US Senate votes to tighten foreign investment rules

Washington, July 27: The US Senate has voted to tighten rules for approving foreign takeovers of American companies, prompted by an uproar over the administration's backing of an Arab company's acquisition of the operations of several major US ports.

But a fight was brewing with the House of Representatives, which was expected to pass a different version of the legislation later on Wednesday.

The Senate bill, passed by voice vote and sponsored by Alabama Republican Richard Shelby, would require the US government to spend an extra 45 days examining deals with foreign state-owned companies for national security concerns.

This provision is included in the House version. But some House members oppose another part of the Senate bill that would require the executive branch to notify Congress of proposed US acquisitions by a foreign company before they are approved.

Typically, approvals of foreign acquisitions are granted within 30 days by the inter-agency Committee on Foreign Investments (CFIUS) in the United States, which is headed by the US Treasury Department, unless national security concerns are raised.

But CFIUS' decision earlier this year to approve the purchase of several major US port terminal operations by state-owned Dubai Ports World, without taking extra time to mull the security implications, caused an outcry in Congress and led to the push for changes in the law.

Following the political uproar, the Dubai company said it will sell the US port assets it acquired.

Reuters