On Monday, the US Department of the Treasury announced a Notice of Proposed Rulemaking (NPRM) to expand the scope of the Committee on Foreign Investment in the United States (CFIUS) reviews of real estate transactions near US military facilities. The new regulation adds over 50 military facilities in 30 states to the existing review list, expanding the jurisdiction to 227 military facilities.
CFIUS is an interagency committee composed of secretaries and observers from 11 government agencies including the State Department, Department of Justice, Department of Energy, and Department of Commerce, with the Secretary of the Treasury serving as the committee chair. Its mission is to investigate corporate transactions for national security considerations and has the authority to compel changes or complete withdrawal of investments in the US.
According to legislation passed by Congress in 2018, CFIUS has the authority to review certain real estate transactions near specific military facilities and take action as appropriate.
The proposed rule announced on Monday expands CFIUS jurisdiction over land transactions within a one-mile radius for 40 additional military locations and within a 100-mile radius for 19 newly added military facilities.
Previously, the eight military facilities on the review list will see their one-mile radius expanded to a 100-mile radius.
Following publication in the Federal Register, the proposed rule will be open for public comment for 30 days. The Treasury Department encourages the public to submit written comments on the proposed rule.
Treasury Secretary Janet L. Yellen stated in a press release that the Biden administration “remains committed to using our robust investment screening tools to defend America’s national security, including taking action to protect military facilities from external threats.”
“The Committee on Foreign Investment in the United States plays an indispensable role in national security by thoroughly reviewing real estate transactions near sensitive military facilities. This proposed rule will significantly expand its jurisdiction and capacity to fulfill this important mission.”
A Treasury Department official, speaking on condition of anonymity to Reuters, described this regulation as the most significant expansion of CFIUS review authority since the 2018 law was enacted. The official mentioned, “This new regulation significantly expands CFIUS’ real estate jurisdiction while maintaining a strong focus on national security.”
Facilities newly included within 100-mile radius for CFIUS review of foreign real estate transactions include Whiteman Air Force Base in Missouri, home to the only squadron of nuclear-capable B-2 stealth bombers, and Barksdale Air Force Base in Louisiana, headquarters for the US military’s B-52 strategic bombers.
Malmstrom Air Force Base in Montana, housing a nuclear missile squadron, which has transitioned from a one-mile radius review category to a 100-mile radius category.
Camp Grayling, the Michigan National Guard training base, has also been added to the 100-mile list. This designation could complicate the plans of Chinese battery giant Gotion High-Tech’s $2.36 billion investment to establish an electric vehicle battery component plant within 100 miles of Camp Grayling.
The project received support from state government officials and millions of dollars in financial incentives from the government. The plan is said to create 2,350 jobs locally. However, due to concerns about infiltration by Chinese Communist influence, the construction project faced strong opposition and resistance from local town officials and residents.
In June of this year, the New York Post reported on Chinese companies purchasing land near 19 US military bases, sparking widespread concern. The report also included a map of the US showing rapid expansion of Chinese-owned farmland strategically located near US military bases.
The US government is increasingly focused on the national security risks posed by Chinese acquisitions of properties near sensitive military locations. In May, the White House issued an executive order directing a Chinese company and its partners to sell real estate they had purchased near F.E. Warren Air Force Base in Wyoming. The base is home to the Minuteman III intercontinental ballistic missiles. The White House stated that the proximity of the real estate to the military base posed a “national security risk.”