Officials from the U.S. Department of the Treasury and Department of Commerce testified in front of the Senate Banking Committee on Wednesday about the importance of screening American companies’ investments in countries of concern. Their testimony supports U.S. Senator Bob Casey (D-PA)’s bipartisan proposal to protect American supply chains and innovation by establishing a mechanism to better understand risks posed to the U.S. economy and national security by offshoring critical supply chains and know-how.
When asked by Banking Committee Chairman Sherrod Brown (D-OH) to describe the gap in existing authorities and the national security risks that an outbound investment mechanism would address, Assistant Secretary of the Treasury for Investment Security Paul Rosen responded, “We currently assess we don’t have an effective tool to target the money and sophistication with know-how that goes into these sensitive and most critical technologies into countries of concern.” To the question of what might happen if the US does not address this, Rosen said, “I think we risk leaving a gap in terms of some of our national security concerns and addressing some of the issues I laid out, Senator.”
As the lead sponsor of the National Critical Capabilities Defense Act, Senator Casey has been pushing for action so the US can better understand the risks of allowing foreign competitors 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. Casey’s legislation, first introduced in 2021, has bipartisan and bicameral support. 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 bipartisan, bicameral coalition supporting Senator Casey’s bill urged President Biden to take executive action to prevent the US from ceding our manufacturing power and technological know-how to foreign adversaries. Days later, Casey 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-NY) 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.
Watch the testimony HERE.
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