A bipartisan group of co-sponsors in both the House and the Senate recently introduced the Foreign Investment Risk Review Modernization Act (“FIRRMA”). These substantively identical bills demonstrate that Congress is now considering increasing the scrutiny of foreign investment in the U.S., particularly from China.

The Committee on Foreign Investment in the United States (“CFIUS”) is the interagency body is responsible for reviewing incoming foreign investments for national security risks, so long as they are “covered transactions.” FIRRMA would broaden the scope of “covered transactions” to include, among other things: the purchase or lease by a foreign person of real estate located near U.S. military or national security interests; non-passive investments in critical technologies or critical infrastructure; and the contribution of U.S. critical technology to a foreign person, including through joint ventures, among others. The bills would also update certain terms and definitions, including “critical technology,” which can include emerging technologies that are not necessarily controlled for export. Notably, FIRRMA would not extend CFIUS jurisdiction to “greenfield” investments, which the regulations carve out from CFIUS review.

FIRRMA would make a variety of other key changes as well. First, “countries of special concern,” including China, would be a risk factor in the CFIUS analysis. CFIUS would also have additional tools to mitigate any national security risk, including monitoring and enforcement mechanisms. Last, the bill would change certain procedural elements of the CFIUS review and investigation process. For example, it would extend the initial review period from 30 to 45 days and would allow a one-time, 30-day extension in “extraordinary circumstances” at the request of a federal agency head. It would also create a process for expedited review and approval of some transactions.