Lawmakers Release Updated Version of Outbound Investment Screening Bill
A bipartisan group of lawmakers this week reintroduced a bill that could establish an outbound investment screening regime to prevent China and others from illegally acquiring sensitive U.S. technology.
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The bill, similar to the original National Critical Capabilities Defense Act introduced in 2021, would create an interagency committee to screen investment transactions across certain sectors. The new version of the legislation would specifically authorize the committee to review outbound investments in several sectors that weren’t named in the original legislation, such as quantum computing, large capacity batteries, critical minerals and materials, active pharmaceutical ingredients and automobile manufacturing. The bill still covers the semiconductor and artificial intelligence sectors.
Unlike the original bill, the updated version would also require the White House to lead the interagency National Critical Capabilities Committee instead of the Office of the U.S. Trade Representative. The NCCC would consider a range of factors when reviewing transactions, including the "long-term strategic economic, national security, health security, and crisis preparedness interests of the United States, the target country’s history of distortive or predatory trade practices, the ownership structure of the parties involved, and the impact to domestic industry resilience," according to a press release from lead sponsor Rep. Rosa DeLauro, D-Conn.
The bill, which is also sponsored by Rep. Brian Fitzpatrick, R-Pa., and Rep. Bill Pascrell, D-N.J., would allow the NCCC to "recommend mitigating or halting outbound investments outright should they pose a risk to national security." The legislation was endorsed by the endorsed by the American Federation of Labor and Congress of Industrial Organizations and United Steelworkers.
The bill comes as the White House considers establishing a new outbound investment screening program though an executive order (see 2305040068 and 2304270066). DeLauro said she is "encouraged by the Biden Administration’s ongoing work to take executive action on outbound investment, and I continue to believe that statutory provisions -- the NCCDA -- should buttress their efforts." The U.S. "must know of and be able to prevent the offshoring of supply chains so that the U.S. can better defend manufacturing capacity and protect jobs here at home."
Pascrell said the "watershed, bipartisan, legislation will take a major step to review investments in supply chains and critical industries being offshored to our adversaries."