By Diane Bartz
WASHINGTON (Reuters) - A bipartisan group of lawmakers in the U.S. Senate and House of Representatives introduced bills on Wednesday to toughen U.S. foreign investment rules amid growing concern about Chinese efforts to buy U.S. high-tech companies.
Senator John Cornyn, a member of the Republican leadership who is on the Senate Intelligence Committee, introduced a Senate bill to broaden the government's power to stop foreign purchases of U.S. firms by strengthening the Committee on Foreign Investment in the United States (CFIUS).
Representative Robert Pittenger, a North Carolina Republican, introduced an identical bill in the U.S. House of Representatives.
Both bills have Republican and Democratic co-sponsors.
"This bill focuses on providing CFIUS with updated tools to address present and future security needs," said Senator Dianne Feinstein, a California Democrat. "Senator Cornyn and I have been working on this bill for the last eight months, and we hope to build on the progress we’ve already made to update CFIUS and address national security threats."
In addition to Cornyn, of Texas, and Feinstein, cosponsors of the Senate bill include Republicans Marco Rubio of Florida, John Barrasso of Wyoming, James Lankford of Oklahoma and Tim Scott of South Carolina. Democratic co-sponsors are Amy Klobuchar of Minnesota, Gary Peters of Michigan and Joe Manchin of West Virginia.
"China is buying American companies at a breathtaking pace. While some are legitimate business investments, many others are part of a backdoor effort to compromise U.S. national security," said Pittenger in a press statement.
House co-sponsors include Republicans Devin Nunes of California, Chris Smith of New Jersey and Sam Johnson and John Culberson, both of whom are from Texas. House Democrats backing the bill are Denny Heck of Washington and Dave Loebsack from Iowa.
"That’s a pretty powerful collection of members, which makes me think it’s got a good shot (at becoming law)," said Seth Bloom, a former general counsel on a Senate Judiciary Committee subcommittee.
The bills would expand CFIUS' reach to allow it to review, and potentially reject, smaller investments and add new national security factors for CFIUS to consider. Those factors include whether information about Americans, such as Social Security numbers, would be exposed as part of the transaction or whether the deal would facilitate fraud.
The bills would also allow CFIUS to exempt certain transactions from review if the investors are from a country that is a treaty ally or has another security arrangement with the United States.
CFIUS already has a reputation for being tough on high-tech deals involving China in particular, and has blocked transactions that involve sophisticated semiconductors.
It has become more cautious since President Donald Trump was inaugurated amid growing political and economic tensions between the United States and China. Since the inauguration, the panel has balked at approving a broader range of deals from China, according to lawyers who specialize in representing proposed transactions to the board.