Congress Has ‘Strong’ Bipartisan Support to Expand CFIUS, Senators Say

Senators have enough bipartisan support to add the USDA secretary to the Committee on Foreign Investment in the U.S. and expand CFIUS jurisdiction to cover a broader range of agriculture-related purchases, lawmakers said this week. Several said the committee isn’t doing enough to prevent Chinese government-affiliated companies from purchasing U.S. land and want to expand its reach, particularly after CFIUS determined last year that it didn’t have the jurisdiction to intervene in a Chinese purchase of land near a North Dakota Air Force base.

CFIUS received criticism after it didn't block China-based Fufeng Group's purchase of the farm land, including from lawmakers and the Air Force, which said it disagreed with the committee’s decision (see 2302070028). Speaking during a Senate Banking Committee hearing this week, Sen. Kevin Cramer, R-N.D., called the situation a “CFIUS nightmare.”

“I cannot tell you how disappointing it was,” Kramer said, adding that the determination was “clumsily” handled. “We're deeply disappointed, and I hope we can, and I think we do, have strong bipartisan support for strengthening agriculture's role on CFIUS.”

Lawmakers have launched multiple efforts over the last several years to add the USDA secretary to CFIUS, including a bipartisan House and Senate bill in February that would also block China, Russia, Iran and North Korea from investing in American agricultural companies (see 2302070025). Sen. John Tester, D-Mont., who introduced the February legislation in the Senate alongside Sen. Mike Rounds, R-S.D., said the two lawmakers “already have our minds made up” that Chinese government-affiliated companies shouldn’t be allowed to purchase U.S. land. “The question becomes, if we put it into effect,” Tester said, can CFIUS “actually enforce it?”

CFIUS could easily add the USDA secretary as a permanent member, said Clay Lowery, a former Treasury Department official and CFIUS chair, but mandating that it review and potentially block all Chinese investments in U.S. agricultural land would be more complicated. He said CFIUS already reviews more than 400 investment transactions per year and would need more resources if that number were to increase. “That’s going to be a fair amount of work,” Lowery said during the hearing.

He also said he has “concerns” about a blanket prohibition on investments from specific countries. “I do believe strongly in the ability for entities to invest in the United States, because I think that is actually a positive for the United States,” he said. “So I'm a little reluctant on suggesting absolute prohibitions."

Lowery, the executive vice president for research and policy at the Institute of International Finance, also said an expansion of CFIUS would create a resource issue. CFIUS would likely have to examine “every single transaction that takes place on farmland from foreign buyers,” because buyers from China, for example, could use shell companies to disguise their ownership. “That could be a fairly significant expansion of CFIUS,” Lowery said.

Tester agreed, but said the expansion may be necessary. “I hope you will work with us to make this workable,” he said. “And I know it's going to be complicated, and I know that people are going to say this can't be done, but I think this is a huge issue.”

Other lawmakers made similar points, including Sen. Katie Britt, R-Ala., who said the USDA secretary needs a “permanent seat at the table.” Although CFIUS can solicit advice from USDA on an “ad hoc basis,” Lowery said "it sounds to me like this probably should be looked at in a more systematic way."

“One acre of our farmland owned by the Chinese Communist Party is one acre too many,” Britt said. “We're allowing China to buy up farmland near our military installations. It is completely and totally unacceptable.”