The U.S. Treasury official who oversees the Committee on Foreign Investment in the United States (CFIUS) spoke on Thursday in support of efforts in Congress to strengthen the group, saying its case load has more than doubled since the financial crisis and cases have grown increasingly complex.
Heath Tarbert, who heads the committee that reviews proposed purchases of U.S. assets by foreign companies to ensure they do not harm national security, praised proposed legislation to expand the remit of CFIUS, saying it will help the organisation keep up with complex deals structured to hide foreign interests and more.
"We continue to be made aware of transactions we lack the jurisdiction to review but which pose similar national security concerns to those already before CFIUS," Tarbert said in testimony before the Senate Banking Committee.
He said the average volume of CFIUS cases has been growing steadily from fewer than 100 in 2009 and 2010 to nearly 240 in 2017.
In 2017 about 70 percent of cases ended up in an investigation, compared with just four percent 10 years earlier.
His testimony came a day after the Trump administration confirmed its support of bipartisan bills in Congress to toughen U.S. foreign investment rules.
The Foreign Investment Risk Review Modernization Act would broaden the government`s power to stop foreign purchases of U.S. firms by expanding CFIUS` reach to allow it to review, and potentially reject, smaller investments and add new national security factors for CFIUS to consider. Those factors include whether information about Americans, such as Social Security numbers, would be exposed as part of the transaction or whether the deal would facilitate fraud.
The Act would also establish fees capped at 1 percent of the value of the transaction or $300,000, whichever is less, which would be deposited in a CFIUS fund.
The proposed legislation is backed by some companies, including Oracle Corp