involvement with CFIUS and its mission to protect our country only underscores its need to be second to none when CFIUS reviews cases. That the Department no longer has a clearly articulated leadership role in this process negates its understanding of such matters and undercuts a developing expertise of this new Department. Once this bill is enacted into law, I hope that the Secretary of the Treasury will appoint the Department of Homeland Security as one of the lead agencies in all CFIUS cases, unless there is an explicit reason to do otherwise. The need to protect our homeland is too vital--and the Department's role therein too intrinsic--for it to be left without a leadership position in all CFIUS filings.

This bill, nevertheless, brings the necessary reform to the CFIUS process. Incidents such as Dubai Ports World and China National Offshore Oil Corporation's attempted bid for control of an oil company, Unocal, raised an increased awareness regarding transactions that should receive CFIUS review. Importantly, though, this bill does not represent an isolationist reaction to these incidents but, instead, balances the need for continued foreign investment in the U.S. with the need to review that investment's impact on national security and our critical infrastructure.

Only through this legislation will CFIUS have a formal budget, membership, and a clear mission--protecting American security while maintaining a free and growing economy.

In closing, let me thank my colleagues on the Financial Services Committee for their leadership on this legislation, especially my Democratic colleagues Chairman Frank as well as Representative Carolyn Maloney and Representative Joseph Crowley of New York. I would also like to thank my colleagues in the Senate.

I encourage my colleagues to pass this legislation with strong bipartisan support.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I want to thank the gentlewoman from New York for the time and also for her leadership on this issue. I rise today in strong support of H.R. 556, and I want to thank Chairman Frank for building on our work in the last Congress, bringing this bill up when I was a proud sponsor, original sponsor, with Mrs. Maloney and Mr. Blunt and Mr. Crowley of similar legislation that we passed in this House last Congress, and I am proud to be an original sponsor of this legislation. This has been a bipartisan effort and model for the way Congress should operate all of time.

Mr. Speaker, as we now know and very few knew 18 months ago, CFIUS is charged with assessing the safety and security ramifications of direct foreign investment in the United States of America. The bill before us reforms CFIUS to strike the right balance between ensuring national security and open investment. 9/11 taught us that the number one priority of this government is to do all they can do to assure our citizens' security in their homeland.

Now, Dubai Ports World has left the front page and most people's minds, but it's not forgotten. Congress heard and responded to the immediate concerns voiced by Americans that we could not sell security at our ports at any price. Today, we pass a bill that returns accountability to a broken process, while ensuring job growth and investment in our economy are not collateral damage.

Importantly, the bill we are considering maintains that of the House bill that we introduced last March: increasing administration accountability for the scrutiny of foreign investment transaction; increasing congressional opportunities for oversight of that process; increasing predictability for businesses negotiating the CFIUS process; formalizing the Department of Homeland Security's role in CFIUS; and creating a formal role for the Director of National Intelligence in analyzing each proposed transaction.

Specifically, Mr. Speaker, the bill before us requires that the Treasury Department and each agency directly involved in scrutinizing a transaction sign a certification that goes directly to the Congress. There's strong emphasis on analysis of every transaction by the Director of National Intelligence, and time is given for all members of the CFIUS committee to digest the analysis before making a decision on a transaction. National security is put first in this process. Nothing stands before it.

It should be noted that the administration has radically overhauled the CFIUS process in the last 18 months

since the fiasco. This legislation is needed so there is no backsliding and no further letting down of our guard.

And finally, Mr. Speaker, let me say we cannot wait any longer to enact this legislation. We must send a clear signal to our trading partners. There were concerns that some of the press reports on the reform process gave other Nations the impression that we were going to enact protectionist legislation instead of a bill that continued to welcome foreign investment, which also means domestic job growth.

Trade does not take place in a vacuum. What we do here in the United States affects the environment available to U.S. companies expanding their global reach and the expansion of jobs here at home. Honda Motor Corporation alone has made a $6.3 billion investment in my home State of Ohio, employing over 8,500 people.

I mention this simply to say that we can't get to a point where foreign direct investment is a dirty phrase. The United States remains the world's largest recipient of direct foreign investment but by a decreasing margin. China, which was just a blip on the screen 20 years ago, is now a major competitor for foreign investment dollars. In June, the Commerce Department reported that foreign direct investment into U.S. businesses rose 77 percent in 2006, compared with a year earlier, but remained less than half their peak level in 2000.

If the United States is going to attract the ideas, the people, the capital and companies that will drive economic growth in the 21st century, we need a CFIUS process that protects national security but also keeps America an attractive and accessible place to do business and invest.

I want to thank the many members, the chairman and ranking member especially, who invested so much time and effort to get this process right.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 4 minutes to my colleague and good friend from the State of California, the ranking member on the Armed Services Committee, Mr. Hunter.

Mr. Speaker, we have no other requests for time. Let me close by addressing the concerns of my colleague that were just raised. The reforms in many areas of this bill far outweigh the compromise of the committee machinations that were made over in the Senate.

Believe me, it is no small point, and it is one not lost on me. Our product, I believe, is far superior. The Senate's, as the gentleman points out, is weaker than ours.

But I believe that the colloquy between Chairman Frank and Chairman Skelton will help us resolve that. Chairman Frank says it is the intent of this Congress that there is a consensus on the CFIUS, and he agreed to work with Chairman Skelton and the Defense Authorization Act to correct this.

But taken as a whole, this bill is far superior than current law. It must be enacted, and the sooner the better. Let me reiterate, the rest of the world is watching us here today.

We are passing a balanced bill that does not forget the importance of FDI to our economy, but it protects our ports and our homeland to the extent that this Congress is able to do it.

I believe that we must act quickly. We have been stymied for a year now. We can't afford to send the wrong message. It means that American jobs will be lost, and we will be no safer for prolonging this process. This bill protects our economy, but also the ultimate protection is to our homeland. I urge passage of this bipartisan bill.

Mr. Speaker, I yield back the balance of my time.