As prepared for delivery.
Thank you for the introduction, Andrew, and good afternoon to everyone. It is a pleasure to be with you today to discuss the work we are doing at Treasury and across the U.S. Government on the topic of investment security.
My experience with CFIUS dates back to 2019, when I was at Treasury as the Assistant Secretary for Economic Policy. I advised Secretary Mnuchin on a wide range of domestic and international matters that impacted the economy. I saw the extensive work undertaken to strengthen and modernize the CFIUS process following the enactment of FIRRMA, and I was struck then, as I am today, by the critical role that CFIUS plays at the intersection of foreign investment and national security. In talking with my two immediate predecessors, they both remarked on the fascinating work done by the CFIUS team.
This year marks the 50th anniversary since CFIUS was established. A lot has changed since 1975 when President Ford issued the Executive Order that created CFIUS. Foreign direct investment into the United States has increased, our economy is more connected to countries around the world, transaction structures are more complicated, businesses collect more data, and the private sector is leading a lot of technology development. As the investment landscape has shifted, CFIUS has evolved along with it to meet the changing national security risks.
One of the guiding principles that has been true throughout the Committee’s history is that CFIUS is committed to protecting national security while preserving the longstanding open investment policy of the United States. That remains as true today as ever.
Everyone here knows that the United States is an attractive destination for investment. We want to continue to grow foreign investment into the United States. And we are committed to maintaining the strong, open investment environment that benefits our economy, while enhancing our ability to protect the United States from new and evolving threats that can accompany foreign investment.
The work of the Committee, and that all of you do as our partners in the legal and investment communities and in industry, is essential to strengthening the attractiveness of the United States as a destination for foreign investment while ensuring we protect our national security.
During President Trump’s first administration, we worked with Congress to enact the Foreign Investment Risk Review Modernization Act, or FIRRMA, which was one of the most significant reforms of CFIUS’s authority and process since the establishment of the Committee.
Thanks to FIRRMA, the Committee was able to enhance its workforce and capabilities across the board, allowing it to better carry out its mission of protecting U.S. national security while moving transactions efficiently through the review process.
We are now building on this progress and ensuring CFIUS remains ready and able to meet the national security risks presented by the modern investment environment.
On February 21, the President issued the “America First Investment Policy” laying out his vision for our investment policy priorities. The Policy underscores that America is committed to maintaining the strong, open investment environment that benefits our economy and our people, while enhancing our ability to protect the United States from the new and evolving threats that can accompany foreign investment.
There are a few strategies we will use to pursue this goal:
First, as I’ve already mentioned, we will make the United States a great destination for foreign investment. Benign investment from allies and partners benefits the U.S. economy by creating jobs and opportunity for Americans. And passive investment from all foreign persons enables the flow of capital into U.S. businesses without creating the kind of national security risks that CFIUS was designed to address. When investors associated with our adversaries seek to invest in the United States, we must carefully scrutinize the investments and ensure they do not give rise to national security risk to the United States.
Second, we will continue to reduce uncertainty and unnecessary regulatory burdens for investors. We are carrying this out through several lines of effort.
One line of effort is focused on the “fast-track” process that the Policy instructs CFIUS to establish to facilitate greater investment in U.S. businesses from ally and partner sources. While our work on this is still in the early stages, one of the things we are thinking about is how to more efficiently get the Committee the information needed to conduct risk-based assessments so as to more expediently review transactions.
One approach is to collect information from foreign investors earlier in the process. We are thinking about how we could work with transaction parties to build up a knowledge base that limits the amount of information that needs to be resubmitted with each new filing, which could be a particularly useful tool for repeat filers. Additionally, we are looking at ways we can share more information with the public about the types of risks that arise in certain transactions, as well as best practices parties can use to limit these risks prior to CFIUS review.
A key point here is that distance and independence from foreign adversaries—and being able to verify this—is a core component of CFIUS’s risk analysis with respect to a foreign investor. While we will facilitate beneficial investment, we will make sure that these process efficiencies do not diminish CFIUS’ ability to identify and address national security risks arising from covered transactions. And we will continue to hold responsible those companies that violate their obligations through our strengthened enforcement regime.
Another line of effort aimed at reducing unnecessary regulatory burdens is to appropriately streamline CFIUS mitigation to make sure that we are not using mitigation measures that are overly bureaucratic, complex, and open-ended. When CFIUS clears a transaction, it must ensure that there are no unresolved national security concerns, so any national security risks arising from the transaction must be adequately mitigated. However, we think there are ways to reduce the use of certain open-ended mitigation measures by instead considering alternate approaches to address a particular risk. And there is more that the Committee can do to provide general information about how national security risks can arise and be addressed preemptively, which may help parties be better prepared to consider mitigation measures in the deal-making process.
These kinds of smart enhancements to our process will better position us to evaluate and address investments quickly, facilitating greater investment from specified allied and partner sources, while adhering to our statutory mandate to consider each transaction on its own merits.
Ultimately, by addressing the national security risks posed by foreign investment and working in tandem to facilitate investment from allies and partners, we will ensure that the United States remains the world’s best destination for investment.
I want to take a moment now to discuss another important aspect of our work, one that enhances the policies and priorities of the American First Investment Policy and is central to our broader mission to enhance foreign investment while protecting national security—that is, the work we do with allies and partners.
Collaborating on these issues across jurisdictions makes us all more effective and helps prevent adversaries from creating risks abroad after we stop them at home. We are engaging with countries across the globe and urging them to implement strong regimes to address national security risks. As we evolve and strengthen our own system, we need to make sure allies and partners are not becoming vectors—even unwittingly—for the risks we are working to keep out of the United States.
Strong regimes and “good hygiene” from allies and partners will facilitate more investment into the United States by allowing us to welcome more of their investments more easily. We are encouraged by the discussions on these issues so far, and we look forward to seeing our allies and partners make more progress in ensuring their tools are being fully resourced and deployed.
Finally, I want to discuss another investment security program that Treasury is leading to protect U.S. national security, and that is our Outbound Investment Security Program. The Outbound Program is distinct from CFIUS in many respects but one thing is consistent: it is critical for investors to know their investments, the counterparties, and the purpose. Under the Outbound Program, we want American businesses to thrive while ensuring that they, too, put America First and do not undermine U.S. national security interests.
The Outbound Program is an important new tool in our effort to restrict foreign adversaries from exploiting U.S. investment to advance their development of key technologies and products with national security implications for the United States. Now in its fourth month, the Outbound Program prohibits U.S. persons from making certain investments and requires U.S. persons to notify Treasury of certain other investments in certain sensitive technologies and products in the semiconductor, quantum information, and artificial intelligence sectors.
Treasury has been busy receiving notifications under the Outbound Program, monitoring the market and taking steps to strengthen national security and facilitate compliance, including ensuring the investment community is aware of and familiar with the program.
Consistent with President Trump’s America First Investment Policy and America First Trade Policy, we plan to continue to evaluate whether the program is appropriately scoped to be responsive to developments in technology and the strategies of countries of concern. We are considering the feedback we have received over the first few months of the program’s operation and thinking about where adjustments might be made, including discussions with our partners in Congress to ensure any gaps in our authorities are addressed. We will be nimble in adjusting to the evolving national security landscape and we are encouraging our partners and allies to do the same.
I want to conclude by thanking you all for having me here today, and for the work you do every day to enable U.S. investments and the flow of investment into the U.S. economy. This Administration is committed to progressing the important work of CFIUS and the Outbound Program and to making sure that American businesses can grow and prosper without consequence to U.S. national security.