is poised to strengthen the procedures for vetting both foreign
investments in the U.S. and overseas transactions involving cutting-edge
Negotiators from the Senate and the House reached a deal on the final
text of the provision to bolster both the Committee on Foreign
Investment in the U.S. and the U.S. export-control system, in an effort
to block Chinese and other foreign transactions that could harm national
The measure represents the first major change in a decade to the rules
governing foreign investment reviews.
The provision, which has been attached to a must-pass military spending
bill, could become law as soon as this month.
CFIUS is an interagency committee that reviews proposed foreign
takeovers of U.S. businesses. The committee, led by the Treasury, can
advise the president to block such deals on national-security grounds.
Export controls regulate which U.S. technologies can be sent abroad.
Mr. Cornyn began talking with Treasury officials about cracking down on
certain foreign deals in October 2016, according to a person familiar
with the matter. At that time, Chinese investment was pouring into the
country, tripling to a record $46 billion by the end of the year,
according to analysts at New York research firm Rhodium Group.
Mr. Cornyn has said he was particularly concerned that China was
exploiting loopholes in the CFIUS process to acquire U.S. technology
with military applications. A February 2017 report by DIUx, a Defense
Department unit, laid out just how Chinese investors were doing so and
provided a road map for some of the bill’s text.