The Treasury Department is restricting investments in U.S. companies in an effort meant to protect critical technology, data and infrastructure from foreign sabotage.
A Treasury panel will ban foreign investors and businesses from acquiring stakes in U.S. firms involved in industries deemed essential to national security, the department announced on Monday. The regulations were issued under a 2018 law that drastically expanded the power of a Treasury panel, called the Committee on Foreign Investment in the U.S. (CFIUS).
The committee was created in 1975 to block foreign acquisitions of U.S. companies that put the country at a competitive disadvantage to international rivals or threaten national security. The panel is chaired by the Treasury secretary and has been central to President Trump’s battle against China’s push to dominate global technology.
“These regulations strengthen our national security and modernize the investment review process,” said Treasury Secretary Steven Mnuchin.
“They also maintain our nation’s open investment policy by encouraging investment in American businesses and workers, and by providing clarity and certainty regarding the types of transactions that are covered.”
CFIUS was initially only empowered to block foreign takeovers of U.S. firms. But a bipartisan bill signed by Trump in 2018 expanded the panel’s authority to block deals even if they don’t give foreign investors control of an American company.
Under the new regulations, the committee can block foreign investors from acquiring a stake in certain U.S. companies if the investor would be involved in the firm’s board of directors or have access to nonpublic information.
Companies covered under the new regulations include U.S. computer technology firms; telecommunications, utilities, energy and transportation companies; and firms that use a wide range of personal financial and biographical data.