Problems relating to Trade and Investment on United States
1. Restrictions on entry of foreign capitals |
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Issue |
Issue details |
Requests |
Reference |
| (1) The Requirements are nebulous for Granting Approval on Foreign Acquisition of Enterprises | - Although not compulsory in all investments, in order to play it safe, a Member Firm has responded to most cases the requirements of the Committee on Foreign Investment in the United States (CFIUS) on the U.S. National Security, in as much as the retroactive conformance to CFIUS requires complications with onerous responsive measures. | - In light of Japan being one of the major alliance countries with the U.S., it is requested that the GOU: -- completely exempts Japan of the CFIUS requirements, or -- identifies the sectors that require the measures responsive to the CFIUS National Security Test. |
- Federal Omnibus Trade and Competitiveness Act (1988), Section 5021 - The Foreign Investment and National Security Act of 2007 - The Exon-Florio Provision |
| (Action) - In July 2007, so called "Exon-Florio provision" was amended as "The Foreign Investment and National Security Act of 2007" to tighten the Congress supervision such as the review of the assessment standard and the reporting to the Congress of assessments or reviews. - On 21 April 2008, Department of Treasury (DOT) issued Proposed Regulations to implement FINSA. The Proposed Regulations provide for extensive examination, including "control" exercised by foreign investors in a U.S. corporation, without, however, defining expressly the precise numbers for the capital contribution rate, etc. It merely states to the effect, "if such transactions threaten the national security of the United States". It further provides that plural foreign investors under informal joint investment agreement may exercise control. In addition, the scope of examination is widened to cover the new field of "investment into infrastructure of material importance" for the U.S. - CFIUS in 2008 opposed to proposed capital contribution by Huawei (PRC) into 3Com, the U.S. corporation in network security, in 2010 opposed to Huawei's proposed capital contribution into 2Wire in mobile communication business, and into Motorola, and in February 2011, opposed to Huawei's proposed asset acquisition of 3Leaf, a telecommunication corporation in the U.S. - According to "2009 CFIUS (The Committee on Foreign Investment in the U.S.) Annual Report", Notices were issued on each of the 155-transactions (of which 8-notices concerned Japanese enterprises) in 2008, examination and investigation were made on 23-Notices. By 2009, the number of Notices dropped to 65 (of which 4-notices concerned Japanese enterprises), examination and investigation were made on 25-Notices. - On 28 September 2012, President Obama issued an order to Ralls Corporation, a U.S. corporation affiliated with a Chinese firm, to revoke its acquisition of the 4-American firms promoting wind power generation in the State of Oregon and to suspend the business, based upon the CFIUS' recommendations. CFIUS earlier submitted its recommendation for suspension of the project, due to the national security reasons. - In December 2012, CFIUS released the Annual Report to Congress. It states: "Investors from China accounted for seven percent of the notices for the period (20 notices), up from five percent for 2008-2010, with the number of notices filed by Chinese acquirers growing each year." - According to The Committee on Foreign Investment in the United States (CFIUS) Annual Report to Congress, CFIUS issued the total of 147-Notices in 2014, a substantial jump from 114-Notices in 2013: namely, 24 PRC, 21 U.K., 15 Canada, 10 Japan, 6 France, and 9 Germany. |
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