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NOTES:


Source

(Sept. 8, 1950, ch. 932, title VII, § 721, as added Pub. L. 100–418, title V, § 5021, Aug. 23, 1988, 102 Stat. 1425; amended Pub. L. 102–484, div. A, title VIII, § 837(a)–(c), (e), Oct. 23, 1992, 106 Stat. 2463–2465; Pub. L. 102–558, title I, § 163, Oct. 28, 1992, 106 Stat. 4219; Pub. L. 103–359, title VIII, § 809(d), Oct. 14, 1994, 108 Stat. 3454; Pub. L. 110–49, §§ 2–7(b), 8–10, July 26, 2007, 121 Stat. 246, 252–257, 259.)

References in Text

For the effective date of the Foreign Investment and National Security Act of 2007, referred to in subsecs. (b)(2)(E) and (h)(2), see section 12 of Pub. L. 110–49, set out as an Effective Date of 2007 Amendment note under section 5315 of Title 5, Government Organization and Employees.
The International Emergency Economic Powers Act, referred to in subsecs. (d)(4)(B) and (i), is title II of Pub. L. 95–223, Dec. 28, 1977, 91 Stat. 1626, which is classified generally to chapter 35 (§ 1701 et seq.) of Title 50, War and National Defense. For complete classification of this Act to the Code, see Short Title note set out under section 1701 of Title 50 and Tables.
Section 7120 of the Intelligence Reform and Terrorism Prevention Act of 2004, referred to in subsec. (f)(9)(B), is section 7120 of Pub. L. 108–458, title VII, Dec. 17, 2004, 118 Stat. 3803, which is not classified to the Code.
Executive Order 11858, referred to in subsec. (k)(1), is set out as a note under this section.
The National Security Act of 1947, referred to in (l)(2)(B), is act July 26, 1947, ch. 343, 61 Stat. 495. For complete classification of this Act to the Code, see Short Title note set out under section 401 of Title 50, War and National Defense, and Tables.

Amendments

2007—Subsec. (a). Pub. L. 110–49, § 2, added subsec. (a) and struck out former subsec. (a). Prior to amendment, text of subsec. (a) read as follows: “The President or the President’s designee may make an investigation to determine the effects on national security of mergers, acquisitions, and takeovers proposed or pending on or after the date of enactment of this section by or with foreign persons which could result in foreign control of persons engaged in interstate commerce in the United States. If it is determined that an investigation should be undertaken, it shall commence no later than 30 days after receipt by the President or the President’s designee of written notification of the proposed or pending merger, acquisition, or takeover as prescribed by regulations promulgated pursuant to this section. Such investigation shall be completed no later than 45 days after such determination.”
Subsec. (b). Pub. L. 110–49, § 2, added subsec. (b) and struck out former subsec. (b). Prior to amendment, text of subsec. (b) read as follows: “The President or the President’s designee shall make an investigation, as described in subsection (a), in any instance in which an entity controlled by or acting on behalf of a foreign government seeks to engage in any merger, acquisition, or takeover which could result in control of a person engaged in interstate commerce in the United States that could affect the national security of the United States. Such investigation shall—
“(1) commence not later than 30 days after receipt by the President or the President’s designee of written notification of the proposed or pending merger, acquisition, or takeover, as prescribed by regulations promulgated pursuant to this section; and
“(2) shall be completed not later than 45 days after its commencement.”
Subsec. (d). Pub. L. 110–49, § 6, added subsec. (d) and struck out former subsec. (d). Prior to amendment, text of subsec. (d) read as follows: “Subject to subsection (d), the President may take such action for such time as the President considers appropriate to suspend or prohibit any acquisition, merger, or takeover, of a person engaged in interstate commerce in the United States proposed or pending on or after the date of enactment of this section by or with foreign persons so that such control will not threaten to impair the national security. The President shall announce the decision to take action pursuant to this subsection not later than 15 days after the investigation described in subsection (a) is completed. The President may direct the Attorney General to seek appropriate relief, including divestment relief, in the district courts of the United States in order to implement and enforce this section.”
Subsec. (e). Pub. L. 110–49, § 6, added subsec. (e) and struck out former subsec. (e). Prior to amendment, text of subsec. (e) read as follows: “The President may exercise the authority conferred by subsection (c) only if the President finds that—
“(1) there is credible evidence that leads the President to believe that the foreign interest exercising control might take action that threatens to impair the national security, and
“(2) provisions of law, other than this section and the International Emergency Economic Powers Act (50 U.S.C. 1701–1706), do not in the President’s judgment provide adequate and appropriate authority for the President to protect the national security in the matter before the President.
“The provisions of subsection (d) of this section shall not be subject to judicial review.”
Subsec. (f). Pub. L. 110–49, § 4(1), struck out “among other factors” after “consider” in introductory provisions.
Subsec. (f)(4)(B), (C). Pub. L. 110–49, § 4(2)(A)–(C), added subpar. (B) and redesignated former subpar. (B) as (C).
Subsec. (f)(6) to (11). Pub. L. 110–49, § 4(2)(D)–(4), added pars. (6) to (11).
Subsec. (g). Pub. L. 110–49, § 7(a), amended subsec. (g) generally. Prior to amendment, text of subsec. (g) read as follows: “The President shall immediately transmit to the Secretary of the Senate and the Clerk of the House of Representatives a written report of the President’s determination of whether or not to take action under subsection (d), including a detailed explanation of the findings made under subsection (e) and the factors considered under subsection (f). Such report shall be consistent with the requirements of subsection (c) of this Act.”
Subsec. (h). Pub. L. 110–49, § 9, amended subsec. (h) generally. Prior to amendment, text of subsec. (h) read as follows: “The President shall direct the issuance of regulations to carry out this section. Such regulations shall, to the extent possible, minimize paperwork burdens and shall to the extent possible coordinate reporting requirements under this section with reporting requirements under any other provision of Federal law.”
Subsec. (i). Pub. L. 110–49, § 10, amended subsec. (i) generally. Prior to amendment, text of subsec. (i) read as follows: “Nothing in this section shall be construed to alter or affect any existing power, process, regulation, investigation, enforcement measure, or review provided by any other provision of law.”
Subsec. (k). Pub. L. 110–49, § 3, added subsec. (k) and struck out former subsec. (k) which defined “critical technologies” and required the President and such agencies as the President shall designate to submit quadrennial reports, which could be classified, to Congress concerning credible evidence of a coordinated strategy by 1 or more countries or companies to acquire U.S. companies involved in critical technologies or foreign industrial espionage activities directed at obtaining commercial secrets related to critical technologies.
Subsec. (l). Pub. L. 110–49, § 5, added subsec. (l).
Subsec. (m). Pub. L. 110–49, § 7(b), added subsec. (m).
Subsec. (n). Pub. L. 110–49, § 8, added subsec. (n).
1994—Subsec. (k)(1)(B). Pub. L. 103–359 inserted “or directly assisted” after “directed”.
1992—Subsecs. (b) to (e). Pub. L. 102–484, § 837(a), added subsec. (b) and redesignated former subsecs. (b) to (d) as (c) to (e), respectively. Former subsec. (e) redesignated (f).
Subsec. (f). Pub. L. 102–484, § 837(a)(1), (b), redesignated subsec. (e) as (f) and added pars. (4) and (5). Former subsec. (f) redesignated (g).
Subsec. (g). Pub. L. 102–484, § 837(c), amended subsec. (g) generally. Prior to amendment, subsec. (g) read as follows: “If the President determines to take action under subsection (c), the President shall immediately transmit to the Secretary of the Senate and the Clerk of the House of Representatives a written report of the action which the President intends to take, including a detailed explanation of the findings made under subsection (d).”
Pub. L. 102–484, § 837(a)(1), redesignated subsec. (f) as (g). Former subsec. (g) redesignated (h).
Subsecs. (h), (i). Pub. L. 102–484, § 837(a)(1), redesignated subsecs. (g) and (h) as (h) and (i), respectively.
Subsec. (j). Pub. L. 102–484, § 837(e), added subsec. (j).
Subsec. (k). Pub. L. 102–558 added subsec. (k).

Effective Date of 2007 Amendment

Amendment by Pub. L. 110–49 applicable after the end of the 90-day period beginning on July 26, 2007, see section 12 of Pub. L. 110–49, set out as a note under section 5315 of Title 5, Government Organization and Employees.

Effective Date of 1992 Amendment

Amendment by Pub. L. 102–558 deemed to have become effective Mar. 1, 1992, see section 304 of Pub. L. 102–558, set out as a note under section 2062 of this Appendix.

Delegation of Functions

For delegation of functions of President under subsecs. (b)(1)(A), (D), (h), and (m)(3)(A) of this section, see section 4(a), (b) of Ex. Ord. No. 11858, May 7, 1975, 40 F.R. 20263, set out below.

Study and Report on Foreign Direct Investments in United States

Pub. L. 110–49, § 7(c), July 26, 2007, 121 Stat. 258, provided that:
“(1) Study required.—Before the end of the 120-day period beginning on the date of enactment of this Act [July 26, 2007] and annually thereafter, the Secretary of the Treasury, in consultation with the Secretary of State and the Secretary of Commerce, shall conduct a study on foreign direct investments in the United States, especially investments in critical infrastructure and industries affecting national security, by—
“(A) foreign governments, entities controlled by or acting on behalf of a foreign government, or persons of foreign countries which comply with any boycott of Israel; or
“(B) foreign governments, entities controlled by or acting on behalf of a foreign government, or persons of foreign countries which do not ban organizations designated by the Secretary of State as foreign terrorist organizations.
“(2) Report.—Before the end of the 30-day period beginning upon the date of completion of each study under paragraph (1), and thereafter in each annual report under section 721(m) of the Defense Production Act of 1950 [50 App. U.S.C. 2170 (m)] (as added by this section), the Secretary of the Treasury shall submit a report to Congress, for transmittal to all appropriate committees of the Senate and the House of Representatives, containing the findings and conclusions of the Secretary with respect to the study described in paragraph (1), together with an analysis of the effects of such investment on the national security of the United States and on any efforts to address those effects.”

Ex. Ord. No. 11858. Foreign Investment in the United States

Ex. Ord. No. 11858, May 7, 1975, 40 F.R. 20263, as amended by Ex. Ord. No. 12188, Jan. 2, 1980, 45 F.R. 989; Ex. Ord. No. 12661, Dec. 27, 1988, 54 F.R. 779; Ex. Ord. No. 12860, Sept. 3, 1993, 58 F.R. 47201; Ex. Ord. No. 13286, § 57, Feb. 28, 2003, 68 F.R. 10629; Ex. Ord. No. 13456, § 1, Jan. 23, 2008, 73 F.R. 4677, provided:
By the authority vested in me as President by the Constitution and the laws of the United States of America, including section 721 of the Defense Production Act of 1950, as amended (50 App. U.S.C. 2170), and section 301 of title 3, United States Code, it is hereby ordered as follows:
Section 1. Policy. International investment in the United States promotes economic growth, productivity, competitiveness, and job creation. It is the policy of the United States to support unequivocally such investment, consistent with the protection of the national security.
Sec. 2. Definitions. (a) The “Act” as used in this order means section 721 of the Defense Production Act of 1950, as amended.
(b) Terms used in this order that are defined in subsection 721(a) of the Act shall have the same meaning in this order as they have in such subsection.
(c) “Risk mitigation measure” as used in this order means any provision of a risk mitigation agreement or a condition to which section 7 of this order refers.
Sec. 3. Establishment. (a) There is hereby established the Committee on Foreign Investment in the United States (the “Committee”) as provided in the Act.
(b) In addition to the members specified in the Act, the following heads of departments, agencies, or offices shall be members of the Committee:
(i) The United States Trade Representative;
(ii) The Director of the Office of Science and Technology Policy; and
(iii) The heads of any other executive department, agency, or office, as the President or the Secretary of the Treasury determines appropriate, on a case-by-case basis.
(c) The following officials (or their designees) shall observe and, as appropriate, participate in and report to the President on the Committee’s activities:
(i) The Director of the Office of Management and Budget;
(ii) The Chairman of the Council of Economic Advisers;
(iii) The Assistant to the President for National Security Affairs;
(iv) The Assistant to the President for Economic Policy; and
(v) The Assistant to the President for Homeland Security and Counterterrorism.
Sec. 4. Duties of the Secretary of the Treasury.
(a) The functions of the President under subsections (b)(1)(A) (relating to review and consideration after notification), (b)(1)(D) (relating to unilateral initiation of review and consideration), and (m)(3)(A) (relating to inclusion in annual report and designation) of the Act are assigned to the Secretary of the Treasury.
(b) The Secretary of the Treasury shall perform the function of issuance of regulations under section 721(h) of the Act. The Secretary shall consult the Committee with respect to such regulations prior to any notice and comment and prior to their issuance.
(c) Except as otherwise provided in the Act or this order, the chairperson shall have the authority, exclusive of the heads of departments or agencies, after consultation with the Committee:
(i) to act, or authorize others to act, on behalf of the Committee; and
(ii) to communicate on behalf of the Committee with the Congress and the public.
(d) The chairperson shall coordinate the preparation of and transmit the annual report to the Congress provided for in the Act and may assign to any member of the Committee, as the chairperson determines appropriate and consistent with the Act, responsibility for conducting studies and providing analyses necessary for the preparation of the report.
(e) After consultation with the Committee, the chairperson may request that the Director of National Intelligence begin preparing the analysis required by the Act at any time, including prior to acceptance of the notice of a transaction, in accordance with otherwise applicable law. The Director of National Intelligence shall provide the Director’s analysis as soon as possible and consistent with section 721(b)(4) of the Act.
Sec. 5. Lead Agency. (a) The lead agency or agencies (“lead agency”) shall have primary responsibility, on behalf of the Committee, for the specific activity for which the Secretary of the Treasury designates it a lead agency.
(b) In acting on behalf of the Committee, the lead agency shall keep the Committee fully informed of its activities. In addition, the lead agency shall notify the chairperson of any material action that the lead agency proposes to take on behalf of the Committee, sufficiently in advance to allow adequate time for the chairperson to consult the Committee and provide the Committee’s direction to the lead agency not to take, or to amend, such action.
Sec. 6. Reviews and Investigations.
(a) Any member of the Committee may conduct its own inquiry with respect to the potential national security risk posed by a transaction, but communication with the parties to a transaction shall occur through or in the presence of the lead agency, or the chairperson if no lead agency has been designated.
(b) The Committee shall undertake an investigation of a transaction in any case, in addition to the circumstances described in the Act, in which following a review a member of the Committee advises the chairperson that the member believes that the transaction threatens to impair the national security of the United States and that the threat has not been mitigated.
(c) The Committee shall send a report to the President requesting the President’s decision with respect to a review or investigation of a transaction in the following circumstances:
(i) the Committee recommends that the President suspend or prohibit the transaction;
(ii) the Committee is unable to reach a decision on whether to recommend that the President suspend or prohibit the transaction; or
(iii) the Committee requests that the President make a determination with regard to the transaction.
(d) Upon completion of a review or investigation of a transaction, the lead agency shall prepare for the approval of the chairperson the appropriate certified notice or report to the Congress called for under the Act. The chairperson shall transmit such notice or report to the Congress, as appropriate.
Sec. 7. Risk Mitigation. (a) The Committee, or any lead agency acting on behalf of the Committee, may seek to mitigate any national security risk posed by a transaction that is not adequately addressed by other provisions of law by entering into a mitigation agreement with the parties to a transaction or by imposing conditions on such parties.
(b) Prior to the Committee or a department or agency proposing risk mitigation measures to the parties to a transaction, the department or agency seeking to propose any such measure shall prepare and provide to the Committee a written statement that: (1) identifies the national security risk posed by the transaction based on factors including the threat (taking into account the Director of National Intelligence’s threat analysis), vulnerabilities, and potential consequences; and (2) sets forth the risk mitigation measures the department or agency believes are reasonably necessary to address the risk. If the Committee agrees that mitigation is appropriate and approves the risk mitigation measures, the lead agency shall seek to negotiate such measures with the parties to the transaction.
(c) A risk mitigation measure shall not, except in extraordinary circumstances, require that a party to a transaction recognize, state its intent to comply with, or consent to the exercise of any authorities under existing provisions of law.
(d) The lead agency designated for the purpose of monitoring a risk mitigation measure shall seek to ensure that adequate resources are available for such monitoring. When designating a lead agency for those purposes, the Secretary of the Treasury shall consider the agency’s views on the adequacy of its resources for such purposes.
(e)(i) Nothing in this order shall be construed to limit the ability of a department or agency, in the exercise of authorities other than those provided under the Act, to:
(A) conduct inquiries with respect to a transaction;
(B) communicate with the parties to a transaction; or
(C) negotiate, enter into, impose, or enforce contractual provisions with the parties to a transaction.
(ii) A department or agency shall not condition actions or the exercise of authorities to which paragraph (i) of this subsection refers upon the exercise, or forbearance in the exercise, of its authority under the Act or this order, and no authority under the Act shall be available for the enforcement of such actions or authorities.
(f) The Committee may initiate a review of a transaction that has previously been reviewed by the Committee only in the extraordinary circumstances provided in the Act.
Sec. 8. Additional Assignments to the Committee. In addition to the functions assigned to the Committee by the Act, the Committee shall review the implementation of the Act and this order and report thereon from time to time to the President, together with such recommendations for policy, administrative, or legislative proposals as the Committee determines appropriate.
Sec. 9. Duties of the Secretary of Commerce. The Secretary of Commerce shall:
(a) obtain, consolidate, and analyze information on foreign investment in the United States;
(b) monitor and, where necessary, improve procedures for the collection and dissemination of information on foreign investment in the United States;
(c) prepare for the public, the President or heads of departments or agencies, as appropriate, reports, analyses of trends, and analyses of significant developments in appropriate categories of foreign investment in the United States; and
(d) compile and evaluate data on significant transactions involving foreign investment in the United States.
Sec. 10. General Provisions. (a) The heads of departments and agencies shall provide, as appropriate and to the extent permitted by law, such information and assistance as the Committee may request to implement the Act and this order.
(b) Nothing in this order shall be construed to impair or otherwise affect:
(i) authority granted by law to a department or agency or the head thereof;
(ii) functions of the Director of the Office of Management and Budget relating to budget, administrative, or legislative proposals; or
(iii) existing mitigation agreements.
(c) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(d) Officers of the United States with authority or duties under the Act or this order shall ensure that, in carrying out the Act and this order, the actions of departments, agencies, and the Committee are consistent with the President’s constitutional authority to: (i) conduct the foreign affairs of the United States; (ii) withhold information the disclosure of which could impair the foreign relations, the national security, the deliberative processes of the Executive, or the performance of the Executive’s constitutional duties; (iii) recommend for congressional consideration such measures as the President may judge necessary and expedient; and (iv) supervise the unitary executive branch.
Sec. 11. Revocation. Section 801 of Executive Order 12919 of June 3, 1994, is revoked.

Interim Directive Regarding Disposition of Certain Mergers, Acquisitions, and Takeovers

Memorandum of the President of the United States, Oct. 26, 1988, 53 F.R. 43999, provided:
Memorandum for the Secretary of the Treasury
By virtue of the authority vested in me by the Constitution and statutes of the United States, including without limitation Section 301 of Title 3 of the United States Code, the Defense Production Act of 1950, as amended (50 App. U.S.C. 2061 et seq.), and the Omnibus Trade and Competitiveness Act of 1988 (Pub. L. 100–418, August 23, 1988) (the “Act”) [see Tables for classification], it is ordered as follows:
Pending the issuance of an Executive order to implement the Act, the Secretary of the Treasury is hereby designated and empowered to perform the following-described functions of the President: The authority vested in the President by Section 721 of the Defense Production Act of 1950, as amended [this section], relative to mergers, acquisitions, and takeovers proposed or pending on or after the date of enactment of the Act [Aug. 23, 1988] by or with foreign persons which could result in foreign control of persons engaged in interstate commerce in the United States.
The Secretary of the Treasury shall consult with the Committee on Foreign investment in the United States, established pursuant to Executive Order No. 11858 [set out above] and chaired by the representative of the Secretary of the Treasury, to take such actions or make such recommendations as requested by the Secretary of the Treasury.
The delegation provided herein shall terminate, and this interim directive shall be without any further effect, except as may be provided in the Executive order implementing the Act, upon the effective date of such order.
This interim directive shall be published in the Federal Register.
Ronald Reagan.

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