U.S. finalizes rule to review more foreign land deals near military bases

By Alexandra Alper and David Shepardson

WASHINGTON (Reuters) – The Biden administration on Friday finalized a new rule expanding its authority to review foreign purchases of real estate near U.S. military bases for national security threats.

WHY IT’S IMPORTANT

The U.S. has become increasingly concerned about the national security risks posed by Chinese-linked purchases of property near sensitive military sites.

BY THE NUMBERS

The Treasury Department rule, which was first proposed in July, adds nearly 60 facilities across 30 states to its review list and would expand the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS) to about 227 military installations.

KEY QUOTE

Treasury Secretary Janet Yellen said the final rule “will significantly increase the ability of CFIUS to thoroughly review real estate transactions near bases and will allow us to deter and stop foreign adversaries from threatening our Armed Forces, including through intelligence gathering.”

CONTEXT

CFIUS, led by the Treasury Department, reviews foreign investments in the United States for national security risks.

Treasury rejected a push to retroactively apply the rule to a proposed battery plant by Gotion in Michigan. Germany’s Volkswagen AG (OTC:) is the largest single shareholder of parent company Gotion High-Tech, but Republican lawmakers say China maintains “effective control” through multiple individual shareholders.

The rule will take effect in December.