Critique of Treasury Report on Major Industrial Country Restrictions
NSIAD-89-234: Published: Sep 21, 1989. Publicly Released: Sep 21, 1989.
- Full Report:
Pursuant to a congressional request, GAO: (1) reviewed a Department of the Treasury survey of the Group of Seven (G-7) countries' laws and regulations governing foreign direct investment; and (2) compared the provisions of S. 289, proposed legislation for detailed reporting by foreign investors, to the G-7 countries' reporting and disclosure requirements.
GAO found that the Treasury report: (1) accurately described the laws and regulations that the G-7 countries used to govern foreign direct investment inflows; (2) provided background information relating to pending legislation for formal U.S. requirements governing foreign direct investments in the United States; (3) did not attempt to catalog cultural or institutional impediments to foreign direct investments or include discussions of trade-related investment measures; and (4) did not have the specific data elements that foreign governments required as part of their formal investment processes to provide a basis for comparison to the proposed legislation. GAO also found that: (1) although Japan, Canada, and France recently liberalized their formal requirements, institutional and cultural impediments faced U.S. investors; (2) the proposed legislation would provide detailed reporting by foreign investors, including establishment of a registry for foreign direct investment and access to data for authorized officials; (3) West Germany, Italy, and Canada had no registries, while France maintained a registry, but kept it closely within its government; (4) Canada monitored investments and published a list of foreign direct investments, but did not include financial or sensitive information; and (5) Japan monitored foreign direct investments, made limited information available on individual transactions unless the parties involved requested confidentiality, and included foreign corporations in a publicly available list.