WASHINGTON — Wednesday, U.S. Senators Bob Casey, D-Pa., and John Cornyn, R-Texas, announced passage of their bill to screen U.S. investments in national security sectors that are made in countries of concern, including the People’s Republic of China.
“Today’s overwhelming vote shows that there is bipartisan consensus to meet the challenge posed by the Chinese government and I hope that this is just the start,” said Senator Casey.
The Outbound Investment Transparency Act would give the U.S. visibility into vulnerabilities and risks posed when the Chinese government has access to American technology and know-how in national security sectors. The industries included under the bill are: advanced semiconductors and microelectronics, artificial intelligence, quantum information science and technology, hypersonics, satellite-based communications, and networked laser scanning systems with dual-use applications. The Outbound Investment Transparency Act passed as an amendment to the National Defense Authorization Act (NDAA) by a vote of 91-6. The Senate is expected to vote on final passage of the NDAA at the end of this week.
“The United States is at a crossroads; we can take control of our own future or we can let China eat our lunch,” said Senator Casey.“The Outbound Investment Transparency Act is a strong first step to give the U.S. insight into the risks of allowing American national security technology and know-how to get into the hands of our adversaries.”
Senators Casey and Cornyn first introduced outbound investment screening legislation, National Critical Capabilities Defense Act, in May 2021 as an amendment to the United States Innovation and Competition Act. Since then, Senator Casey has been pushing for action so the U.S. can better understand the risks of allowing foreign adversaries to gain access to critical capabilities and technology, as well as to design and manufacture goods that are vital to U.S. economic and national security interests. Senators Casey and Cornyn have been working to garner bipartisan and bicameral support for their bill. Biden Administration officials, including Commerce Secretary Gina Raimondo, United States Trade Representative Katherine Tai, and National Security Advisor Jake Sullivan have also expressed support for increased scrutiny of outbound investment.
In September 2022, the cosponsors of the National Critical Capabilities Defense Act, urged President Biden to take executive action to prevent the U.S. from ceding our manufacturing power and technological know-how to foreign adversaries. Days later, Casey and Cornyn testified in support of the National Critical Capabilities Defense Act in front of the Senate Banking Committee, stressing the importance of assessing potential risks of American investments in adversarial countries.
In December 2022, the Fiscal Year 2023 spending bill appropriated approximately $20 million in funding for the Department of Commerce and the Department of the Treasury to establish an outbound investment screening program by Executive Order, as Casey has pushed for the Administration to do. In March 2023, Casey wrote an op-ed outlining how to protect American innovation and keep American national and economic interests out of adversaries’ hands. In May, Senate Majority Leader Chuck Schumer, D-N.Y., announced a new initiative to strengthen America’s global leadership, including Casey’s provision to screen U.S. investments being made in countries of concern.
Ahead of the 2023 introduction of the Outbound Investment Transparency Act, Casey continued to build momentum for the policy. In June, key Administration officials testified in front of the Senate Banking Committee about the importance of screening American companies’ investments in countries of concern — testimony which supports Casey’s proposal. Later that month, Casey delivered a rousing speech to union workers and business leaders in Pittsburgh to outline his vision for the United States to take control of its economic future, including screening investments going to countries like the People’s Republic of China and help de-risk our supply chains. On July 13, he and Cornyn introduced the Outbound Investment Transparency Act as an amendment to the NDAA.
