Washington, D.C. – Today, the House of Representatives passed the Foreign Investment Risk Review Modernization Act (FIRRMA), a bipartisan agreement to protect both our national security and economic prosperity. Specifically, this bill significantly strengthens national security reviews of certain proposed foreign investments by the cross-agency Committee on Foreign Investment in the United States (CFIUS) and also reforms and modernizes U.S. controls over exports of certain “dual-use” and military items.

On the House floor prior to the vote, Chairman Royce delivered the following remarks (as prepared for delivery):

“Over the past decade, we’ve seen rapid technological advances and an increase in foreign investment in the United States – especially from countries like China and Russia that pose national security concerns. Of great alarm, our regulatory system has not kept pace. Mr. Pittenger’s bill before us today seeks to change that.

The Foreign Investment Risk Review Modernization Act (FIRRMA) represents a broad bipartisan agreement to reform our regulatory systems to protect both our national security and our economic prosperity. Specifically, this bill strengthens national security reviews of certain commercial transactions conducted by CFIUS, as well as reforms and modernizes the outdated U.S. export control regime.

I want to thank the Chairman of the Financial Services Committee, Mr. Hensarling, for his leadership on this issue. The Committees on Armed Services, Intelligence, Energy and Commerce, Budget, and Oversight and Government Reform also played important roles in shaping this legislation. This has been a truly collaborative process.

Mr. Speaker, this body has not addressed exports of dual-use items – products and services that have both commercial and military application – since the Export Administration Act of 1979. Since the EAA’s lapse nearly 25 years ago, successive administrations have relied on emergency authorities that have not kept pace with technological advances.

Today we are acting to fix that problematic lapse, because the United States’ position as the world’s largest exporter of goods and services is at risk. We will lose many good-paying jobs if we don’t better secure advanced technology and intellectual property.

That’s why this spring, the Foreign Affairs Committee passed the Export Control Reform Act of 2018. Under this approach, reflected in Title VIII of the bill before us, modernized U.S. export control laws and regulations will continue to have broad authority, governing the transfer of dual-use items and technology to foreign persons – whether that transfer takes place abroad or here in the United States.

Let me just highlight a few critical features of the export control provisions of this legislation. This title of the bill:

  • Requires that export controls be calibrated and continually updated to ensure lasting U.S. leadership in science, technology, engineering, manufacturing, and other sectors critical to the industrial base.
  • Ensures that sensitive manufacturing ‘know-how’ – which may include such items as written or oral communications, blueprints, engineering designs and specifications – are subject to appropriate export controls regardless of the nature of the underlying transaction.
  • Establishes a new authority for the U.S. export control agencies and the Department of Defense to identify and appropriately control emerging and foundational technologies that may be critical to U.S. national security. This includes artificial intelligence, robotics, augmented and virtual reality, new biotechnologies, new financial technologies, and advanced materials.

Ten years ago, Mr. Sherman and I held a series of hearings to examine China’s increasingly aggressive policies in the wake of the EAA’s expiration. I appreciate his passion for these issues, and his understanding of the need to balance our economic and national security interests. We need a nimble, adaptable system that protects but doesn’t unduly burden our world class industries.

Modernized U.S. export controls and CFIUS reforms are critical responses to the challenges posed by China, Russia, and others. This bill will help keep America safe and strong.”