Abstract
Historically the United States of America has deeply depended on the inward foreign investment to attain economic development. The United States is welcome foreign investments from many countries of the world at the present age of globalization. However foreign persons and foreign entities are getting increasingly U. S. companies in mergers, acquisitions and takeovers. The United States is in dilemma between the wecoming of foreign investment in the U. S. and the protection of the national security. The United States put a special emphasis on the national security in section 5021 of Omunibus Trade and Competitiveness Act of 1988 in the amendment of the Section 721 of Defense Production Act of 1950. The amendment was sponsored by Senotor J. James Exon and Representative James J. Florio and named Exon-Florio provision. The Exon-Florio Amendment is a law that was enacted by the United States Congress in 1988 to review foreign investment within the United States. The amendment was passed into law under the Omnibus Trade and Competitiveness Act of 1988 and amended Section 721 of Defense Production Act of 1950. All foreign investments that might affect national security may be reviewed and if deemed to pose a threat to security, the President of the United States may block the investment. Foreign Investment and National Security Act of 2007 addresses investments made by foreign entities in the United States. The law strengthens pre-existing laws including Exon-Florio Amendment and Committee on Foreign Investment in the United States. The law established a framework for the review foreign acquisitions of U. S. assets by the Committee on Foreign Investment in the United State. CFIUS reform has been in the works since the the Dubai Ports World tranaction passed through CFIUS without a formal investigation, leaving a surprised and angry Congress determined to avoid a repetition of that scenario. Impetus for reform first began when the China National Oil Corporation publicly announced an interest in UNOCAL in 2005. The law established more stingent rules for the review and formal investigation of transactions, especially those involving foreign governments or critical infrastructure assets.
