Ensuring Robust Consideration of Evolving National Security Risks by the Committee on Foreign Investment in the United States, 57369-57374 [2022-20450]

Agencies

• Executive Office of the President

[Federal Register Volume 87, Number 181 (Tuesday, September 20, 2022)]
[Presidential Documents]
[Pages 57369-57374]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-20450]




                        Presidential Documents 



Federal Register / Vol. 87, No. 181 / Tuesday, September 20, 2022 / 
Presidential Documents

[[Page 57369]]


                Executive Order 14083 of September 15, 2022

                
Ensuring Robust Consideration of Evolving 
                National Security Risks by the Committee on Foreign 
                Investment in the United States

                By the authority vested in me as President by the 
                Constitution and the laws of the United States of 
                America, including section 721 of the Defense 
                Production Act of 1950, as amended (50 U.S.C. 4565) 
                (section 721), and section 301 of title 3, United 
                States Code, it is hereby ordered as follows:

                Section 1. Policy. The United States welcomes and 
                supports foreign investment, consistent with the 
                protection of national security. The United States 
                commitment to open investment is a cornerstone of our 
                economic policy and provides the United States with 
                substantial economic benefits, including ``the 
                promotion of economic growth, productivity, 
                competitiveness, and job creation, thereby enhancing 
                national security,'' as the Congress recognized in 
                section 1702(b)(1) of the Foreign Investment Risk 
                Review Modernization Act of 2018 (FIRRMA) (Subtitle A 
                of Title XVII of Public Law 115-232). Some investments 
                in the United States by foreign persons, however, 
                present risks to the national security of the United 
                States, and it is for this reason that the United 
                States maintains a robust foreign investment review 
                process focused on identifying and addressing such 
                risks.

                It is important to ensure that the foreign investment 
                review process remains responsive to an evolving 
                national security landscape and the nature of the 
                investments that pose related risks to national 
                security, as the Congress recognized in section 
                1702(b)(4) of FIRRMA. One factor for the Committee on 
                Foreign Investment in the United States (Committee) to 
                consider, as the Congress highlighted in section 
                1702(c)(1) of FIRRMA, is that national security risks 
                may arise from foreign investments involving ``a 
                country of special concern that has a demonstrated or 
                declared strategic goal of acquiring a type of critical 
                technology or critical infrastructure that would affect 
                United States leadership in areas related to national 
                security.'' Along these lines, I previously underscored 
                in Executive Order 14034 of June 9, 2021 (Protecting 
                Americans' Sensitive Data From Foreign Adversaries), 
                and emphasize in this order the risks presented by 
                foreign adversaries' access to data of United States 
                persons. With respect to investments directly or 
                indirectly involving foreign adversaries or other 
                countries of special concern, what may otherwise appear 
                to be an economic transaction undertaken for commercial 
                purposes may actually present an unacceptable risk to 
                United States national security due to the legal 
                environment, intentions, or capabilities of the foreign 
                person, including foreign governments, involved in the 
                transaction. It is the policy of the United States 
                Government to continue to respond to these risks as 
                they evolve, including through a robust review of 
                foreign investments in United States businesses.

                In light of these risks, this order provides direction 
                to the Committee to ensure that, in reviewing 
                transactions within its jurisdiction (covered 
                transactions), the Committee's review remains 
                responsive to evolving national security risks, 
                including by elaborating and expanding on the factors 
                identified in subsections (f)(1)-(10) of section 721. 
                This order shall be implemented consistent with the 
                Committee's statutory mandate to determine the effects 
                of each covered transaction reviewed by the Committee 
                on the national security of the United States.

[[Page 57370]]

                Sec. 2. Elaboration on Existing Statutory Factors. (a) 
                In considering the factors described in subsection 
                (f)(3) of section 721, the Committee shall, taking into 
                account the requirements of national security, consider 
                the following, as appropriate:

(i) It is important to national security that the Committee continues to 
assess the effect of foreign investment on domestic capacity to meet 
national security requirements, including those requirements that fall 
outside of the defense industrial base. In particular, the resilience of 
certain critical United States supply chains may have national security 
implications. The United States recognizes the importance of cooperating 
with its allies and partners to secure supply chains; however, certain 
foreign investment may undermine supply chain resilience efforts and 
therefore national security by making the United States vulnerable to 
future supply disruptions. These vulnerabilities may occur if an investment 
shifts ownership, rights, or control with respect to certain manufacturing 
capabilities, services, critical mineral resources, or technologies that 
are fundamental to national security--including because they are critical 
to United States supply chain resilience--to a foreign person who might 
take actions that threaten to impair the national security of the United 
States as a result of the transaction, or to other foreign persons, 
including foreign governments, to whom the foreign person has commercial, 
investment, non-economic, or other ties (relevant third-party ties) that 
might cause the transaction to pose a threat to national security.

(ii) The Committee shall consider, as appropriate, the covered 
transaction's effect on supply chain resilience and security, both within 
and outside of the defense industrial base, in manufacturing capabilities, 
services, critical mineral resources, or technologies that are fundamental 
to national security, including: microelectronics, artificial intelligence, 
biotechnology and biomanufacturing, quantum computing, advanced clean 
energy (such as battery storage and hydrogen), climate adaptation 
technologies, critical materials (such as lithium and rare earth elements), 
elements of the agriculture industrial base that have implications for food 
security, and any other sectors identified in section 3(b) or section 4(a) 
of Executive Order 14017 of February 24, 2021 (America's Supply Chains).

  (A) The Committee shall consider, as appropriate, the degree of 
involvement in the United States supply chain by a foreign person who is a 
party to the covered transaction and who might take actions that threaten 
to impair the national security of the United States as a result of the 
transaction, or who might have relevant third-party ties that might cause 
the transaction to pose such a threat.

  (B) The Committee shall consider, as appropriate, the United States 
capability with respect to manufacturing capabilities, services, critical 
mineral resources, or technologies, including those described in subsection 
(a)(ii) of this section; the degree of diversification through alternative 
suppliers across the supply chain, including suppliers located in allied or 
partner economies; whether the United States business that is party to the 
covered transaction supplies, directly or indirectly, the United States 
Government, the energy sector industrial base, or the defense industrial 
base; and the concentration of ownership or control by the foreign person 
in a given supply chain, among other factors that the Committee determines 
to be appropriate in considering whether the covered transaction may 
undermine the resilience and security of supply chains critical to national 
security.

                    (b) In considering the factors described in 
                subsection (f)(5) of section 721, the Committee shall, 
                taking into account the requirements of national 
                security, consider the following, as appropriate:

(i) Although foreign investments can in many circumstances help to foster 
domestic innovation, it is important to protect United States technological 
leadership by addressing the risks posed by investments by foreign persons 
who might take actions that threaten to impair the national security of the 
United States as a result of the transaction, and by addressing whether

[[Page 57371]]

such persons have relevant third-party ties that might cause the 
transaction to pose such a threat.

(ii) The Committee shall consider, as appropriate, whether a covered 
transaction involves manufacturing capabilities, services, critical mineral 
resources, or technologies that are fundamental to United States 
technological leadership and therefore national security, such as 
microelectronics, artificial intelligence, biotechnology and 
biomanufacturing, quantum computing, advanced clean energy, and climate 
adaptation technologies. The Committee shall also consider, as appropriate, 
relevant third-party ties that might cause the transaction to threaten to 
impair the national security of the United States.

(iii) The Committee shall consider, as appropriate, whether a covered 
transaction could reasonably result in future advancements and applications 
in technology that could undermine national security.

(iv) The Office of Science and Technology Policy (OSTP), in consultation 
with other members of the Committee, shall periodically publish a list of 
technology sectors, including those technologies listed in subsection 
(b)(ii) of this section, that it assesses are fundamental to United States 
technological leadership in areas relevant to national security. OSTP 
shall, as appropriate, draw on the findings of other United States 
Government efforts to identify technology sectors that are fundamental to 
United States technological leadership. The Committee shall consider the 
list described in this subsection, as appropriate.

                Sec. 3. Additional Factors to be Considered. (a) In 
                addition to the factors identified in subsections 
                (f)(1)-(10) of section 721, the Committee shall 
                consider, in reviewing the effects of a covered 
                transaction on the national security of the United 
                States, the following factors relating to aggregate 
                industry investment trends that may have consequences 
                for an individual covered transaction's impact on 
                national security:

(i) Incremental investments over time in a sector or technology may cede, 
part-by-part, domestic development or control in that sector or technology 
and may give a foreign person who might take actions that threaten to 
impair the national security of the United States as a result of the 
transaction, or their relevant third-party ties that might cause the 
transaction to pose such a threat, control of or rights in United States 
businesses in a manner that may result in national security risk. A series 
of acquisitions in the same, similar, or related United States businesses 
involved in activities that are fundamental to national security or on 
terms that implicate national security may result in a particular covered 
transaction giving rise to a national security risk when considered in the 
context of transactions that preceded it. In aggregate, these transactions 
may facilitate harmful technology transfer in key industries or otherwise 
harm national security through the cumulative effect of these investments. 
As the Congress identified in section 1702(c)(2) of FIRRMA, the Committee 
may consider ``the cumulative control of, or pattern of recent transactions 
involving, any one type of critical infrastructure, energy asset, critical 
material, or critical technology by a foreign government or foreign 
person'' in considering national security risks. Contextualizing the 
Committee's review of an individual transaction in light of the aggregate 
or series of related transactions could reveal national security risks 
arising from the covered transaction that were not otherwise apparent.

(ii) The Committee shall consider, as appropriate, as part of the 
Committee's review of a covered transaction, the risks arising from the 
covered transaction in the context of multiple acquisitions or investments 
in a single sector or in related manufacturing capabilities, services, 
critical mineral resources, or technologies, by any foreign person who 
might take actions that threaten to impair the national security of the 
United States as a result of the transaction, or involving relevant third-
party ties that might cause the transaction to pose such a threat.

[[Page 57372]]

(iii) The Committee may request, as part of the Committee's review of a 
covered transaction, that the Department of Commerce's International Trade 
Administration provide the Committee an analysis of the industry or 
industries in which the United States business operates, and the cumulative 
control of, or pattern of recent transactions by, a foreign person, 
including, directly or indirectly, a foreign government, in that sector or 
industry.

                    (b) In addition to the factors identified in 
                subsections (f)(1)-(10) of section 721, the Committee 
                shall consider, in reviewing the effects of a covered 
                transaction on the national security of the United 
                States, the following factors relating to cybersecurity 
                risks resulting from a covered transaction that 
                threaten to impair national security:

(i) It is important for the United States to ensure that foreign investment 
in United States businesses does not erode United States cybersecurity. 
Investments by foreign persons with the capability and intent to conduct 
cyber intrusions or other malicious cyber-enabled activity--such as 
activity designed to affect the outcome of any election for Federal, State, 
Tribal, local, or territorial office; the operation of United States 
critical infrastructure; or the confidentiality, integrity, or availability 
of United States communications--may pose a risk to national security. The 
Congress, in section 1702(c)(6) of FIRRMA, identified ``exacerbating or 
creating new cybersecurity vulnerabilities'' as a relevant consideration 
for the Committee when considering national security risks arising from a 
covered transaction. Review of foreign investment is an important tool as 
part of broader United States efforts to ensure the cybersecurity of the 
United States.

(ii) The Committee shall consider, as appropriate, whether a covered 
transaction may provide a foreign person who might take actions that 
threaten to impair the national security of the United States as a result 
of the transaction, or their relevant third-party ties that might cause the 
transaction to pose such a threat, with direct or indirect access to 
capabilities or information databases and systems on which threat actors 
could engage in malicious cyber-enabled activities affecting the interests 
of the United States or United States persons, including:

  (A) activity designed to undermine the protection or integrity of data in 
storage or databases or systems housing sensitive data;

  (B) activity designed to interfere with United States elections, United 
States critical infrastructure, the defense industrial base, or other 
cybersecurity national security priorities set forth in Executive Order 
14028 of May 12, 2021 (Improving the Nation's Cybersecurity); and

  (C) the sabotage of critical energy infrastructure, including smart 
grids.

(iii) The Committee shall also consider, as appropriate, the cybersecurity 
posture, practices, capabilities, and access of both the foreign person and 
the United States business that could allow a foreign person who might take 
actions that threaten to impair the national security of the United States 
as a result of the transaction, or their relevant third-party ties that 
might cause the transaction to pose such a threat, to manifest cyber 
intrusion and other malicious cyber-enabled activity within the United 
States.

                    (c) In addition to the factors identified in 
                subsections (f)(1)-(10) of section 721, the Committee 
                shall consider, in reviewing the effects of a covered 
                transaction on the national security of the United 
                States, the following factors relating to national 
                security concerns surrounding sensitive data:

(i) Data is an increasingly powerful tool for the surveillance, tracing, 
tracking, and targeting of individuals or groups of individuals, with 
potential adverse impacts on national security. In section 1702(c)(5) of 
FIRRMA, the Congress recognized that the Committee may consider whether a 
covered transaction may ``expose, either directly or indirectly, personally 
identifiable information, genetic information, or other sensitive data of 
United States citizens to access by a foreign government or foreign person

[[Page 57373]]

that may exploit that information in a manner that threatens national 
security.'' Moreover, advances in technology, combined with access to large 
data sets, increasingly enable the re-identification or de-anonymization of 
what once was unidentifiable data. Therefore, it is important for the 
United States Government to stay current with threats posed by advances in 
such technology, including by considering potential risks posed by foreign 
persons who might exploit access to certain data on United States persons 
to target individuals or groups within the United States to the detriment 
of national security. Accordingly, the Committee shall consider whether 
foreign investments in United States businesses that have access to or that 
store United States persons' sensitive data, including health and 
biological data, involve a foreign person who might take actions that 
threaten to impair the national security of the United States as a result 
of the transaction, including whether the foreign person might have 
relevant third-party ties that might cause the transaction to pose such a 
threat.

(ii) The Committee shall consider, as appropriate, whether a covered 
transaction involves a United States business that:

  (A) has access to United States persons' sensitive data, including United 
States persons' health, digital identity, or other biological data and any 
data that could be identifiable or de-anonymized, that could be exploited 
to distinguish or trace an individual's identity in a manner that threatens 
national security; or

  (B) has access to data on sub-populations in the United States that could 
be used by a foreign person to target individuals or groups of individuals 
in the United States in a manner that threatens national security.

(iii) The Committee shall also consider, as appropriate, whether a covered 
transaction involves the transfer of United States persons' sensitive data 
to a foreign person who might take actions that threaten to impair the 
national security of the United States as a result of the transaction, and 
whether the foreign person has relevant third-party ties that have sought 
to exploit such information or have the ability to exploit such information 
to the detriment of national security, including through the use of 
commercial or other means.

                Sec. 4. Periodic Review. Consistent with the policy 
                described in section 1 of this order, it is important 
                for the Committee, on an ongoing basis, to continue to 
                review its processes, practices, and regulations, and 
                to continue to make any updates as needed and 
                appropriate to ensure that the Committee's 
                consideration of national security risks remains robust 
                alongside changes to the national security landscape. 
                Accordingly, the Committee shall regularly review its 
                processes, practices, and regulations, and shall 
                periodically provide to the Assistant to the President 
                for National Security Affairs a report documenting the 
                results of its review. The report shall also include 
                any resulting policy recommendations that the Committee 
                considers necessary to meet the evolving set of 
                national security risks.

                Sec. 5. Definitions. For purposes of this order, terms 
                shall have the same meanings ascribed to them in 
                section 721 and regulations promulgated by the 
                Committee under section 721.

                Sec. 6. General Provisions. (a) Nothing in this order 
                shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or 
the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget 
relating to budgetary, administrative, or legislative proposals.

                    (b) This order shall be implemented consistent with 
                applicable law and subject to the availability of 
                appropriations.
                    (c) This order is not intended to, and does not, 
                affect the requirements in section 721 relating to the 
                scope of the Committee's jurisdiction.

[[Page 57374]]

                    (d) This order is not intended to, and does not, 
                create any right or benefit, substantive or procedural, 
                enforceable at law or in equity by any party against 
                the United States, its departments, agencies, or 
                entities, its officers, employees, or agents, or any 
                other person.
                
                
                    (Presidential Sig.)

                THE WHITE HOUSE,

                    September 15, 2022.

[FR Doc. 2022-20450
Filed 9-19-22; 8:45 am]
Billing code 3395-F2-P