Business Roundtable Calls for Balanced and Constructive CFIUS Reform

Castellani Cites Need to Enhance National Security While Protecting Substantial Economic Benefits of Foreign Investment in the United States

Washington, D.C. - In testimony today before the House Committee on Energy and Commerce, Business Roundtable President John J. Castellani called for approval of measures to enhance national security through reform of the CFIUS process. CFIUS, the Committee on Foreign Investment in the United States, is responsible for vetting proposed foreign investments to ensure they do not compromise U.S. national security interests. Castellani expressed support for H.R. 5337, the "National Security Foreign Investment Reform and Strengthened Transparency Act of 2006," as meeting both security and economic needs, and urged the full House to approve the measure.

"Protecting national security and promoting foreign investment are not incompatible goals," said Castellani in his testimony. "Proposals to reform the CFIUS process need to be balanced and constructive so that they do not place unnecessary, damaging and counterproductive restrictions on foreign investment."

Foreign investment in the United States is essential to the continued vitality of the American economy. In 2004, foreign investors invested more than $115 billion in the United States, providing U.S. companies and workers with important capital for expansion of U.S. production facilities, increased R&D spending, and other investments to help grow the U.S. economy.

"If foreign companies were to spend less in America as a result of perceptions that the United States no longer welcomes foreign investment, reduced investment would harm U.S. economic growth, choke innovation, and undermine our overall economic competitiveness," Castellani continued.

Citing the importance of foreign investment to continued U.S. economic growth, Castellani outlined three central principles Business Roundtable members believe must be followed if meaningful and effective CFIUS reform legislation is to be enacted:

1. National security should continue to be the principal focus of the foreign investment review process.

2. The review process should continue to be objective and fair, and non-political; it should not create obstacles to investment that put a damper on legitimate business activities.

3. Maintaining an open, fair and non-discriminatory environment for legitimate foreign investment is important to the U.S. national interest.

"Real threats to U.S. national security must be tackled with purpose and resolve - no business deal is worth jeopardizing the safety of the American people," concluded Castellani. "But at the same time, challenges to U.S. economic success must be met with a similar commitment to global leadership and engagement."

Click here () to view Mr. Castellani’s testimony

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Business Roundtable (www.businessroundtable.org) is an association of chief executive officers of leading U.S. companies with over $4.5 trillion in annual revenues and more than 10 million employees. Member companies comprise nearly a third of the total value of the U.S. stock market and represent nearly a third of all corporate income taxes paid to the federal government. Collectively, they returned more than $110 billion in dividends to shareholders and the economy in 2005.

Roundtable companies give more than $7 billion a year in combined charitable contributions, representing nearly 60 percent of total corporate giving. They are technology innovation leaders, with $86 billion in annual research and development spending - nearly half of the total private R&D spending in the U.S.

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