II 

Calendar No. 474 

109TH CONGRESS 

2D SESSION S. 3549 

[Report No. 109–264] 

To amend the Defense Production Act of 1950, to strengthen Government 

review and oversight of foreign investment in the United States, to 

provide for enhanced Congressional oversight with respect thereto, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 21, 2006 

Mr. SHELBY, from the Committee on Banking, Housing, and Urban Affairs, 

reported the following original bill; which was read twice and placed on 

the calendar 

A BILL 

To amend the Defense Production Act of 1950, to strengthen 

Government review and oversight of foreign investment 

in the United States, to provide for enhanced Congressional oversight with respect thereto, 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. SHORT TITLE. 

2 This Act may be cited as the ‘‘Foreign Investment 

3 and National Security Act of 2006’’. 

4 SEC. 2. AMENDMENTS TO THE DEFENSE PRODUCTION ACT 

5 OF 1950. 

6 Section 721 of the Defense Production Act of 1950 

7 (50 U.S.C. App. 2170) is amended to read as follows: 

8 ‘‘SEC. 721. REVIEW AND INVESTIGATION OF TRANSACTIONS 

9 INVOLVING FOREIGN PERSONS AND GOVERN10 MENTS. 

11 ‘‘(a) REVIEW OF TRANSACTIONS INVOLVING FOR12 EIGN PERSONS AND GOVERNMENTS.— 

13 ‘‘(1) REVIEWS REQUIRED.— 

14 ‘‘(A) IN GENERAL.—CFIUS shall review 

15 any transaction proposed or pending on or after 

16 the date of enactment of this section by, with, 

17 or on behalf of a foreign person or foreign gov18 ernment which could result in foreign control of 

19 a person engaged in interstate commerce in the 

20 United States, for which a review is requested, 

21 in the manner prescribed by regulations pro22 mulgated under this section. 

23 ‘‘(B) PURPOSES.—The purpose of such re24 view shall be to determine the effect on national 

25 security of such transaction, whether an inves-
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1 tigation of such transaction is required under 

2 subsection (b), or both. 

3 ‘‘(2) TIMING OF REVIEWS.— 

4 ‘‘(A) IN GENERAL.—A review of a pro5 posed or pending transaction described in para6 graph (1) shall be completed not later than 30 

7 days after the date of receipt by CFIUS of 

8 written notification of the proposed or pending 

9 transaction, as prescribed by regulations pro10 mulgated under this section. 

11 ‘‘(B) EXTENSIONS UPON REQUEST.—Upon 

12 written request by the Secretary, Deputy Sec13 retary, or Under Secretary, or the equivalent 

14 thereof, of one or more of the agencies that 

15 make up CFIUS (including any agency de16 scribed in subsection (c)(4)(I)) for additional 

17 time to review a case, the 30-day period de18 scribed in subparagraph (A) shall be extended 

19 by not longer than an additional 30 days, if the 

20 Secretary, Deputy Secretary, or Under Sec21 retary, or the equivalent thereof, concludes that 

22 there is credible evidence to believe that if per23 mitted to proceed with the transaction, the for24 eign acquiring entity may take action that 

25 threatens to impair the national security. 
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1 ‘‘(b) INVESTIGATIONS OF CERTAIN TRANS2 ACTIONS.— 

3 ‘‘(1) IN GENERAL.—CFIUS shall undertake an 

4 investigation to determine the effects on national se5 curity of any transaction described in subsection 

6 (a)(1) proposed or pending on or after the date of 

7 enactment of this section— 

8 ‘‘(A) which would— 

9 ‘‘(i) result in control of any person en10 gaged in interstate commerce in the United 

11 States by a foreign government, or a per12 son acting by, with, or on behalf of a for13 eign government; or 

14 ‘‘(ii) result in control of any critical 

15 infrastructure of or within the United 

16 States by, with, or on behalf of any foreign 

17 person, if CFIUS determines that any pos18 sible impairment to national security has 

19 not been mitigated by additional assur20 ances, as described in subsection (i), dur21 ing the review period under subsection (a); 

22 and 

23 ‘‘(B) if the review by CFIUS under sub24 section (a) produces sufficient information to 

25 indicate the possibility of an impairment to na-
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1 tional security, after consideration of the fac2 tors listed in subsection (g). 

3 ‘‘(2) TIMING OF INVESTIGATIONS.—An inves4 tigation required to be undertaken under this sub5 section— 

6 ‘‘(A) shall commence at such time as 

7 CFIUS determines under subsection (a) that 

8 such investigation is required, as prescribed by 

9 regulations promulgated pursuant to this sec10 tion; and 

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

12 days after the date of its commencement. 

13 ‘‘(3) RESUBMITTED FILINGS.—An investigation 

14 of a transaction under this subsection which is inter15 rupted because the notification or filing is withdrawn 

16 by the applicant, and which is subsequently resub17 mitted, shall require up to a 45-day investigation 

18 from the date on which CFIUS receives the new 

19 submission. The investigation shall include a review 

20 of the rationale for the withdrawal and resubmission 

21 of the proposed transaction to CFIUS. 

22 ‘‘(4) COMPLETION OF INVESTIGATIONS RE23 QUIRED.—An investigation of a transaction under 

24 this subsection shall be completed, even if the notifi25 cation or filing of the pending transaction is with-
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1 drawn or rescinded, and CFIUS shall continue to 

2 monitor such withdrawn or rescinded transaction, 

3 except that no completed investigation or continued 

4 monitoring shall be required for any pending trans5 action that is terminated by agreement of the parties 

6 to the transaction. 

7 ‘‘(5) MANDATORY NOTIFICATION RELATED TO

8 CERTAIN TRANSACTIONS AFFECTING NATIONAL SE9 CURITY.— 

10 ‘‘(A) CHAIRPERSON AND VICE CHAIR11 PERSON.—The chairperson and vice chairperson 

12 of CFIUS shall jointly agree to issue rules that 

13 require each person controlled by or acting on 

14 behalf of a foreign government to notify the 

15 chairperson of CFIUS in writing of any pro16 posed transaction involving such person of 

17 United States critical infrastructure relating to 

18 United States national security. 

19 ‘‘(B) REGULATIONS.—The Secretary of the 

20 Treasury shall promulgate regulations for the 

21 implementation of this paragraph, including the 

22 imposition of appropriate penalties for failure to 

23 comply with this paragraph. 

24 ‘‘(c) COMMITTEE ON FOREIGN INVESTMENT IN THE

25 UNITED STATES.— 
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1 ‘‘(1) ESTABLISHMENT.—There is established 

2 the Committee on Foreign Investment in the United 

3 States, which shall serve as the President’s designee 

4 for all purposes under this section. 

5 ‘‘(2) CHAIRPERSON.—The Secretary of the 

6 Treasury shall serve as the chairperson of CFIUS. 

7 ‘‘(3) VICE CHAIRPERSON.—The Secretary of 

8 Defense shall serve as the vice chairperson of 

9 CFIUS. 

10 ‘‘(4) MEMBERSHIP.—The members of CFIUS 

11 shall include— 

12 ‘‘(A) the Secretary of the Treasury; 

13 ‘‘(B) the Secretary of State; 

14 ‘‘(C) the Secretary of Defense; 

15 ‘‘(D) the Secretary of Commerce; 

16 ‘‘(E) the Secretary of Homeland Security; 

17 ‘‘(F) the Attorney General of the United 

18 States; 

19 ‘‘(G) the Director of the Office of Manage20 ment and Budget; 

21 ‘‘(H) the Director of National Intelligence; 

22 and 

23 ‘‘(I) the heads of those other executive de24 partments or agencies as the President deter25 mines appropriate, on a case-by-case basis. 
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1 ‘‘(5) REFERRAL TO APPROPRIATE MEMBERS OF

2 CFIUS.—Upon receipt of notification of a proposed 

3 or pending transaction under this section, the chair4 person of CFIUS shall assign the appropriate mem5 ber of CFIUS to lead the review and investigation 

6 of such proposed or pending transaction under this 

7 section. 

8 ‘‘(6) INTELLIGENCE REVIEWS.—The Director 

9 of National Intelligence shall— 

10 ‘‘(A) direct the intelligence community, to 

11 collect and analyze information related to any 

12 proposed or pending transaction pursuant to 

13 this section, and to prepare a report of its find14 ings, which the Director shall make available to 

15 members of CFIUS not later than 15 days 

16 after the date of the commencement by CFIUS 

17 of a 30-day (or longer) review of any such 

18 transaction under subsection (a), and before the 

19 commencement of any investigation under sub20 section (b); and 

21 ‘‘(B) ensure that the intelligence commu22 nity remains engaged in the collection, analysis, 

23 and dissemination to CFIUS of any additional 

24 relevant information that may become available 

25 during the course of any investigation con-
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1 ducted under subsection (b) with respect to a 

2 transaction. 

3 ‘‘(7) ASSESSMENTS AND CLASSIFICATIONS OF

4 FOREIGN COUNTRIES FOR USE IN REVIEWS AND IN5 VESTIGATIONS.— 

6 ‘‘(A) IN GENERAL.—Not later than 120 

7 days after the date of enactment of the Foreign 

8 Investment and National Security Act of 2006, 

9 the chairperson and vice chairperson of CFIUS, 

10 in consultation with the Secretary of State, the 

11 Secretary of Commerce, the Secretary of En12 ergy, the Chairman of the Nuclear Regulatory 

13 Commission, and the Director of National Intel14 ligence, shall develop and implement a system 

15 for assessing and classifying individual coun16 tries, including— 

17 ‘‘(i) an assessment of the adherence of 

18 the country to nonproliferation control re19 gimes, including treaties and multilateral 

20 supply guidelines, which shall draw on, but 

21 not be limited to, the annual report on Ad22 herence to and Compliance with Arms 

23 Control, Nonproliferation and Disar24 mament Agreements and Commitments re-
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1 quired by section 403 of the Arms Control 

2 and Disarmament Act; 

3 ‘‘(ii) an assessment of the relationship 

4 of such country with the United States, 

5 specifically on its record on cooperating in 

6 counter-terrorism efforts, which shall draw 

7 on, but not be limited to, the report of the 

8 President to Congress under section 7120 

9 of the Intelligence Reform and Terrorism 

10 Prevention Act of 2004; and 

11 ‘‘(iii) an assessment of the potential 

12 for transshipment or diversion of tech13 nologies with military applications, includ14 ing an analysis of national export control 

15 laws and regulations. 

16 ‘‘(B) CONFIDENTIALITY.—The assessment 

17 and classification system required by subpara18 graph (A) and any information or documentary 

19 material maintained or developed thereunder— 

20 ‘‘(i) shall be used solely by those 

21 agencies involved in reviewing and inves22 tigating acquisitions, mergers, and take23 overs pursuant to this section; 

24 ‘‘(ii) may not be made available to the 

25 public; and 
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1 ‘‘(iii) shall be exempt from disclosure 

2 under section 552 of title 5, United States 

3 Code. 

4 ‘‘(8) STAFF OF CFIUS.—Employees of the De5 partment of the Treasury who serve as staff for 

6 CFIUS shall report directly to the Deputy Secretary 

7 of the Treasury, and shall perform no official func8 tions other than as CFIUS staff. 

9 ‘‘(d) ACTION BY THE PRESIDENT.— 

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

11 the President may take such action for such time as 

12 the President considers appropriate to suspend or 

13 prohibit any transaction which would result in con14 trol of any critical infrastructure or person engaged 

15 in interstate commerce in the United States, pro16 posed or pending on or after the date of enactment 

17 of this section, by or with a foreign person or gov18 ernment, so that such control will not threaten to 

19 impair the national security. 

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

21 The President shall announce the decision on wheth22 er or not to take action pursuant to this subsection 

23 not later than 15 days after an investigation de24 scribed in subsection (b) is completed. 
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1 ‘‘(3) ENFORCEMENT.—The President may di2 rect the Attorney General to seek appropriate relief, 

3 including divestment relief, in the district courts of 

4 the United States in order to implement and enforce 

5 this subsection. 

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

7 may exercise the authority conferred by subsection (d) 

8 only if the President finds that— 

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

10 President to believe that the foreign interest exer11 cising control might take action that threatens to 

12 impair the national security; 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 in the 

18 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 determining whether to take action under subsection 

25 (d) and for purposes of reviews and investigations under 
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1 this section, the President and CFIUS, respectively, shall 

2 consider, among other factors— 

3 ‘‘(1) potential effects on United States critical 

4 infrastructure, including major energy assets; 

5 ‘‘(2) potential effects on United States critical 

6 technologies; 

7 ‘‘(3) domestic production needed for projected 

8 national defense requirements; 

9 ‘‘(4) the capability and capacity of domestic in10 dustries to meet national defense requirements, in11 cluding the availability of human resources, prod12 ucts, technology, materials, and other supplies and 

13 services; 

14 ‘‘(5) the control of domestic industries and 

15 commercial activity by foreign citizens as it affects 

16 the capability and capacity of the United States to 

17 meet the requirements of national security; 

18 ‘‘(6) 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; 

9 ‘‘(B) identified by the Secretary of Defense 

10 as posing a potential regional military threat to 

11 the interests of the United States; or 

12 ‘‘(C) listed under section 309(c) of the Nu13 clear Non-Proliferation Act of 1978, on the 

14 ‘Nuclear Non-Proliferation-Special Country 

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

16 or any successor list; 

17 ‘‘(7) the potential effects of the proposed or 

18 pending transaction on United States international 

19 technological leadership in areas affecting United 

20 States national security; 

21 ‘‘(8) the long term projection of United States 

22 requirements for sources of energy and other critical 

23 resources and materials; and 
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1 ‘‘(9) the ranking developed under subsection 

2 (c)(7) of the country in which the foreign persons 

3 acquiring United States entities are based. 

4 ‘‘(h) CONFIDENTIALITY OF INFORMATION.— 

5 ‘‘(1) IN GENERAL.—Any information or docu6 mentary material filed with CFIUS pursuant to this 

7 section shall be exempt from disclosure under section 

8 552 of title 5, United States Code, and no such in9 formation or documentary material may be made 

10 public, except as may be relevant to any administra11 tive or judicial action or proceeding. 

12 ‘‘(2) NOTIFICATION TO GOVERNOR.—Notwith13 standing paragraph (1), CFIUS shall notify the 

14 Governor of any State regarding a transaction in15 volving critical infrastructure in that State for the 

16 purpose of discussing any security concerns that 

17 arise or may arise from that transaction. Informa18 tion or documentary material made available to a 

19 Governor under this paragraph may not be made 

20 public, including under any law of a State pertaining 

21 to freedom of information or otherwise, but the ex22 ception in paragraph (3) for disclosures to either 

23 House of Congress or Congressional Committees 

24 shall not apply to Governors who receive information 

25 under this paragraph. 
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1 ‘‘(3) DISCLOSURE.—Nothing in this subsection 

2 shall be construed to prevent disclosure to either 

3 House of Congress or to any duly authorized com4 mittee or subcommittee of Congress. 

5 ‘‘(i) ADDITIONAL ASSURANCES.— 

6 ‘‘(1) IN GENERAL.—This subsection shall gov7 ern the provision of any assurances to one or more 

8 agencies of the United States in connection with the 

9 review or investigation of, or any Presidential deci10 sion concerning, any transaction under this section. 

11 ‘‘(2) CONDITION TO DETERMINATION.—Any 

12 such assurances shall be deemed to be a continuing 

13 covenant of the persons on whose behalf such review 

14 is sought (and of all persons controlling such per15 son), the observance of which shall be a condition of 

16 the determination of CFIUS, the President, or both, 

17 on whether to take any action with respect to such 

18 transaction. 

19 ‘‘(3) CONTRACT WITH THE UNITED STATES.— 

20 Such assurances shall be embodied in an agreement 

21 executed by the foreign person or foreign govern22 ment on whose behalf a review of a transaction is 

23 sought under this section and the chairperson or vice 

24 chairperson of CFIUS, on behalf of the United 

25 States. 
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1 ‘‘(4) MONITORING OF AGREEMENT.—Compli2 ance with assurances provided under this subsection 

3 shall be monitored, and may be investigated, in the 

4 same manner as a violation of a civil statute, by the 

5 agency designated by the chairperson of CFIUS, in 

6 consultation with the vice chairperson and the Attor7 ney General of the United States. 

8 ‘‘(5) GRANT OF JURISDICTION; REMEDIES.— 

9 The United States District Court for the District of 

10 Columbia shall have jurisdiction to enforce an agree11 ment referred to in this subsection upon application 

12 by the Attorney General. Available remedies shall in13 clude divestiture, injunctive relief, enforcing the 

14 terms of such agreement, and monetary damages, as 

15 appropriate. 

16 ‘‘(j) NOTICE AND REPORTS TO CONGRESS.— 

17 ‘‘(1) NOTICE REGARDING REVIEWS.— 

18 ‘‘(A) NOTICE AT INITIATION OF REVIEW.— 

19 CFIUS shall transmit written notice of a pro20 posed or pending transaction subject to this 

21 section to the members of Congress specified in 

22 paragraph (3)(C), not later than 10 days after 

23 the date of receipt of a notice of such proposed 

24 or pending transaction, including the identities 
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1 of all parties involved and any foreign govern2 ment ownership or control of any such party. 

3 ‘‘(B) CERTIFICATION AT COMPLETION OF

4 REVIEW.—Upon completion of a review under 

5 subsection (a), the chairperson and vice chair6 person of CFIUS and the head of the lead 

7 agency assigned under subsection (c)(5), shall 

8 transmit a certified notice to the members of 

9 Congress specified in paragraph (3)(C). 

10 ‘‘(2) NOTICE REGARDING INVESTIGATIONS.— 

11 ‘‘(A) NOTICE AT INITIATION OF INVES12 TIGATIONS.—Upon commencement of an inves13 tigation under subsection (b), CFIUS shall no14 tify in writing the members of Congress speci15 fied in paragraph (3)(C). 

16 ‘‘(B) CERTIFICATION AT COMPLETION OF

17 INVESTIGATIONS.—As soon as practicable after 

18 completion of an investigation under subsection 

19 (b), the chairperson and vice chairperson of 

20 CFIUS and the head of the lead agency as21 signed under subsection (c)(5), shall transmit 

22 to the members of Congress specified in para23 graph (3)(C) a certified written report (con24 sistent with the requirements of subsection (h)) 

25 on the results of the investigation, unless the 
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1 matter under investigation has been sent to the 

2 President for decision. 

3 ‘‘(3) CERTIFICATIONS.— 

4 ‘‘(A) IN GENERAL.—Each certified notice 

5 and report required by this subsection shall be 

6 submitted to the members of Congress specified 

7 in subparagraph (C), and shall include— 

8 ‘‘(i) information on whether or not an 

9 investigation occurred under subsection (b) 

10 and has been completed; 

11 ‘‘(ii) a description of the actions taken 

12 by CFIUS with respect to the transaction, 

13 including the details of any legally binding 

14 assurances provided by the foreign entity 

15 that were negotiated as a condition for ap16 proval; and 

17 ‘‘(iii) identification of the determina18 tive factors considered under subsection 

19 (g). 

20 ‘‘(B) CONTENT OF CERTIFICATION.—Each 

21 notice required to be certified by this subsection 

22 shall be signed by the chairperson and vice 

23 chairperson of CFIUS and the head of the lead 

24 agency assigned under subsection (c)(5), and 

25 shall contain a specific attestation of each such 
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1 person that, in the determination of CFIUS, 

2 the transaction that is the subject of the notice 

3 does not impair the national security. 

4 ‘‘(C) MEMBERS OF CONGRESS.—The no5 tices and reports required by this subsection 

6 shall be transmitted to— 

7 ‘‘(i) the Majority Leader and the Mi8 nority Leader of the Senate; 

9 ‘‘(ii) the chair and ranking member of 

10 the Committee on Banking, Housing, and 

11 Urban Affairs of the Senate and of any 

12 committee of the Senate having oversight 

13 over the agency assigned to lead a review 

14 or investigation under subsection (c)(5); 

15 ‘‘(iii) the Speaker and the Minority 

16 Leader of the House of Representatives; 

17 and 

18 ‘‘(iv) the chair and ranking member of 

19 the Committee on Financial Services of the 

20 House of Representatives and of any com21 mittee of the House of Representatives 

22 having oversight over the agency assigned 

23 to lead a review or investigation under sub24 section (c)(5). 
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1 ‘‘(D) TRANSMITTAL TO OTHER MEMBERS

2 OF CONGRESS.—The Majority Leader or the 

3 Minority Leader, in the case of the Senate, and 

4 the Speaker or the Minority Leader, in the case 

5 of the House of Representatives, may provide 

6 the notices and reports required by this para7 graph regarding a proposed or pending trans8 action involving critical infrastructure— 

9 ‘‘(i) in the case of the Senate, to 

10 members of the Senate from the State in 

11 which such critical infrastructure is lo12 cated; and 

13 ‘‘(ii) in the case of the House of Rep14 resentatives, to a member from a Congres15 sional District in which such critical infra16 structure is located. 

17 ‘‘(E) LIMITATION ON DELEGATION OF

18 CERTIFICATIONS.—Notices and reports required 

19 to be certified under this subsection shall be 

20 signed by the chairperson and vice chairperson 

21 of CFIUS, and such certification requirement 

22 may not be delegated. 

23 ‘‘(4) ANNUAL REPORTS.— 

24 ‘‘(A) REPORT REQUIRED.—The Secretary 

25 of the Treasury, on behalf of and after con-
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1 sultation with the members of CFIUS, shall 

2 submit to the Committee on Banking, Housing, 

3 and Urban Affairs of the Senate and the Com4 mittee on Financial Services of the House of 

5 Representatives, on or before March 15 of each 

6 year, a written report on the policy of the 

7 United States with respect to the preservation 

8 of the Nation’s defense production and critical 

9 infrastructure. The Secretary shall appear be10 fore both committees to provide testimony on 

11 such reports. 

12 ‘‘(B) CONTENTS OF REPORT.—Each report 

13 submitted under subparagraph (A) shall con14 tain— 

15 ‘‘(i) an analysis of each transaction 

16 involving a foreign person or foreign gov17 ernment affecting national security that 

18 has occurred during the preceding year to 

19 which the report relates, including the na20 ture of the acquisitions and the effect or 

21 potential impact of such acquisitions on 

22 the United States defense industrial base 

23 and critical infrastructure; 

24 ‘‘(ii) a similar updated analysis for 

25 any transaction that occurred during the 4 
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1 years immediately preceding the year dealt 

2 with in the report in clause (i), including 

3 a separate section discussing the impact of 

4 transactions involving foreign governments 

5 or persons acting on behalf of or in concert 

6 with foreign governments; 

7 ‘‘(iii) a detailed discussion of all per8 ceived risks to national security or United 

9 States critical infrastructure that CFIUS 

10 will take into account in its deliberations 

11 during the year in which the report is de12 livered to the committees; 

13 ‘‘(iv) a table showing on a cumulative 

14 basis, by sector, product, and country of 

15 foreign ownership, the number of acquisi16 tions reviewed, investigated, or both, by 

17 CFIUS, to provide a census of production 

18 potentially relevant to the Nation’s defense 

19 industrial base owned or controlled by for20 eign persons or foreign governments; 

21 ‘‘(v) a summary of any cases before 

22 CFIUS, during the year to which the re23 port relates, in which there were disagree24 ments among the members of CFIUS; 
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1 ‘‘(vi) an evaluation of whether there is 

2 credible evidence of a coordinated strategy 

3 by 1 or more countries or companies to ac4 quire critical infrastructure of or within 

5 the United States or United States compa6 nies involved in research, development, or 

7 production of critical technologies for 

8 which the United States is a leading pro9 ducer; 

10 ‘‘(vii) an evaluation of whether there 

11 are industrial espionage activities directed 

12 or directly assisted by foreign governments 

13 against private United States companies 

14 aimed at obtaining commercial secrets re15 lated to critical technologies or critical in16 frastructure; and 

17 ‘‘(viii) such other matters as are nec18 essary to give a complete disclosure and 

19 analysis of the work of CFIUS during the 

20 year to which the report relates. 

21 ‘‘(C) CLASSIFIED REPORTS.—The evalua22 tions required by clauses (v) and (vi) of sub23 paragraph (B) may be classified. If they are 

24 submitted in classified form, an unclassified 
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1 version of such evaluations shall be made avail2 able to the public. 

3 ‘‘(D) OTHER INFORMATION WITHHELD

4 FROM PUBLIC REPORTS.— 

5 ‘‘(i) PROPRIETARY INFORMATION.— 

6 The chairperson of CFIUS, in consultation 

7 with the vice chairperson of CFIUS, may 

8 withhold from public release other such in9 formation as the chairperson determines is 

10 proprietary information. 

11 ‘‘(ii) RULE OF CONSTRUCTION.— 

12 Nothing in this subparagraph shall pro13 hibit such information from being provided 

14 to relevant Committees of Congress. 

15 ‘‘(5) APPEARANCES BEFORE CONGRESS.—The 

16 chairperson and vice chairperson of CFIUS, and the 

17 heads of such additional CFIUS member agencies 

18 specified in a written request by the Chairman of 

19 the Committee on Banking, Housing, and Urban Af20 fairs of the Senate shall annually appear before the 

21 Committee on Banking, Housing, and Urban Affairs 

22 and the Committee on Financial Services of the 

23 House of Representatives to provide testimony on 

24 the activities of CFIUS. 

25 ‘‘(k) REGULATIONS.— 
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1 ‘‘(1) IN GENERAL.—The Secretary shall issue 

2 regulations to carry out this section. Such regula3 tions shall, to the extent possible, minimize paper4 work burdens and shall, to the extent possible, co5 ordinate reporting requirements under this section 

6 with reporting requirements under any other provi7 sion of Federal law. 

8 ‘‘(2) REGULATIONS RELATING TO DEFINI9 TIONS.—Not later than 30 days after the date of en10 actment of the Foreign Investment and National Se11 curity Act of 2006, the Secretary of the Treasury 

12 and the Secretary of Defense shall jointly agree to 

13 and issue rules concerning the manner in which the 

14 definition of the term ‘critical infrastructure’ in sub15 section (m)(2) shall be applied to particular acquisi16 tions, mergers, and takeovers, for purposes of the 

17 mandatory investigation requirement of subsection 

18 (b)(1)(A), except that, until such rules are issued in 

19 final form and become effective, such definition shall 

20 be applied without regard to any such rules (whether 

21 proposed or otherwise). 

22 ‘‘(l) EFFECT ON OTHER LAW.—Nothing in this sec23 tion shall be construed to alter or affect any existing 

24 power, process, regulation, investigation, enforcement 

25 measure, or review provided by any other provision of law, 
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1 including the International Emergency Economic Powers 

2 Act, or of the President or Congress. 

3 ‘‘(m) DEFINITIONS.—As used in this section— 

4 ‘‘(1) the term ‘critical infrastructure’ means, 

5 subject to rules issued under subsection (k)(2), any 

6 systems and assets, whether physical or cyber-based, 

7 so vital to the United States that the degradation or 

8 destruction of such systems or assets would have a 

9 debilitating impact on national security, including 

10 national economic security and national public 

11 health or safety; 

12 ‘‘(2) the term ‘critical technologies’ means tech13 nologies identified under title VI of the National 

14 Science and Technology Policy, Organization, and 

15 Priorities Act of 1976, or other critical technology, 

16 critical components, or critical technology items es17 sential to national defense identified pursuant to this 

18 section; 

19 ‘‘(3) the terms ‘Committee on Foreign Invest20 ment in the United States’ and ‘CFIUS’ mean the 

21 committee established under subsection (c); 

22 ‘‘(4) the term ‘foreign government’ means any 

23 government or body exercising governmental func24 tions, other than the Government of the United 

25 States or of a State or political subdivision thereof. 
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1 The term includes national, State, provincial, and 

2 municipal governments, including their respective 

3 departments, agencies, government-owned enter4 prises, and other agencies and instrumentalities; 

5 ‘‘(5) the term ‘foreign person’ means any non6 United States national, any organization owned or 

7 controlled by such a person, and any entity orga8 nized under the laws of a country other than the 

9 United States, and any entity owned or controlled by 

10 such entity; 

11 ‘‘(6) the term ‘intelligence community’ has the 

12 same meaning as in section 3 of the National Secu13 rity Act of 1947 (50 U.S.C. 401a); and 

14 ‘‘(7) the term ‘transaction’ means a proposed or 

15 pending merger, acquisition, or takeover’’. 

Calendar No. 474 

109TH CONGRESS 

2D SESSION S. 3549 

[Report No. 109–264] 

A BILL 

To amend the Defense Production Act of 1950, to 

respect thereto, and for other purposes. vide for enhanced Congressional oversight with foreign investment in the United States, to prostrengthen Government review and oversight of 

JUNE 21, 2006 

Read twice and placed on the calendar