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Defense Trade: Identifying Foreign Acquisitions Affecting National Security Can Be Improved

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Report Type Reports and Testimonies
Report Date June 29, 2000
Report No. NSIAD-00-144
Subject
Summary:

Congress passed legislation in 1988 that allows the President to suspend or prohibit foreign acquisitions, mergers, or takeovers of U.S. companies if there is credible evidence that a foreign controlling interest might threaten U.S. national security or if other legislation cannot adequately protect national security. The President delegated the authority to review foreign acquisitions of U.S. companies to an interagency group--the Committee on Foreign Investment in the United States--that is chaired by the Secretary of the Treasury and includes representatives from 11 federal agencies. In response to congressional concerns that the current process may fall short in identifying all foreign acquisitions of U.S. companies that could affect national security, this report reviews the process used by the Committee to identify foreign acquisitions of U.S. firms. GAO evaluates the current identification process used by the Committee and the effectiveness of the Committee's follow-up on acquisitions identified by its member agencies.

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