The United States is taking significant steps to enhance oversight of real estate transactions involving foreign entities near military installations, citing heightened concerns over national security risks. The U.S. Department of the Treasury has proposed a new rule aimed at broadening the authority of the Committee on Foreign Investment in the United States (CFIUS) to review land sales near an additional 56 military sites, thereby expanding the total number of covered sites to 227 across the country.
This regulatory move builds upon legislation enacted in 2018, which empowered CFIUS to scrutinize transactions involving foreign investment near sensitive U.S. locations that could potentially pose threats to national security. Comprising representatives from critical federal departments such as State, Justice, Energy, and Commerce, CFIUS holds considerable sway in assessing whether foreign acquisitions of American companies or properties could compromise national security interests.
The initiative responds directly to mounting apprehensions about foreign influence and potential espionage risks associated with proximity to essential military infrastructure. Most notably, President Joe Biden underscored these concerns by issuing an executive order in May that blocked a Chinese-backed cryptocurrency mining firm from acquiring land near a strategically significant Wyoming nuclear missile base, citing profound implications for national security.
Treasury Secretary Janet Yellen has emphasized the Biden administration’s commitment to leveraging CFIUS as a robust safeguard against external threats to America’s military installations. She has highlighted that the proposed rule aims to reinforce investment screening measures, particularly focusing on protecting sensitive military sites from potential foreign interference.
The impetus for this regulatory expansion stemmed from past controversies, such as the proposal by the Fufeng Group in May 2023 to establish a $700 million wet corn milling plant in close proximity to the Grand Forks Air Force Base. This project ignited national security concerns and sparked discussions about the need to broaden CFIUS’s mandate to encompass not only corporate acquisitions but also land transactions involving foreign entities near defense facilities critical to air and space operations.
As part of the rulemaking process, the proposed expansion of CFIUS’s jurisdiction will undergo a comprehensive 30-day public comment period. This period invites stakeholders, industry experts, and the general public to provide feedback on the regulatory framework’s scope and potential implications. Such inclusive engagement aims to strike a balance between safeguarding national security imperatives and ensuring transparency in governance, thereby facilitating legitimate economic activities while mitigating risks posed by foreign investments.
Concurrently, the United States has pursued other measures to fortify protections for sensitive industries, including imposing tariffs on imports of electric vehicles, semiconductors, solar equipment, and medical supplies from China. These actions underscore a broader strategy to safeguard American technological and industrial leadership while addressing vulnerabilities posed by foreign investments and transactions near critical national security assets.
In summary, the proposed expansion of CFIUS’s oversight underscores the U.S. government’s proactive approach in safeguarding its military infrastructure from external threats. It reinforces the role of rigorous investment screening as a cornerstone of national security policy in an increasingly interconnected global economy, reflecting a commitment to preserving American sovereignty and strategic interests in the face of evolving geopolitical challenges.