Foreign Investment in the United States

Committee on Foreign Investment in the United States in 2013 (Continuation)

United States views on international law [1] in relation to Committee on Foreign Investment in the United States: So plaintiff's entire ultra vires claim is premised upon the notion that the only thing the statute permits the President to do is to suspend or prohibit a transaction. But the statute doesn't say that. Section 721(d)(1) does not limit the President's authority to merely suspending or prohibiting a transaction; rather, it grants the President extremely broad authority to “take such action for such time as the President considers appropriate to suspend or prohibit” transactions. (emphasis added). In other words, the statute expressly authorizes the President to do what he deems necessary to accomplish or implement the prohibition—not merely to issue it. The use of the open-ended temporal phrase “for such time” reinforces this interpretation; if the President was permitted to do nothing more than make an up or down decision, he would not need an unlimited period of time.

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It is important to note that in this case, Ralls did not seek CFIUS approval before it acquired the projects or began construction and installation of the turbines. Rather, CFIUS and the President were presented with a purchase that had already taken place and a project that was already under way. The Presidential Order declares the transaction that resulted in the acquisition to be prohibited and then states, “in order to effectuate this order,” Ralls is required to divest. Presidential Order § 2(b). The order then goes on to call for the removal of the Chinese turbines, to bar their use in the future, and to restrict the foreign nationals' access to the premises, among other things. Id. §§ 2(c)–(f). Since deciding to impose these sorts of requirements falls well within the scope of “taking such action . . . as the President considers appropriate . . . to prohibit” a transaction—particularly given the fact that the transaction had already taken place— their imposition was a Presidential action under subsection (d)(1) of the statute, and those actions have been declared to be unreviewable by Congress. Thus, in accordance with the instructions set out by the D.C. Circuit in Amgen, this Court finds that the challenged action “is of the sort shielded from review.” 357 F.3d at 113.

Development

In this case, the jurisdictional question can be decided based upon a review of the plain language of the statutory grant of authority and the finality provision. But the D.C. Circuit has indicated that courts should also look to the statute's structure and legislative history as well. Dart, 848 F.2d at 226. And here, those inquiries reveal that Congress structured the process so that Presidential action would be a last resort, to be exercised only the face of an otherwise uncontrollable national security risk. The statute established a multi-agency committee charged with the responsibility of determining in the first instance whether a transaction poses a national security concern and provided it with the tools to address any such concerns before the President gets involved at all. For example, Congress granted CFIUS the authority to “negotiate, enter into or impose, and enforce any agreement or condition” in order to mitigate any threat to the national security that arises as a result of the covered transaction. 50 U.S.C. app. § 2170(l)(1). Only if CFIUS determines that the measure did not mitigate the threat does the President have an opportunity to act. Id. §§ 2170(b)(2)(B)(i)(I), (d)(2). Moreover, the President is only authorized to take action if he finds that there is no other way to protect the national security: he must make a finding that “provisions of law, other than [section 721] and the International Emergency Economic Powers Act, do not, in the judgment of the President, provide adequate and appropriate authority for the President to protect the national security in the matter before the President.” Id. § 2170(d)(4)(B). The legislative history reflects the fact that Congress anticipated that the President would only rarely be involved. See H.R. Rep. No. 110-24(I) (2007), reprinted in 2007 U.S.C.C.A.N. 102, 104, at 11 (using language such as: “Transactions that enter investigation may also be terminated before reaching the President,” and “Presidential decisions are also avoided in cases where . . .”). So when Congress went on to foreclose judicial review of Presidential actions it did so in the context of a statutory scheme that limited the occasions for Presidential action in the first place.

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In addition, to protect against abuse of authority in the absence of judicial review, Congress established itself as the monitor of the actions of both CFIUS and the President. In 2007, Congress expressed concern about CFIUS's “accountability to Congress and the public” given that the reviews and investigations “remain highly confidential.” S. Rep. No. 110-80, at 3 (2007). The resulting amendments to the statute “enhance[d] Congress's ability to perform its necessary oversight of the CFIUS process.” Id. at 7. This takes the form of “a system of briefings and annual reporting to Congress,” and briefings to any member of Congress on request. Id. at 8– 11; 50 U.S.C. app. § 2170(g), (m). Moreover, “[a]ny transaction that goes to the President must be reported to Congress.” H.R. Rep. No. 110-24(I), at 11; see 50 U.S.C. app. § 2170(b)(3).

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Finally, the legislative history reflects that Congress recognized that the authority it was conferring upon the President was to be executed in an area where the President already has broad authority to act. [E]xclusive of any powers derived from the Exon-Florio amendment or related regulations or executive orders, the President ultimately reserves the right in any transaction and at any time to reverse a transaction for national security purposes. This authority derives both from the International Emergency Economic Powers Act and his inherent powers in the conduct of foreign affairs. H.R. Rep. No. 110-24(I), at 12. So a review of the structure of the statute and its legislative history supports the Court's determination that the finality provision bars consideration of the particular ultra vires claim advanced in this case.

Resources

Notes

1. Committee on Foreign Investment in the United States in the Digest of United States Practice in International Law