American style in Limiting Foreign Investment

American style in Limiting Foreign Investment

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The united States is a foreign direct investors the largest in the world and also the largest recipient of foreign direct investment (Foreign Direct Investment, FDI). But like every sovereign country, still trying to contain the penetration of the market open with the pretext of protection of the interests of national security. To achieve this balance means that by placing certain restrictions on foreign investment in strategic sectors sensitive for the U.S. economy.

The committee on Foreign Investment in the United States was established in 1975 to review the acquisition of U.S. companies by foreign entities that could erode national security. The political opposition recently with some of the activities of foreign investment high-profile, including the debate over asset-purchase plan by Dubai Ports World in 2006, has given persepsiAS retreat from the policy of the open door. The federal government handles only hundreds of foreign acquisitions annual, and termination transaction of a kind that is rare. In a record deal, the Committee approved the sale of Smithfield Foods to Shuanghui International Holdings Ltd. in September 2013, the largest purchase in the history of the Chinese companies in the US.

Washington has traditionally led international efforts to lower the barriers to capital flows cross-border, with the aim of expanding investment opportunities for US multinationals and encourage a more stable international system efficient. At the same time, the U.S. depends heavily on foreign inflows to compensate for the lack of domestic savings. AS for rutinmenjadi the most favorable for foreign direct investors. Foreign direct investment is ownership or control by a foreign entity of 10 percent or more of the d domestic companies play the role of a simple but push the U.S. economy.

According to the Ministry of Commerce, foreign companies in the U.S. run of 30 thousand businesses in in 2010, employs almost 6 million people (about 4 percent of the civilian labor force), and pay the average salary is higher than domestic competitors. In addition, foreign companies are disproportionately involved in manufacturing more than 2 times the ratio of the total economy of the U.s. and they often give the job with skills training high which raised the local economy. In 2010, Pacific Century Motors, a Chinese-owned membelidivisi automotive Nexteer, save thousands of jobs in Saginaw, Michigan. "The city is transformed into an exhibition of the decline of American industry for a case study in the impact of money Chinese investment in U.S. society," said the Wall Street Journal. Indeed, many states and cities aggressively pursuing foreign direct investment.

Kekhawatiranterhadap foreign transaction typically associated with mergers, acquisitions, and takeovers of domestic companies, called greenfield investment. U.S. lawmakers, has issued a law that limit or prevent foreign transactions may cause the loss of sensitive technologies, outsourcing work, or damage a variety of strategic sectors. In recent years, many countries have been reviewing the legislation merekakarena kekhawatiranterhadap international terrorism and global investment by state-owned foreign with respect to the issue of transparency and accountability.

But many economists warn that the application of any burdensome restrictions on the inflow of FDI could trigger restrictive policies by other countries. To avoid this, the 34 member countries of the Organization for Economic Cooperation and Development (OECD), as well as 10 nonmember state, have signed binding commitments to facilitate supayaperusahaan controlled by foreigners in their territories no less favorably than domestic companies. Government based on this agreement provides ample opportunities liberate the economic sectors considered important to national security. In various countries, the so-called strategic sectors are defined in a diverse manner.

MantanDirektur Congressional Budget Douglas Holtz-Eakin say concerns about security is a valid reason, but foreign companies, state-owned or private, should be free to get money from the strategic sector as long as they do not have operational control directly. "The problem of dealing with ownership and management," he said.Expert International investment, Alan P. Larson and David M. Marchick, agree that state ownership in multinational companies very often software. However, they noted that concerns arise "when the decision of foreign companies to be an extension of the policy decisions of the government rather than the commercial interests of the company." Experts it cites the move by raksasi Russian energy, Gazprom, who cut gas supplies to Ukraine in 2006, which some Western observers considered the decision as a politically motivated.

Supervision federalterhadap foreign investment has been growing from time to time in order in response to changes in economic conditions and security. The administration of Gerald Ford (1974-1977) formed the Committee on Foreign Investment in the United States in 1975 in the midst of anxiety Kongresatas increasing investment in OPEC countries in the U.S., which for many policy makers see is considered suspicious.Committee for coordinating U.S. policy on foreign investment and review transactions that can have significant consequences for U.S. interests.

However, in subsequent years, a lot of people in Washington feel that Committee failed to fulfill its obligation. In 1988, Congress supports the Committee by reviewing the authority of the Exon-Floriodengan change the LAW on the Defense Production 1950.As in the previous decade, the reform stems from concerns with the growth of foreign investment, this time make the Japanese as a target, sensitive U.S. industry, including the offer of computer giant Fujitsu to buy the company makers of computer chips Fairchild Semiconductor.

Initially, the Exon-Florio granted the authority by the President widely to block a foreign acquisition with the reason of "national security" and the authority is regarded as the decision of the executive that does not require approval of the legislature and cannot be questioned legally. The Reagan administration, in turn, delegate powers to manage the Exon-Florio to the Committee on Trustees of Foreign Investment.

The Supervisory committee of Foreign Investment thus the change of administration with limited authority to examine and analyze the data of foreign investment into the agency with a broad mandate and significant authority to give consideration to the President in connection with the issue of foreign investment deals and can provide recommendations to cancel the transaction, "explained Congress Research Service.In February 1990, President George H. W. Bush used this authority to cancel the sale of MAMCO Manufacturing, a maker of aircraft parts in Seattle to sebuahBUMN China airlines.

Institutional oversight Committee of Foreign Investment amended by the LAW on Foreign Investment and National Security 2007 which was passed after the case of Dubai Ports World. In March 2006, in the midst of the political opposition of the U.S., a Dubai company bid to acquire control of port operations the main US. The congress said that the controversial deal that would increase the risk of terrorist attacks in the United States. On the other hand, George W. Bush and the Supervisory Committee of Foreign Investment sebelumnyasudah give approval for such transactions.

The provisions of the ACT of 2007 provide Kongreskewenangan great for conducting oversight of the Supervisory Committee of Foreign Investment and provide a broader definition of the meaning of national security (which has been defined in the USA Patriot Act 2001) by inserting the critical infrastructure in the scope of the understanding of it. The provisions of the ACT provide the mandate to the Committee of Trustees to investigate all the offers of foreign investment by companies owned or controlled by a foreign power, regardless of the nature of the company. According to some experts, this provision shifts the burden of proof of CFIUS to foreign companies to show that they do not represent a security risk.

The Supervisory committee of Foreign Investment based and responsible to the President. This committee is chaired by the Minister of Finance with a membership composition that includes the minister-the minister of the cabinet, namely the Attorney general, homeland Security, Commerce, Defense, foreign Affairs, and Energy as well as the Head Office of the Trade Representative and the Director of the Institute of Science and Technology. Other agencies are also involved in the composition of the Supervisory Committee such as the Office of Management and Budget (a unit of work of the Presidency responsible for administration and finance the White house), the Council of Economic Advisers, the National Security Council, National Economic Council, and the Council Security In the Country. In addition, the Director of the National Intelligence Agency danMenteri Labor because term become a member of the Committee but not have a voice in making decisions.

Ahlihukum said the work of the committee is intellectual work and is very meticulous. "This is a thorough physical examination which controlled the doctor to any of its parts," said David Fagan, partner of the law Office of Attorney Covington and Burling in Washington, DC commenting on the work of the Supervisory Committee. HanyaPresiden who has the authority to cancel the transaction, but only if it meets the requirements: the President should have "strong evidence" that the deal would interfere with national security and must determine that the device is legal there is not enough to maintain national security.

The object of the authority of the Committee is the review of secrets of a merger, acquisition, or takeover which results in "foreign control in interstate commerce in the United States." Transaction not be the object of supervision adalahtransaksi done "solely for the purpose of investment" or in which foreign investors "no intention of determining or directing business decisions."

The Supervisory committee has cancelled 10 percent of all transactions involving foreign companies that acquire U.S. companies throughout 2008-2011. That is, almost 90 persentransaksi done in time that is not considered problematic and no yangdibatalkan by the president. However, most perusahaansecara unilaterally withdraw from a transaction if the transaction is to be controversial rather than having to wait for the decision of the Supervisory Committee or an official ban from the White house. In February 2011, telecommunications giant Huawei voluntarily divested its assets in 3Leaf, a U.S. technology companies, while kissing a ban from President Obama. Other companies have made the same decision in the last few years.

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