Financial Times: US Intelligence Agencies Fret Foreign Buying of US Firms

Friday, 21 Dec 2012 10:13 AM

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U.S. intelligence agencies are growing increasingly worried over foreign businesses purchasing U.S. firms, likely the result of governments directing those buyers to snap up makers of sensitive technology, according to the Financial Times.

A report compiled by the Committee on Foreign Investment in the U.S. identified “suspect behavior” including takeover attempts involving “narrowly targeted incentives by foreign governments” such as grants, loans or tax breaks to companies acquiring U.S. targets, the Times reported.

The U.S. Treasury, which chairs the committee, would not provide the FT details on specific deals, though the newspaper reported that countries engaged in transactions involving critical technology last year included the United Kingdom, France, Japan, Canada, the Netherlands, Germany, Israel and China.

Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.

“It is a shot across the bow. They’re saying ‘we know you are doing this and we are on the lookout for you.’ Just know some of these are not going to get approved,” said Jamie Garelick, the former deputy attorney general under the Clinton administration, the Times added.

Some experts say China poses a particular threat due to the close relationship between the government and the business sector.

“There is a lot of attention on China because they are so problematic [for the United States] and a lot of that has to do with the [corporate] links to the Chinese government,” said James Lewis, a senior fellow at the Center for Strategic & International Studies, the Times added.

Earlier this year, the Obama administration ordered the Ralls Corporation, owned by Chinese nationals, to halt plans to build a wind farm near a U.S. Navy base in Oregon, the first time in 22 years the U.S. blocked a business transaction due to national security risks.

“The president’s action demonstrates the administration’s commitment to protecting national security while maintaining the United States’ longstanding policy on open investment,” the U.S. Treasury said a statement.

The company was quick to disagree.

“The project poses no national security threat whatsoever, and the president’s order offers no explanation otherwise,” Tim Xia, a lawyer with Morris, Manning & Martin LLP, which represents Ralls, said in a statement, Bloomberg reported.

“Scores of other wind turbines already operate in the area where Ralls’ project is located.”

Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.

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