SWF Radar CFIUS

AFP reports that, “The rules retain the Committee on Foreign Investment in the United States (CFIUS) but with formal time limits and notification requirements for Congress. The revision ‘reaffirms America’s longstanding policy of openness to investment, consistent with the protection of our national security,’ said Treasury Secretary Henry Paulson.”

Xinhua reports that, “A single acquisition could not solve the systematic U.S. credit crisis, a senior official with the China Investment Corp. (CIC) [who spoke on the condition of anonymity] said Friday.”

The report quotes the official as adding that, “Even if the CIC intended to buy a stake, it could be very hard now as the purchase of a stake, even one smaller than 10 percent, could be subject to the U.S. government foreign investment review.”

The WSJ’s Deal Journal blog writes that, “China is creating a merger law to protect its national security–setting up a review process similar to the Committee on Foreign Investment in the U.S., or CFIUS.”

The Financial Times reports that, “Investments by Russian companies and sovereign wealth funds into the US are likely to face tougher scrutiny in Washington in the wake of the country’s conflict with Georgia, experts predict.”

The article adds that, “Gazprom, the energy giant majority-owned by the Russian government, said in June that it was considering building its presence in the US through acquisitions. Any attempt by Gazprom to invest in the US was already likely to be closely examined by the Committee on Foreign Investment, or Cfius, the executive branch agency that investigates sensitive deals on national security grounds. But Cfius is now likely to view such a transaction even more sceptically.”

The International Financial Law Review reports that, “In a letter to the US treasury, the Chinese Securities Regulatory Commission has criticised proposals affecting the Committee on Foreign Investment in the US. The US reaction could lead to protectionist stalemate.”

Thomson Reuters reports that, “Sovereign wealth fund China Investment Corp (CIC) has urged the U.S. Treasury Department to further clarify how foreign investments in the United States will be reviewed for national security risks.”

The Deal writes that, “Treasury Department officials on Friday listened to Washington attorneys rattle off a raft of concerns about the Bush administration’s plans for new rules governing foreign acquisitions of U.S. assets.”

Reuters reports that, “The business community and investors urged the U.S. Treasury on Friday to clarify how foreign investments in the United States will be reviewed for national security risks. At a public meeting to discuss the Treasury’s proposed rules, there were calls for clarification on what needs to be submitted, how Congress is involved and what constitutes control of a U.S. business.”

The New York Sun writes that, “In July, America was a country that viewed foreign capital more as a potential national security threat than as an economic life preserver. Back then, substantial infusions of foreign capital into major American financial institutions were the exception rather than the norm. What a difference nine months makes.”

Thomson Financial reports that, “The U.S. Treasury today released a proposed set of revisions for the review of foreign investments that is aimed at reducing the chances of unpleasant surprises from the process for either the U.S. government or the would-be investors.”