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Overview
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 This
topic page archives superseded materials
- Section 721 - Pre-FINSA
has the text of the Exon-Florio amendment prior to its amendment of FINSA in
2007
- Commentary has older materials including GAO
reports and law firm client mailings
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Section 721 - Pre-FINSA
| Statute text |
 (a)
Investigations
- The President or the Presidents designee may make an investigation to
determine the effects on national security of mergers, acquisitions, and
takeovers proposed or pending on or after the date of enactment of this section
[Aug. 23, 1988] by or with foreign persons which could result in foreign control
of persons engaged in interstate commerce in the United States. If it is
determined that an investigation should be undertaken, it shall commence no
later than 30 days after receipt by the President or the Presidents designee of
written notification of the proposed or pending merger, acquisition, or takeover
as prescribed by regulations promulgated pursuant to this section. Such
investigation shall be completed no later than 45 days after such determination.
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(b)
Mandatory investigations-
The President or the Presidents designee shall make an investigation, as
described in subsection (a), in any instance in which an entity controlled
by or acting on behalf of a foreign government seeks to engage in any
merger, acquisition, or takeover which could result in control of a person
engaged in interstate commerce in the United States that could affect the
national security of the United States. Such investigation shall
(1) commence not later than 30 days after receipt by the President or the
Presidents designee of written notification of the proposed or pending
merger, acquisition, or takeover, as prescribed by regulations promulgated
pursuant to this section; and
(2) shall be completed not later than 45 days after its commencement.
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(c)
Confidentiality of information
- Any information or documentary material filed with the President or the
Presidents designee pursuant to this section shall be exempt from disclosure
under section 552 of title 5, United States Code, and no such information or
documentary material may be made public, except as may be relevant to any
administrative or judicial action or proceeding. Nothing in this subsection
shall be construed to prevent disclosure to either House of Congress or to any
duly authorized committee or subcommittee of the Congress.
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(d)
Action by the President
- Subject to subsection (d),[1] the President may take such action
for such time as the President considers appropriate to suspend or prohibit any
acquisition, merger, or takeover, of a person engaged in interstate commerce in
the United States proposed or pending on or after the date of enactment of this
section [Aug. 23, 1988] by or with foreign persons so that such control will not
threaten to impair the national security. The President shall announce the
decision to take action pursuant to this subsection not later than 15 days after
the investigation described in subsection (a) is completed. The President may
direct the Attorney General to seek appropriate relief, including divestment
relief, in the district courts of the United States in order to implement and
enforce this section.
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(e)
Findings of the President
- The President may exercise the authority conferred by subsection (c)
[1] only if the President finds that
(1) there is credible evidence that leads the President to believe that the
foreign interest exercising control might take action that threatens to impair
the national security, and
(2) provisions of law, other than this section and the International Emergency
Economic Powers Act (50 U.S.C. 17011706), do not in the Presidents judgment
provide adequate and appropriate authority for the President to protect the
national security in the matter before the President.
The provisions of subsection (d) [1] of this section shall not be
subject to judicial review. |
(f)
Factors to be considered
- For purposes of this section, the President or the Presidents designee may,
taking into account the requirements of national security, consider among other
factors
(1) domestic production needed for projected national defense requirements,
(2) the capability and capacity of domestic industries to meet national defense
requirements, including the availability of human resources, products,
technology, materials, and other supplies and services,
(3) the control of domestic industries and commercial activity by foreign
citizens as it affects the capability and capacity of the United States to meet
the requirements of national security,
(4) the potential effects of the proposed or pending transaction on sales of
military goods, equipment, or technology to any country
(A) identified by the Secretary of State
(i) under section 6(j) of the Export Administration Act of 1979 [section 2405
(j) of this Appendix], as a country that supports terrorism;
(ii) under section 6(l) of the Export Administration Act of 1979 [section 2405
(l) of this Appendix], as a country of concern regarding missile proliferation;
or
(iii) under section 6(m) of the Export Administration Act of 1979 [section 2405
(m) of this Appendix], as a country of concern regarding the proliferation of
chemical and biological weapons; or
(B) listed under section 309(c) of the Nuclear Non-Proliferation Act of 1978 [42
U.S.C. 2139a (c)] on the "Nuclear Non-Proliferation-Special Country List" (15
C.F.R. Part 778, Supplement No. 4) or any successor list; and
(5) the potential effects of the proposed or pending transaction on United
States international technological leadership in areas affecting United States
national security |
(g)
Report to the Congress
- The President shall immediately transmit to the Secretary of the Senate and
the Clerk of the House of Representatives a written report of the Presidents
determination of whether or not to take action under subsection (d), including a
detailed explanation of the findings made under subsection (e) and the factors
considered under subsection (f). Such report shall be consistent with the
requirements of subsection (c) of this Act.[2]
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(h)
Regulations
- The President shall direct the issuance of regulations to carry out this
section. Such regulations shall, to the extent possible, minimize paperwork
burdens and shall to the extent possible coordinate reporting requirements under
this section with reporting requirements under any other provision of Federal
law.
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(i)
Effect on other law
- Nothing in this section shall be construed to alter or affect any existing
power, process, regulation, investigation, enforcement measure, or review
provided by any other provision of law.
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(j)
Technology risk assessments
- In any case in which an assessment of the risk of diversion of defense
critical technology is performed by a designee of the President, a copy of such
assessment shall be provided to any other designee of the President responsible
for reviewing or investigating a merger, acquisition, or takeover under this
section.
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(k)
Quadrennial report
- (1) In general
In order to assist the Congress in its oversight responsibilities with respect
to this section, the President and such agencies as the President shall
designate shall complete and furnish to the Congress, not later than 1 year
after the date of enactment of this section [3] and upon the expiration of every
4 years thereafter, a report which
(A) evaluates whether there is credible evidence of a coordinated strategy by 1
or more countries or companies to acquire United States companies involved in
research, development, or production of critical technologies for which the
United States is a leading producer; and
(B) evaluates whether there are industrial espionage activities directed or
directly assisted by foreign governments against private United States companies
aimed at obtaining commercial secrets related to critical technologies.
- (2) "Critical technologies" defined
For the purposes of this subsection, the term critical technologies means
technologies identified under title VI of the National Science and Technology
Policy, Organization, and Priorities Act of 1976 [3] or other critical
technology, critical components, or critical technology items essential to
national defense identified pursuant to this section.
- (3) Release of unclassified study
The report required by this subsection may be classified. An unclassified
version of the report shall be made available to the public. |
| Notes SEC_CODE_REF_0090001192884
- [1] See References in Text note below.
- [2] So in original. Probably should be "section."
- [3] See References in Text note below.
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Byrd Amendment
SEC. 837. DEFENSE PRODUCTION ACT AMENDMENTS
Source: Library of Congress |
(a)Investigations Of Certain Mergers, Acquisitions, And Takeovers
- Section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 2170) is
amended --
(1) by redesignating subsections (b) through (h) as subsections (c) through (i),
respectively; and
(2) by inserting after subsection (a) the following new subsection:
'(b) MANDATORY INVESTIGATIONS- The President or the President's designee shall
make an investigation, as described in subsection (a), in any instance in which
an entity controlled by or acting on behalf of a foreign government seeks to
engage in any merger, acquisition, or takeover which could result in control of
a person engaged in interstate commerce in the United States that could affect
the national security of the United States. Such investigation shall--
`(1) commence not later than 30 days after receipt by the President or the
President's designee of written notification of the proposed or pending merger,
acquisition, or takeover, as prescribed by regulations promulgated pursuant to
this section; and
`(2) shall be completed not later than 45 days after its commencement.'.
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(b)
Considerations Of The President-
Section 721(f) of the Defense Production Act of 1950 (50 U.S.C. App.
2170(f)) (as redesignated by subsection (a)) is amended --
(1) in paragraph (2), by striking `and' at the end;
(2) in paragraph (3), by striking the period and inserting a comma; and
(3) by adding at the end the following new paragraphs:
`(4) the potential effects of the proposed or pending transaction on sales
of military goods, equipment, or technology to any country--
`(A) identified by the Secretary of State--
`(i) under section 6(j) of the Export Administration Act of 1979, as a
country that supports terrorism;
`(ii) under section 6(l) of the Export Administration Act of 1979, as a
country of concern regarding missile proliferation; or
`(iii) under section 6(m) of the Export Administration Act of 1979, as a
country of concern regarding the proliferation of chemical and biological
weapons; or
`(B) listed under section 309(c) of the Nuclear Non-Proliferation Act of
1978 on the `Nuclear Non-Proliferation-Special Country List' (15 C.F.R. Part
778, Supplement No. 4) or any successor list; and
`(5) the potential effects of the proposed or pending transaction on United
States international technological leadership in areas affecting United
States national security.'.
(1) commence not later than 30 days after receipt by the President or the
Presidents designee of written notification of the proposed or pending
merger, acquisition, or takeover, as prescribed by regulations promulgated
pursuant to this section; and
(2) shall be completed not later than 45 days after its commencement.
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(c)
Report
- Section 721(g) of the Defense Production Act of 1950 (50 U.S.C. App.
2170(f)) (as redesignated by subsection (a)) is amended to read as follows:
`(g) REPORT TO THE CONGRESS- The President shall immediately transmit to the
Secretary of the Senate and the Clerk of the House of Representatives a written
report of the President's determination of whether or not to take action under
subsection (d), including a detailed explanation of the findings made under
subsection (e) and the factors considered under subsection (f). Such report
shall be consistent with the requirements of subsection (c) of this Act.'.
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(d) Sense Of The Congress Regarding The Committee On Foreign Investment In The United States-
- It is the sense of the Congress that the President should include in the
membership of the Committee on Foreign Investment in the United States
(established by Executive Order No. 11858)--
(1) the Director of the Office of Science and Technology Policy; and
(2) the Assistant to the President for National Security.
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(e)
Technology Risk Assessments
- Section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 2170) is
further amended by adding at the end the following new subsection:
`(j) TECHNOLOGY RISK ASSESSMENTS- In any case in which an assessment of the risk
of diversion of defense critical technology is performed by a designee of the
President, a copy of such assessment shall be provided to any other designee of
the President responsible for reviewing or investigating a merger, acquisition,
or takeover under this section.'. |
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