Senate Panel Wants to Know About Role of CFIUS in Bankruptcy Cases
The Senate Appropriations Committee is concerned that Chinese Communist Party-backed companies may be “exploiting” the U.S. bankruptcy process to obtain American companies’ sensitive and proprietary information, the panel wrote in a new report accompanying its version of the FY 2025 Financial Services and General Government Appropriations Act.
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The report calls on the Treasury Department to provide more information about the role of the Committee on Foreign Investment in the U.S. in bankruptcy proceedings, including which proposed transactions were in the bankruptcy process while CFIUS was reviewing them. That information should be included in the annual report produced by CFIUS "with a classified annex as necessary," the Senate panel said.
The Appropriations Committee also said it’s concerned that foreign entities with ties to the Chinese government may be able to access Americans’ genomic data. It encourages CFIUS to continue consulting with the Department of Health and Human Services about proposed foreign investment transactions involving U.S. companies that collect or maintain genetic test information on American citizens.
In other matters, the Appropriations Committee is encouraging Treasury to maintain “strong enforcement” of the price cap on Russian oil (see 2212050014), including through sanctions and collaboration with other federal agencies and foreign allies. The committee also wants Treasury to continue monitoring the use of cryptocurrency to evade sanctions, and report on any significant changes in how cryptocurrency facilitates illicit activity, "including any increased use of cryptocurrency by illicit actors to purchase goods." It says that when Treasury decides where to locate its financial attaches, it should keep in mind which countries play a significant role in violating the oil price cap and evading sanctions.
The committee also said it’s concerned about the “lack” of sanctions against Hong Kong officials under the Hong Kong Autonomy Act and the Hong Kong Human Rights and Democracy Act. It asks Treasury to provide an explanation. The leaders of the House Select Committee on China and the Congressional-Executive Commission on China recently urged the Biden administration to sanction 28 Hong Kong government officials for efforts to dismantle the Chinese territory's autonomy and stifle political dissent (see 2407180019).
The Appropriations Committee would provide the Biden administration’s request of $215.7 million for the Financial Crimes Enforcement Network, up $25.5 million from the FY 2024 enacted level. The committee’s report welcomes FinCEN’s proposed rule to subject investment advisers to the Bank Secrecy Act (see 2402130054) and encourages FinCEN to finalize the rule “as soon as practicable.” The report makes similar comments about FinCEN’s notice of proposed rulemaking on anti-money laundering regulations for residential real estate transfers, and about FinCEN’s plans to develop anti-money laundering rules for commercial real estate.