U.S. Senators Bob Casey (D-PA) and John Cornyn (R-TX) announced on Tuesday the passage of their bill, the Outbound Investment Transparency Act, which aims to screen U.S. investments in national security sectors made in countries of concern, including the People’s Republic of China.
The Outbound Investment Transparency Act provides the U.S. with visibility into potential vulnerabilities and risks posed when the Chinese government has access to American technology and knowledge in national security sectors. The industries covered under the bill include 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 bill was passed as an amendment to the National Defense Authorization Act (NDAA) by a vote of 91-6. The Senate is expected to finalize the passage of NDAA by the end of this week.
Senator Casey stated, “The United States is at a crossroads; we can take control of our own future or we can let China eat our lunch. 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 get into the hands of our adversaries.”
Senator Cornyn added, “When American companies invest in technology like semiconductors or AI in countries like China and Russia, their capital, intellectual property, and innovation can fall into the wrong hands and be weaponized against us. This bill would increase the visibility of these investments, which will help the U.S. gather the information needed to better evaluate our national security vulnerabilities, confront threats from our adversaries, and remain competitive on the global stage.”
The Senators first introduced the outbound investment screening legislation, National Critical Capabilities Defense Act, in May 2021 as an amendment to the United States Innovation and Competition Act. They 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.
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