Reforming the Committee on Foreign Investments of the United States (CFIUS): the Challenge of Technology

Absztrakt

n 1988 the United States Congress approved the Exon-Florio Amendment to strengthen the Defense Production Act (DPA) of 1950, previously passed at the outset of the Korean War to ensure that United States (US) industrial resources would be made available to meet national security needs. The DPA permits the President to legally compel industry to prioritize the delivery of goods and services to military and civilian agencies, and provides the legal basis for Executive (Presidential) government review of foreign investments in US companies.1 Ultimately, the review-maker for a major provision of the DPA became the Committee on Foreign Investment of the United States (CFIUS).
Today, the CFIUS is facing the challenge of simultaneously protecting US national security focusing on inward investment and technology acquisition while maintaining an open investment climate. However, the traditional CFIUS assessment mechanism has not been designed to oversee early-stage technology, or to check transactions involving Artificial Intelligence, Machine Learning and other emerging, dual-use technologies. The imperative of restoration of the National Security Innovation Base (NISB), requested in the 2017 US National Security Strategy, may suffice to address that critical strategic challenge even though new and more detailed legislative instruments must be introduced soon.
The paper is organized as follows. Section I briefly describes the history and role of the CFIUS in the National Security Assessment Process. Section II presents an overview of the reform proposals of the CFIUS mechanism aimed at strengthening CFIUS’ protective capabilities. Section III introduces the core subject in the CFIUS reforming process, the technological challenge. In that section, the most relevant developments in the technological competition, particularly raised by the Artificial Intelligence, in China and in the United States are also briefly analyzed. Section IV gives some conclusions.