What changed between these versions
A substantive modification. v3 primarily standardizes terminology by replacing "foreign adversary" and specific references to "China" or "Chinese Communist Party" with the broader, statutorily defined term "foreign country of concern" throughout the bill. Additionally, v3 removes a clause from the Sense of Congress stating that foreign direct investment policies should not disadvantage domestic investors or companies.
Overview
A handful of significant changes and numerous consistent terminology updates. · v3 clarifies and standardizes terminology, potentially broadening the scope of entities and countries subject to scrutiny, and slightly narrows the stated policy considerations.
The most significant change in v3 is the replacement of the term "foreign adversary" and specific references to "China" or "Chinese Communist Party" with the term "foreign country of concern," which is defined by reference to existing law. This change standardizes the language across the bill, potentially expanding the scope of countries and entities targeted by the bill's provisions. Additionally, v3 removes a clause from the Sense of Congress that emphasized not disadvantaging domestic investors or companies in foreign direct investment policies.
Major additions
This new provision defines "Foreign country of concern" by referencing section 9901 of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021. This definition was not present in v2, which instead defined a specific "Federal Interagency Investment Working Group" at this location.
This addition provides a specific, legally referenced term for countries whose investments are subject to particular scrutiny. Its significance lies in providing a consistent, broader legal framework for identifying problematic foreign investment sources, moving beyond the more general "foreign adversary" term used in v2.
Deletions
This provision defined the "Federal Interagency Investment Working Group" as established by Executive Order 13577 (75 Fed. Reg. 35715; relating to the establishment of the SelectUSA Initiative).
The deletion removes the specific reference to the "Federal Interagency Investment Working Group" and its Executive Order definition. While Section 4(a) and 4(e) in v3 still refer to "relevant interagency working groups," the explicit definition and specific group are no longer part of the bill's definitions, potentially allowing for broader or different interagency coordination.
This clause stated that policies regarding foreign direct investment "should reflect security interests and should not disadvantage domestic investors or companies."
The removal of this clause from the Sense of Congress means that v3 no longer explicitly states that foreign direct investment policies should avoid disadvantaging domestic investors or companies. This subtly shifts the stated policy priorities, potentially allowing for policies that prioritize security interests even if they might indirectly affect domestic entities.
Modifications
This modification standardizes the terminology for identifying problematic foreign entities. By linking to the definition of "foreign country of concern" (a newly added definition in v3), it potentially broadens or clarifies the scope of entities considered non-responsible, affecting which foreign investments are encouraged or scrutinized.
Before
Defined "responsible private sector entity" as one not organized under the laws of a "foreign adversary" and not owned, controlled, or otherwise subject to the influence of a "foreign adversary."
After
Defined "responsible private sector entity" as one not organized under the laws of a "foreign country of concern" and not owned by, controlled by, or otherwise subject to the influence of a "foreign country of concern."
This change removes the Secretary's discretion in determining what constitutes a "foreign adversary" for the purpose of defining a "trusted country" and instead ties it directly to the statutory definition of "foreign country of concern." This provides a more objective and potentially broader standard for identifying trusted countries.
Before
Defined "trusted country" as a country "that is not determined by the Secretary to be a foreign adversary of the United States."
After
Defined "trusted country" as a country "that is not a foreign country of concern."
This expands the scope of countries from which the United States seeks to reduce supply chain dependence, aligning with the broader terminology used throughout v3. This affects policy direction regarding supply chain resilience beyond just China.
Before
Stated a national priority to reduce the dependence of the United States on supply chains from "China."
After
Stated a national priority to reduce the dependence of the United States on supply chains from "foreign countries of concern."
This broadens the scope of entities whose foreign direct investment is considered a threat to U.S. security, aligning with the standardized terminology and potentially increasing scrutiny on investments from a wider range of state-directed economies.
Before
Stated that foreign direct investment by companies or other entities owned, directed, supported, or influenced by the "Chinese Communist Party" is a threat to the security of the United States.
After
Stated that foreign direct investment by companies or other entities owned, directed, supported, or influenced by a "foreign country of concern" is a threat to the security of the United States.
This change provides more flexibility in determining which interagency groups are consulted for the review, potentially allowing for a broader or more tailored set of experts to be involved, rather than being restricted to a single, specifically defined group.
Before
Required the Secretary and Comptroller General to conduct an interagency review in consultation with "the Federal Interagency Investment Working Group" and the heads of other relevant Federal departments and agencies.
After
Required the Secretary and Comptroller General to conduct an interagency review in consultation with "relevant interagency working groups" and the heads of other relevant Federal departments and agencies.
This broadens the scope of state-owned or state-backed enterprises whose investments pose unique challenges, extending the focus beyond the Chinese Communist Party to any "foreign country of concern."
Before
Included companies or other entities owned, directed, supported, or influenced by the "Chinese Communist Party" as posing unique challenges for foreign direct investment.
After
Included companies or other entities owned, directed, supported, or influenced by "foreign countries of concern" as posing unique challenges for foreign direct investment.
This expands the data collection and review requirements to cover investments from a broader range of state-directed economies, not just those influenced by the Chinese Communist Party.
Before
Required specific information on the prevalence of investments made by state-owned or state-backed enterprises, including those influenced by the "Chinese Communist Party."
After
Required specific information on the prevalence of investments made by state-owned or state-backed enterprises, including those influenced by "foreign countries of concern."
This clarifies and narrows the focus of the inquiry to specifically address state-directed investment originating from "foreign countries of concern," rather than state-directed investment generally.
Before
Asked how trusted countries are dealing with the challenge of State-directed and State-supported investment.
After
Asked how trusted countries are dealing with the challenge of state-directed and state-supported investment "from foreign countries of concern."
This modification clarifies that the best practices to be identified are specifically from other *trusted* countries, and for attracting investment from entities based in *other trusted* countries, reinforcing the bill's focus on secure and reliable investment sources.
Before
Referred to initiatives by "other countries" to identify best practices for increasing global competitiveness in attracting foreign direct investment from responsible private sector entities based in "trusted countries."
After
Referred to initiatives by "other trusted countries" to identify best practices for increasing global competitiveness in attracting foreign direct investment from responsible private sector entities based in "other trusted countries."
This emphasizes the particular concern regarding protectionist policies originating from "foreign countries of concern," directing the review to pay special attention to these specific sources of trade barriers.
Before
Discussed the impact that protectionist policies by other countries have on the advanced technology economy of the United States.
After
Discussed the impact that protectionist policies by other countries, "especially when those policies arise from foreign countries of concern," have on the advanced technology economy of the United States.
Similar to Section 4(a), this provides more flexibility in determining which interagency groups are involved in coordinating the report to Congress, allowing for a broader or more tailored set of experts.
Before
Required the Secretary to submit a report to Congress in coordination with "the Federal Interagency Investment Working Group and the heads of other relevant Federal departments and agencies."
After
Required the Secretary to submit a report to Congress in coordination with "relevant interagency working groups and the heads of relevant Federal departments and agencies."
Scope
Meaningful expansion or narrowing — Changes are scattered throughout the bill, primarily affecting definitions, the Sense of Congress, and the specific matters to be included in the foreign direct investment review. — v3 represents a refinement and clarification of policy direction, particularly by standardizing the focus on "foreign countries of concern" and slightly narrowing the stated considerations in the Sense of Congress. — The change in definitions, particularly the introduction of "foreign country of concern," interacts significantly with all provisions that previously referenced "foreign adversary," "China," or "Chinese Communist Party," ensuring consistent application of the new, broader standard.
Impact analysis
Foreign entities and countries previously categorized as "foreign adversaries" or specifically "China" or "Chinese Communist Party."
Increased scrutiny and potential for more restrictive policies or recommendations concerning investments from these entities.
These entities are now explicitly covered by the term "foreign country of concern," which is defined by reference to existing statute. This standardizes the criteria for scrutiny and potentially broadens the scope of countries and entities subject to the bill's provisions.
Domestic investors and companies.
Removes a stated protection or consideration for domestic entities, potentially allowing security interests to take precedence without explicit consideration of domestic disadvantage.
The explicit statement in the Sense of Congress (Section 3(4)) that foreign direct investment policies should not disadvantage domestic investors or companies has been removed.
Federal agencies involved in interagency coordination for the foreign direct investment review and report.
Increased flexibility in selecting interagency partners for the review and report, potentially allowing for broader or more tailored expertise.
The specific "Federal Interagency Investment Working Group" is replaced with "relevant interagency working groups" for consultation and coordination in Section 4(a) and 4(e).