A bipartisan group of lawmakers has written letters to both the House and Senate Armed Services Committees, advocating for the implementation of stricter restrictions on outbound investments by 2024 to protect national security interests. This comes amid increasing concerns over the national security threats posed by foreign adversaries, particularly China.
Representative Mike Gallagher (R-WI), Chairman of the House Select Committee on the Chinese Communist Party (CCP), and Senator Dan Sullivan (R-AK) spearheaded this initiative among a group of 41 lawmakers. The proposal was put forth in light of discussions regarding the annual National Defense Authorization Act (NDAA). The NDAA has been passed consistently for over six decades. This annual bill sets out defense policy guidelines and decides how military funds should be allocated; it is regularly revised and updated by Congress, according to Investopedia.
The legislators expressed their profound concern about potential national security threats arising from outbound capital flows and knowledge transfer to adversaries of the United States, especially the People's Republic of China (PRC). They emphasized in their press release that there is a robust bipartisan agreement in both U.S. Senate and U.S. House that Congress must address these risks. For years, they noted, U.S. firms have been funneling capital, intellectual property, and innovation into PRC, aiding its progress in dual-use critical technology areas. To protect national security, they stressed that it's crucial for the U.S to gain insight into vulnerabilities by mandating notification of sensitive investments by American companies in these countries.
Alongside Gallagher and Sullivan, other co-authors included Ranking Member Raja Krishnamoorthi (D-IL) from the Select Committee on CCP; Chairman Michael McCaul (R-TX) and Ranking Member Gregory Meeks (D-NY) from the House Foreign Affairs Committee; as well as Select Committee members Dan Newhouse (R-WA), John Moolenaar (R-MI), and others.
The lawmakers also noted that none of the current government tools fully address the specific risk posed by transferring U.S. capital and knowledge to adversaries. To protect American interests, they argued for assessing our vulnerabilities in full scope and utilizing the data provided by outbound investment screening. The ultimate aim would be to create strategies ensuring sensitive technologies with dual-use applications are not further conceded to adversaries.
