II 

109TH CONGRESS 

2D SESSION S. 2400 

To transfer authority to review certain mergers, acquisitions, and takeovers 

of United States entities by foreign entities to a designee established 

within the Department of Homeland Security, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 13, 2006 

Ms. COLLINS (for herself, Mr. LIEBERMAN, Mr. COLEMAN, Mr. AKAKA, Mr. 

TALENT, and Mr. GRAHAM) introduced the following bill; which was read 

twice and referred to the Committee on Banking, Housing, and Urban 

Affairs 

A BILL 

To transfer authority to review certain mergers, acquisitions, 

and takeovers of United States entities by foreign entities 

to a designee established within the Department of 

Homeland Security, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. TRANSFER OF AUTHORITY TO REVIEW CER2 TAIN MERGERS, ACQUISITIONS, AND TAKE3 OVERS. 

4 (a) REPEAL OF DEFENSE PRODUCTION ACT PROVI5 SION.—Section 721 of the Defense Production Act of 

6 1950 (50 U.S.C. App. 2170) is repealed. 

7 (b) TRANSFER TO HOMELAND SECURITY.—Title II 

8 of the Homeland Security Act of 2002 (6U.S.C. 121 et 

9 seq.) is amended by adding at the end the following: 

10 Subtitle E—Review of Mergers, Ac11 quisitions, and Takeovers by 

12 Foreign Entities 

13 ‘‘SEC. 241. AUTHORITY TO REVIEW CERTAIN MERGERS, AC14 QUISITIONS, AND TAKEOVERS. 

15 ‘‘(a) REVIEW AND INVESTIGATION.— 

16 ‘‘(1) IN GENERAL.—The President or the Presi17 dent’s designee may undertake an investigation to 

18 determine the effects on national security or home19 land security of mergers, acquisitions, and takeovers 

20 proposed or pending on or after the date of enact21 ment of this section by or with foreign persons 

22 which could result in foreign control of persons en23 gaged in interstate commerce in the United States. 

24 ‘‘(2) REVIEW.—For purposes of determining 

25 whether to undertake an investigation under this 


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1 subsection, the President or the President’s designee 

2 shall conduct a review of the proposed or pending 

3 merger, acquisition, or takeover, which review shall 

4 be completed not later than 30 days after the date 

5 of receipt by the President or the President’s des6 ignee of written notification of the proposed or pend7 ing merger, acquisition, or takeover. 

8 ‘‘(3) TIMING.—If it is determined that an in9 vestigation should be undertaken under this sub10 section, such investigation— 

11 ‘‘(A) shall commence at such time as the 

12 determination is made under paragraph (2), 

13 and not later than 30 days after the date of re14 ceipt by the President or the President’s des15 ignee of written notification of the proposed or 

16 pending merger, acquisition, or takeover, as 

17 prescribed by regulations promulgated pursuant 

18 to this section; and 

19 ‘‘(B) shall be completed not later than 45 

20 days after the date of its commencement. 

21 ‘‘(4) INTELLIGENCE ASSESSMENT REPORTS.— 

22 With respect to any investigation undertaken under 

23 this subsection, the Director of National Intelligence 

24 shall create a report that consolidates the intel25 ligence findings, assessments, and concerns of each 


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1 of the relevant members of the intelligence commu2 nity. Such report shall be considered as part of the 

3 investigation, provided to all members of the Com4 mittee, and included as part of any recommendation 

5 to the President. 

6 ‘‘(b) MANDATORY INVESTIGATIONS.— 

7 ‘‘(1) IN GENERAL.—The President or the Presi8 dent’s designee shall undertake an investigation, as 

9 described in subsection (a)(1), in any instance in 

10 which an entity controlled by or acting on behalf of 

11 a foreign government seeks to engage in any merger, 

12 acquisition, or takeover which would result in control 

13 of a person engaged in interstate commerce in the 

14 United States. 

15 ‘‘(2) TIMING.—An investigation undertaken 

16 under this subsection— 

17 ‘‘(A) shall commence not later than 30 

18 days after the date of receipt by the President 

19 or the President’s designee of written notifica20 tion of the proposed or pending merger, acquisi21 tion, or takeover, as prescribed by regulations 

22 promulgated pursuant to this section; and 

23 ‘‘(B) shall be completed not later than 45 

24 days after the date of its commencement. 

25 ‘‘(c) COMMITTEE FOR SECURE COMMERCE.— 


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1 ‘‘(1) ESTABLISHMENT.—There is established 

2 the Committee for Secure Commerce, which shall 

3 serve as the President’s designee for purposes of this 

4 section. 

5 ‘‘(2) CHAIRPERSON.—The Secretary, or the 

6 designee thereof, shall serve as the chairperson of 

7 the Committee. 

8 ‘‘(3) VICE CHAIRS.—The Secretary of Defense, 

9 or the designee thereof, and the Secretary of the 

10 Treasury, or the designee thereof, shall serve as vice 

11 chairs of the Committee. 

12 ‘‘(4) MEMBERSHIP.—The standing members of 

13 the Committee shall— 

14 ‘‘(A) be made up of the heads of those ex15 ecutive departments, agencies, and offices as 

16 the President determines appropriate; and 

17 ‘‘(B) include the Director of National In18 telligence. 

19 ‘‘(5) ASSISTANCE FROM OTHER FEDERAL

20 SOURCES.—The chairperson of the Committee may 

21 seek information and assistance from any other de22 partment, agency, or office of the Federal Govern23 ment, and such department, agency, or office shall 

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1 person determines necessary or appropriate to carry 

2 out the duties of the Committee under this section. 

3 ‘‘(6) REVIEW PROCESS; DOCUMENTATION.— 

4 ‘‘(A) COMMITTEE REVIEW PROCESS.—The 

5 chairperson of the Committee shall establish 

6 written processes and procedures to be used by 

7 the Committee in conducting reviews and inves8 tigations under this section in any case in which 

9 the Committee is acting as the President’s des10 ignee, including a description of the role and re11 sponsibilities of each of the member depart12 ments, agencies, and offices in the investigation 

13 of foreign investment in the United States. 

14 ‘‘(B) DEPARTMENTAL REVIEW PROCESS.— 

15 The head of each department, agency, or office 

16 that serves as a member of the Committee shall 

17 establish written internal processes and proce18 dures to be used by the department, agency, or 

19 office in conducting reviews and investigations 

20 under this section, and shall provide such writ21 ten procedures to the Committee. 

22 ‘‘(7) INDEPENDENT AGENCY REVIEWS RE23 QUIRED.—In any case in which the Committee is 

24 acting as the President’s designee under this section, 

25 each member of the Committee shall conduct, within 


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1 the department, agency, or office of that member, an 

2 independent review of each proposed merger, acqui3 sition, or takeover described in subsection (a) or (b), 

4 and shall timely provide to the Committee written 

5 findings relating to each such review. 

6 ‘‘(8) DETERMINATIONS NOT TO CONDUCT AN

7 INVESTIGATION.—A determination by the Committee 

8 not to conduct an investigation under subsection (a) 

9 shall be made only after a review required by sub10 section (a)(2), and shall be unanimous. 

11 ‘‘(d) ACTION BY THE PRESIDENT.— 

12 ‘‘(1) IN GENERAL.—Subject to subsection (e), 

13 the President may take such action for such time as 

14 the President considers appropriate to suspend or 

15 prohibit any acquisition, merger, or takeover of a 

16 person engaged in interstate commerce in the United 

17 States proposed or pending on or after the date of 

18 enactment of this section, by or with a foreign per19 son so that such control will not threaten to impair 

20 the national security or homeland security. 

21 ‘‘(2) ANNOUNCEMENT BY THE PRESIDENT.— 

22 The President shall announce the decision to take 

23 action pursuant to this subsection not later than 15 

24 days after the investigation described in subsection 

25 (a) is completed. The President may direct the AtVerDate Aug 31 2005 00:05 Mar 14, 2006 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2400.IS S2400

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1 torney General to seek appropriate relief, including 

2 divestment relief, in the district courts of the United 

3 States in order to implement and enforce this sec4 tion. 

5 ‘‘(e) FINDINGS OF THE PRESIDENT.—The President 

6 may exercise the authority conferred by subsection (d) 

7 only if the President finds that— 

8 ‘‘(1) there is credible evidence that leads the 

9 President to believe that the foreign interest exer10 cising control might take action that threatens to 

11 impair the national security or homeland security; 

12 and 

13 ‘‘(2) provisions of law, other than this section 

14 and the International Emergency Economic Powers 

15 Act, do not, in the judgment of the President, pro16 vide adequate and appropriate authority for the 

17 President to protect the national security or home18 land security in the matter before the President. 

19 ‘‘(f) ACTIONS AND FINDINGS NONREVIEWABLE.— 

20 The actions of the President under subsection (d) and the 

21 findings of the President under subsection (e) shall not 

22 be subject to judicial review. 

23 ‘‘(g) FACTORS TO BE CONSIDERED.—For purposes 

24 of this section, the President or the President’s designee 

25 shall, taking into account the requirements of national seVerDate Aug 31 2005 00:05 Mar 14, 2006 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2400.IS S2400

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1 curity and homeland security, consider among other fac2 tors— 

3 ‘‘(1) critical infrastructure, the control of which 

4 is important to homeland security; 

5 ‘‘(2) domestic production needed for projected 

6 national defense and homeland security require7 ments; 

8 ‘‘(3) the capability and capacity of domestic in9 dustries to meet national defense requirements, in10 cluding the availability of human resources, prod11 ucts, technology, materials, and other supplies and 

12 services; 

13 ‘‘(4) the control of domestic industries and 

14 commercial activity by foreign citizens as it affects 

15 the capability and capacity of the United States to 

16 meet the requirements of national security or home17 land security; 

18 ‘‘(5) the potential effects of the proposed or 

19 pending transaction on sales of military goods, 

20 equipment, or technology to any country— 

21 ‘‘(A) identified by the Secretary of State— 

22 ‘‘(i) under section 6(j) of the Export 

23 Administration Act of 1979, as a country 

24 that supports terrorism; 


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1 ‘‘(ii) under section 6(l) of the Export 

2 Administration Act of 1979, as a country 

3 of concern regarding missile proliferation; 

4 or 

5 ‘‘(iii) under section 6(m) of the Ex6 port Administration Act of 1979, as a 

7 country of concern regarding the prolifera8 tion of chemical and biological weapons; or 

9 ‘‘(B) listed under section 309(c) of the Nu10 clear Non-Proliferation Act of 1978, on the 

11 ‘Nuclear Non-Proliferation-Special Country 

12 List’ (15 C.F.R. Part 778, Supplement No. 4) 

13 or any successor list; and 

14 ‘‘(6) the potential effects of the proposed or 

15 pending transaction on United States international 

16 technological leadership in areas affecting United 

17 States national security or homeland security. 

18 ‘‘(h) CONFIDENTIALITY OF INFORMATION.—Any in19 formation or documentary material filed with the Presi20 dent or the President’s designee pursuant to this section 

21 shall be exempt from disclosure under section 552 of title 

22 5, United States Code, and no such information or docu23 mentary material may be made public, except as may be 

24 relevant to any administrative or judicial action or pro25 ceeding. Nothing in this subsection shall be construed to 


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1 prevent disclosure to either House of Congress or to any 

2 duly authorized committee or subcommittee of Congress. 

3 ‘‘(i) REPORTS TO CONGRESS.— 

4 ‘‘(1) REPORTS ON INVESTIGATION.—The Presi5 dent, or the President’s designee, shall immediately 

6 upon completion of an investigation under subsection 

7 (a) or (b) transmit to the members of Congress 

8 specified in paragraph (3) a written report of the re9 sults of the investigation, before any determination 

10 by the President on whether or not to take action 

11 under subsection (d), including a detailed expla12 nation of the findings made under subsection (e), de13 tails of any legally binding assurances provided by 

14 the foreign entity that were negotiated as a condi15 tion for approval, and the factors considered under 

16 subsection (g). Such report shall be prepared in a 

17 manner that is consistent with the requirements of 

18 subsection (h). 

19 ‘‘(2) QUARTERLY SUBMISSIONS.—The Presi20 dent, or the President’s designee, shall transmit to 

21 the members of the Congress specified in paragraph 

22 (3) on a quarterly basis, a detailed summary and 

23 analysis of each merger, acquisition, or takeover that 

24 is being reviewed, was reviewed during the preceding 

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1 ing quarter by the President or the Committee 

2 under subsection (a) or (b). Each such summary and 

3 analysis shall be submitted in unclassified form, with 

4 classified annexes, as the Secretary determines are 

5 required to protect company proprietary information 

6 and other sensitive information. Each such summary 

7 and analysis shall include an appendix detailing dis8 senting views. 

9 ‘‘(3) MEMBERS OF CONGRESS.—The reports re10 quired by this subsection shall be transmitted to— 

11 ‘‘(A) the Majority Leader and the Minority 

12 Leader of the Senate; 

13 ‘‘(B) the chairs and ranking members of 

14 the Committee on Homeland Security and Gov15 ernment Affairs, the Committee on Armed 

16 Services, and the Committee on Banking, Hous17 ing, and Urban Affairs of the Senate; 

18 ‘‘(C) the Speaker and the Minority Leader 

19 of the House of Representatives; and 

20 ‘‘(D) the chairs and ranking members of 

21 the Committee on Homeland Security, the Com22 mittee on Armed Services, and the Committee 

23 on Financial Services of the House of Rep24 resentatives. 


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1 ‘‘(j) REGULATIONS.—The Secretary shall issue regu2 lations to carry out this section. Such regulations shall, 

3 to the extent possible, minimize paperwork burdens and 

4 shall to the extent possible coordinate reporting require5 ments under this section with reporting requirements 

6 under any other provision of Federal law. 

7 ‘‘(k) EFFECT ON OTHER LAW.—Nothing in this sec8 tion shall be construed to alter or affect any existing 

9 power, process, regulation, investigation, enforcement 

10 measure, or review provided by any other provision of law. 

11 ‘‘(l) TECHNOLOGY RISK ASSESSMENTS.—In any case 

12 in which an assessment of the risk of diversion of a critical 

13 technology is performed by a person designated by the 

14 President for such purpose, a copy of such assessment 

15 shall be provided to each member of the Committee for 

16 purposes of reviewing or investigating a merger, acquisi17 tion, or takeover under this section. 

18 ‘‘(m) QUADRENNIAL REPORT.— 

19 ‘‘(1) IN GENERAL.—In order to assist the Con20 gress in its oversight responsibilities with respect to 

21 this section, the President and such agencies as the 

22 President shall designate shall complete and furnish 

23 to the Congress, not later than 1 year after the date 

24 of enactment of this section and every 4 years there25 after, a report which— 


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1 ‘‘(A) evaluates whether there is credible 

2 evidence of a coordinated strategy by 1 or more 

3 countries or companies to acquire critical infra4 structure within the United States or United 

5 States companies involved in research, develop6 ment, or production of critical technologies for 

7 which the United States is a leading producer; 

8 and 

9 ‘‘(B) evaluates whether there are industrial 

10 espionage activities directed or directly assisted 

11 by foreign governments against private United 

12 States companies aimed at obtaining commer13 cial secrets related to critical technologies or 

14 critical infrastructure. 

15 ‘‘(2) RELEASE OF UNCLASSIFIED STUDY.—The 

16 report required by this subsection may be classified. 

17 An unclassified version of the report shall be made 

18 available to the public. 

19 ‘‘(n) EXEMPTION.—Notwithstanding any other provi20 sion of law, the provisions of section 872 do not apply to 

21 the Committee or with respect to any provision of this sub22 title. 

23 ‘‘(o) DEFINITIONS.—As used in this section— 

24 ‘‘(1) the term ‘critical technologies’ means tech25 nologies identified under title VI of the National 


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1 Science and Technology Policy, Organization, and 

2 Priorities Act of 1976, or other critical technology, 

3 critical components, or critical technology items es4 sential to national defense identified pursuant to this 

5 section; 

6 ‘‘(2) the term ‘Committee’ means the Com7 mittee for Secure Commerce, established under sub8 section (c); 

9 ‘‘(3) the term ‘foreign person’ means any for10 eign organization or any individual resident in a for11 eign country or any organization or individual owned 

12 or controlled by such an organization or individual; 

13 and 

14 ‘‘(4) the term ‘intelligence community’ has the 

15 same meaning as in section 3 of the National Secu16 rity Act of 1947 (50 U.S.C. 401a).’’. 

Æ 


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