US to Expand Scrutiny of Foreign Investments Near Military Bases

(Bloomberg) -- The US Treasury Department will expand its scrutiny of foreign investments near military bases to counter suspected security threats from China and other countries.

The proposed rule “will significantly expand” the jurisdiction of a special government panel that reviews foreign purchases of US companies and real estate, Treasury Secretary Janet Yellen said in a statement on Monday. 

The Committee on Foreign Investments in the US, which is led by Treasury, has the power to review, block or place restrictions on foreign purchases of real estate near sensitive military installations, citing fears of surveillance and espionage.

The move would add more than 50 bases in 30 US states to the list of areas under scrutiny, according to a senior Treasury Department official, who requested anonymity to discuss internal deliberations. That would bring the total number of bases under investment security reviews to 227.

The expansion comes almost two months after President Joe Biden took the rare step of ordering a Chinese company to sell a property it purchased near a Wyoming Air Force base that houses intercontinental ballistic missiles.

Cfius reviews of real estate transactions are country-agnostic and take into account threats, vulnerabilities and national security consequences, the Treasury official said.

China accounted for the majority of all transactions reviewed by Cfius from 2020 to 2022, according to a 2023 Treasury report. A 2023 assessment by the Office of the Director of National Intelligence identified economic, industrial and cyber espionage by China, Russia, Iran and North Korea as a “significant threat to US prosperity, security and competitive advantage.”

The new rule is “a significant milestone in safeguarding critical U.S. military installations,” said Paul Rosen, Treasury’s assistant secretary for investment security, in a statement. Rosen added that Treasury, the Pentagon and other Cfius members “remain responsive to the evolving nature of the risks we face to ensure we are protecting our military installations and related defense assets.”

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