House Financial Services Subcommittee hears competing views on CFIUS, FIRRMA and outbound investment rules

The House Financial Services Committee Subcommittee on National Security, International Finance and Monetary Policy held a hearing titled "U.S. policy on investment security," where members and witnesses debated how the Committee on Foreign Investment in the United States (CFIUS), the 2018 Foreign Investment Risk Review Modernization Act (FIRRMA) and a newly formed outbound investment screening regime should be structured to protect national security without deterring beneficial foreign investment.

The hearing opened with Chairman Davidson saying the session would examine CFIUS and its role in protecting national security, and Ranking Member Joyce Beatty warned against weakening bipartisan tools such as the Corporate Transparency Act. The panel included Jonathan Sanford, president and CEO of the Global Business Alliance; Brian Reishaus, senior adviser at Freshfields; Ben Joseph, partner at Cravath, Swaine & Moore; and Dr. Sarah Bauerly Danzmann, associate professor of international studies at Indiana University.

Why it matters: Witnesses described a policy trade-off between preserving an open U.S. investment climate and preventing foreign access to sensitive technology, infrastructure or data. Several members pressed for clearer rules and faster reviews so benign investment is not chilled, while others warned against politicizing national-security reviews.

Panelists' main arguments

Jonathan Sanford, president and CEO of the Global Business Alliance, argued that foreign direct investment remains a major economic engine for the United States and that…