Controlling Foreign Investment in National Interest Sectors of the U.S. Economy
ID-77-18: Published: Oct 7, 1977. Publicly Released: Oct 7, 1977.
- Full Report:
Recent large increases in the amount of foreign investment in the United States have prompted congressional and public concerns that vital U.S. national economic interests might be endangered.
Reexamination of foreign investment policies and legislation indicate that no change in the traditional open door foreign investment policy is necessary. No two federal statutes governing foreign investment in national interest economic areas apply the same standards for defining foreign ownership or control, although most of them establish limits on the allowable amount of investment. The Department of Defense Industrial Security Program monitors foreign investment in U.S. firms working on classified contracts and requires the firms to submit certificates pertaining to foreign interests. These must be updated when the foreign investors change, but this regulation is laxly enforced. Federal Communications Commission regulations apply equally to domestic and foreign investors. At least 75 percent of the voting interests of U.S. air carrier corporations certified by the Civil Aeronautics Board must be U.S. owned, and presidents and the majority of the boards must be U.S. citizens. The Interstate Commerce Commission has no restrictions on foreign investors, and few limits are placed on the U.S. energy industries. Other federal agencies tend to apply their regulations equally to foreign and domestic investors.
Matter for Congressional Consideration
Comments: Please call 202/512-6100 for additional information.
Matter: The Director, Office of Management and Budget, and the independent regulatory and other agencies that monitor foreign investments should develop a plan to assess the reliability of the information being received and make it available in a uniform summary to the Congress. The Congress should require the Interstate Commerce Commission to report on the success of new disclosure regulations. If efforts to obtain additional information are unsuccessful, the Congress should clarify and expand the Commission's authority to determine sources of carrier control and the extent of foreign investment in the carriers it regulates.