Download Three Threats: An Analytical Framework for the CFIUS Process by Theodore Moran PDF

By Theodore Moran

Overseas direct funding is a crucial a part of the USA financial system, however it periodically increases public and congressional alarms. less than what stipulations may perhaps a overseas acquisition of a US corporation represent a real nationwide safeguard danger to the USA? What forms of dangers and threats may still CFIUS (Committee on overseas funding within the usa) analysts, strategists, and congressional overseers be ready to spot and care for? To take on this challenge strategically, 3 Threats classifies the aptitude threats into 3 targeted different types. the 1st type of risk is the potential of US dependency upon a foreign-controlled provider who presents items or providers necessary to either the U.S. economic climate and the operation of the protection commercial base. the second one type of probability is a proposed acquisition that will permit move of expertise or different services to a foreign-controlled entity. In flip, this know-how may be deployed by way of the entity or its govt in a fashion destructive to US nationwide pursuits. The 3rd type of probability is a proposed acquisition that might let insertion of capability potential for infiltration, surveillance, or sabotage--via a human agent or nonhuman agent-- into the supply of products or companies an important to the functioning of the united states financial system, together with safeguard commercial job. This publication appears at real-life instances and concludes with a severe exam of analytical instruments that may reduction CFIUS deliberations, specifically, the Herfindahl-Hirschman focus index as utilized in antitrust circumstances and strategic alternate concept.

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Extra info for Three Threats: An Analytical Framework for the CFIUS Process (Policy Analysis in International Economics 89)

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The proposed transaction allows Finmeccanica to consolidate its international role as a major supplier of integrated systems for defense and security and to enter the US market as a key player; it allows DRS to seek new business opportunities in the United States and abroad. Complexities surrounding the proposed acquisition emerged as soon as Finmeccanica discovered that DRS was engaged in several large special access programs (SAPs)—programs so secret that even knowledge of their existence required an exceptionally high level of compartmentalized security clearance.

Certainly, if the US government did not legally and/or physically block such shipments. But this would penalize the PLA through supplying more expensive oil from the Gulf of Mexico in comparison to provision from cheaper alternative commercial suppliers nearer to home. ) Moreover, in a bilateral crisis—perhaps over a confrontation across the Taiwan Straits—a CNOOC-owned US-based Unocal actually would represent a hostage in US hands, not the other way around. Allowing Unocal business (and Lenovo-IBM business) to proceed as usual would be a bargaining chip for the US government, helping to offset countervailing Chinese pressures on US investors on the Chinese mainland.

On October 22, 2008, Finmeccanica announced that it had received all required US regulatory approvals to proceed with the acquisition of DRS Technologies. THREAT III 31 Implications for CFIUS Strategy: 5 Separating Easy Decisions from Hard Judgments In this Policy Analysis, I have presented some simple guidelines for CFIUS strategists and congressional overseers to determine when a proposed foreign acquisition might pose a threat to US national interests and when it would not. For the three possible types of threats analyzed, a thorough assessment requires first determining the criticality of the goods or services provided by the target of the proposed acquisition—that is, what the costs would be if provision were denied or manipulated, or how much advantage the foreign purchaser and its government would gain through the acquisition of specialized knowledge or technology, or how extensive the damage would be from surveillance or disruption in the acquired company or network.

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