The House voted 222-210 last week to pass its China competition bill, which includes a variety of provisions that could expand U.S. export controls, sanctions and investment screening authorities. Although the America Competes Act faced objections from Republicans who argued it wasn’t tough enough on China and didn’t include strong enough export control measures (see 2202020039), several provisions could lead to more China sanctions and further restrict exports of critical American technologies.

Lawmakers submitted a host of amendments to the House’s recently released China competition bill, including measures that would introduce new export controls and sanctions authorities and requirements. One submission, a 115-page amendment from Rep. Michael McCaul, R-Texas, would create more congressional oversight of the Commerce Department’s emerging and foundational technology control effort and calls for expanded export restrictions against Chinese military companies.

The U.S. should try to use existing tools to better screen outbound investments rather than create a new investment regime, which could burden American companies and damage U.S. competitiveness, two former U.S. officials and an international investment expert said. But one member of a bipartisan congressional commission said a new outbound investment regime is necessary to better protect U.S. critical technologies and national security.

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The Senate is “likely” to vote on the annual defense policy bill this week, which could include the Senate-passed U.S. Innovation and Competition Act of 2021, Senate Majority Leader Chuck Schumer, D-N.Y., said. In a Nov. 14 letter to lawmakers, Schumer said “there seems to be fairly broad” bipartisan support for adding USICA to the National Defense Authorization Act, which would allow a USICA negotiation with the House “to be completed alongside” the NDAA before the end of the year. The House plans to write its own version of USICA.

A Senate bill with bipartisan support would expand which deals involving sensitive personal U.S. data must be declared to the Committee on Foreign Investment in the U.S. The Protecting Sensitive Personal Data Act, introduced this month by Sens. Marco Rubio, R-Fla., and Raphael Warncok, D-Ga., would require mandatory declarations for investments that involve a range of personal data information, including genetic test results, health conditions, insurance applications, financial hardship data, security clearance information, geolocation data, private emails, data for generating government identification and credit report information. Warnock said “foreign entities” are investing in U.S. companies to “exploit” this data. “We need to strengthen CFIUS’s oversight authority of these transactions to protect Americans and mitigate this serious national security threat,” Rubbio said.

Sen. John Kennedy, R-La., reintroduced a bill that would require a review by the Committee on Foreign Investment in the U.S. for all “greenfield” investments made by certain Chinese businesses on U.S. soil. The bill, introduced last week, would specifically require CFIUS to look at any foreign investment that “involves the acquisition of real estate in the U.S. and the establishment of a U.S. business on such real estate” and that “results in China’s direct or indirect control of that U.S. business.” These investments would trigger a mandatory declaration with CFIUS if China’s government has a “substantial interest” in the deal.

Lawmakers introduced a bill last week that would seek to further protect the U.S. agriculture industry from “improper” foreign investment and add the agriculture secretary to the Committee on Foreign Investment in the U.S. The Foreign Adversary Risk Management Act, introduced in the Senate by Tommy Tuberville, R-Ala., and in the House by Ronny Jackson, R-Texas, and Filemon Vela, D-Texas, would address that CFIUS “does not directly consider the needs of the agriculture industry when reviewing foreign investment and ownership in domestic businesses,” the lawmakers said.

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Measures this year by the United Kingdom, Germany and Canada to boost their foreign investment screening regimes will likely improve their standing with the Committee on Foreign Investment in the U.S. and could catapult Germany into CFIUS’s group of excepted foreign states, observers said. Although Germany could become an excepted state, each country has tightened its screening tools to further scrutinize certain foreign direct investments, which will likely lead to more investment hurdles for their respective industries.