US Widens Net on Foreign Real Estate Deals Near Military Bases
The Biden administration proposes to scrutinize more foreign real estate transactions near US military bases, citing national security concerns.
Real EstateNational SecurityForeign InvestmentCfiusMilitary BasesReal EstateJul 09, 2024
Under the new proposal, the Committee on Foreign Investment in the US (CFIUS) will have the authority to review real estate purchases near more than 50 military sites that were previously not covered. These added installations are deemed sensitive enough that even deals up to 100 miles away could be blocked.
'The CFIUS plays an integral role in US national security by thoroughly reviewing real estate transactions near sensitive military installations, and this proposed rule will significantly expand its jurisdiction and ability to accomplish this vital mission,' said Treasury Secretary Janet Yellen.
While the Treasury Department did not single out any specific national security concern as the driver behind the move, it is no secret that the US has been seeking to broaden its powers to review investment flows amid growing worries about China. In 2018, Congress expanded CFIUS's authority to encompass real estate transactions near military bases and other sensitive sites.
The proposed rule change would allow the administration to review transactions within 100 miles of Joint Base Cape Cod, located in Sandwich, Mass., meaning real estate deals near Boston and Providence, R.I., could also come under scrutiny. Similarly, transactions within 100 miles of Wright-Patterson Air Force Base in Dayton, Ohio, would also be subject to review, which could impact real estate deals in the booming Columbus area.
In May, President Biden ordered MineOne Partners, a crypto company ultimately owned by Chinese nationals, to sell real estate located within a mile of a Wyoming nuclear missile base. The transaction had not been filed with CFIUS, and officials only learned of it from a public tip, according to the administration.
The administration has also proposed giving CFIUS more power to get information and levy fines. Additionally, the US has proposed regulations on outbound flows of money to Chinese companies in certain sectors, such as artificial intelligence and semiconductors.
Information
The Committee on Foreign Investment in the US (CFIUS) is an inter-agency committee that reviews foreign investments in the US to identify potential national security risks. The US Treasury Department serves as the chair of the committee, which also includes representatives from other government agencies.
The US Treasury Department is responsible for promoting economic growth and stability in the US. One of its key objectives is to ensure that foreign investments in the country do not pose a risk to national security.
Frequently Asked Questions
What is the main objective of the proposed rule change?
The main objective is to expand the number of military installations that fall under the US Treasury Department's scrutiny to prevent potential national security risks.
Which committee will review real estate transactions near military bases?
The Committee on Foreign Investment in the US (CFIUS) will review real estate transactions near military bases.
Why is the US government concerned about foreign investment in real estate near military bases?
The US government is concerned about potential national security risks posed by foreign investment in real estate near military bases, particularly from countries like China.
What is the significance of the 100-mile radius in the proposed rule change?
The 100-mile radius is the distance from a military base within which real estate transactions may be subject to review by CFIUS.
Has there been a recent instance of a foreign company being ordered to sell real estate near a military base?
Yes, in May, President Biden ordered MineOne Partners, a crypto company ultimately owned by Chinese nationals, to sell real estate located within a mile of a Wyoming nuclear missile base.
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