The Committee on Foreign Investment in the U.S. is chaired by the Treasury Department, which prepared Thursday’s report.
Photo: Andrew Harrer/Bloomberg NewsA national-security panel in 2019 increased its review of business deals involving foreign money, the first year after Congress ordered it to scrutinize such transactions more thoroughly, according to a new report released Thursday.
The Committee on Foreign Investment in the U.S. reviewed 325 business transactions that involved foreign money, topping the number of deals the panel has reviewed each year since 2010, according to its annual report to Congress. By comparison, in 2018 the panel reviewed 249 transactions.
The national-security review panel has taken a higher profile in recent years on heightened concerns that China has been trying to acquire U.S. technology. Its work has been in the spotlight recently for its investigation into popular Chinese video-sharing app TikTok.
Cfius, which is part of the Treasury Department, reviewed in 2019 231 deals submitted as notices and 94 deals submitted through its mandatory declaration process, which expanded the panel’s oversight in late 2018. The report didn’t identify the investors or other parties behind the evaluated deals.
The report offered a glimpse into how the panel handled the first full year of transaction reviews after a 2018 law ordered it to take a closer look at foreign investment in the U.S. corporate world.
The work of Cfius has been in the spotlight recently for its investigation into popular Chinese video-sharing app TikTok, owned by Beijing-based ByteDance.
Photo: greg baker/Agence France-Presse/Getty ImagesThat year Congress expanded the scope of national security reviews of foreign investment deals, including those involving satellites, oil refineries, financial-market systems and drinking-water utilities. Under the law, several categories of deals, including ones related to Americans’ privacy, require mandatory disclosure to federal regulators through a new process that supplemented its traditional intake of notice-based reviews.
Before the new law, investors disclosed their deals voluntarily. Doing so could enable investors to avoid scrutiny later, under federal law.
Treasury Secretary Steven Mnuchin said Wednesday that the panel’s review of TikTok would wrap up this week. U.S. officials say they are concerned that TikTok, owned by Beijing-based ByteDance Ltd., could pass on to China’s government data it collects from Americans streaming videos. TikTok said it would not do so.
If the panel can’t agree on whether a 2018 acquisition related to TikTok poses a security threat, it can ask President Trump to decide. The president has the authority to declare that the transaction poses a threat.
Such deferrals are rare. In each of the last four years, only one transaction was referred to the president for a decision. All four have been denied. President Obama blocked a Chinese company’s bid for the U.S.-based businesses of German semiconductor maker Aixtron SE. And Mr. Trump blocked two deals: another Chinese company’s bid for Lattice Semiconductor Corp. and Broadcom Ltd. ’s $117 billion bid for Qualcomm Inc., which also are semiconductor industry players.
Last year, the panel referred to Mr. Trump the details about a Chinese company’s 2018 purchase of StayNTouch Inc., a hotel-property management-software firm. In March, he ordered hospitality tech company Beijing Shiji Information Technology Co. to sell its ownership, saying he had “credible evidence” it “threatens to impair the national security of the United States.”
Cfius is chaired by the Treasury Department, which prepared Thursday’s report, but also includes representation from the departments of State, Defense, Justice, Commerce, Homeland Security and the U.S. Trade Representative’s office.
Write to Katy Stech Ferek at katherine.stech@wsj.com
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