On December 29, 2022, President Biden signed into law the Consolidated Appropriations Act, 2023 (the “Bill”),[1] which allocated approximately $1.7 trillion in federal funding to various government agencies, including the U.S. Department of Commerce (“Commerce”) and the U.S. Department of the Treasury (“Treasury”).

The explanatory statements[2] that accompanied the Bill included specific language encouraging Commerce to consider its role in the establishment of, and Treasury to consider formally establishing, an outbound investment screening program to “address the national security threats emanating from outbound investments from the United States in certain sectors that are critical for U.S. national security.”  According to those same statements and a press release by U.S. Senator Bob Casey,[3] Congress allocated approximately $20 million of the $1.7 trillion to Commerce and Treasury[4] and instructed them to submit a joint report by late February 2023 “describing such a program including the resources required over the next three years to establish and implement it.”  

This important legislative development follows recent remarks from Biden administration officials, including National Security Advisor Jake Sullivan,[5] the Biden administration’s recently published National Security Strategy,[6] meetings between economic advisors within the Biden administration and industry groups regarding outbound investment over the past few months,[7] and a bipartisan letter sent to the Biden administration from multiple members of Congress who previously voiced support for an outbound investment regime.[8]

While the timing, form, and scope of any outbound investment screening regime remain uncertain, this development confirms that an outbound investment screening regime likely is, at this point, inevitable, and potentially will be in place as early as March 2023.  We previously wrote about a potential outbound investment regime here.

[1] Consolidated Appropriations Act, 2023, H.R. 2617 117th Cong. (2022) is available at: https://www.appropriations.senate.gov/imo/media/doc/JRQ121922.PDF

[2] The bill summaries and relevant explanatory statements are available at: https://www.appropriations.senate.gov/news/majority/chairman-patrick-leahy-d-vt-releases-fiscal-year-2023-omnibus-appropriations-bill; see also https://www.appropriations.senate.gov/imo/media/doc/Division%20B%20-%20CJS%20Statement%20FY23.pdf; see also https://www.appropriations.senate.gov/imo/media/doc/Division%20E%20-%20FSGG%20Statement%20FY23.pdf

[3] The press release made by U.S. Senator Bob Casey, dated December 22, 2022, is available at: https://www.casey.senate.gov/news/releases/casey-delivers-for-pennsylvania-in-fiscal-year-2023-spending-bill.

[4] These government agencies likely were selected to lead the program’s design, development, and implementation, as Treasury currently serves as the Chair of the Committee on Foreign Investment in the United States (CFIUS) and Commerce is a member of CFIUS and administers other national security laws, including U.S. export controls. 

[5] Remarks by National Security Advisor Jake Sullivan at the Special Competitive Studies Project Global Emerging Technologies Summit, The White House Briefing Room, Speeches and Remarks, Sept. 16, 2022, available at https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/09/16/remarks-by-national-security-advisor-jake-sullivan-at-the-special-competitive-studies-project-global-emerging-technologies-summit/.

[6] The White House, National Security Strategy, p. 15, Oct. 12, 2022, available at https://www.whitehouse.gov/wp-content/uploads/2022/10/BidenHarris-Administrations-National-Security-Strategy-10.2022.pdf.

[7] Gavin Bade, Biden Admin, Industry Huddle on Outbound Investment Order, Nov. 28, 2022, available at: https://www.politico.com/newsletters/weekly-trade/2022/11/28/biden-admin-industry-huddle-on-outbound-investment-order-00070907.

[8] Letter from Robert P. Casey, Jr., et al to President Joseph R. Biden (September 27, 2022), available at: https://www.casey.senate.gov/imo/media/doc/letter_to_president_biden_on_outbound_investment_executive_action2.pdf.