On November 2, 2017, Representative Christopher Smith (R-NJ), introduced a bill that would “authorize a review of financial services industry requirements of the People’s Republic of China and the implications of such requirements on national security interests of the United States.” (H.R. 4235, 115th Congress, Nov. 2, 2017). The bill would require the Secretary of the Treasury, in consultation with the Secretary of Defense, the Secretary of Commerce and the Secretary of Homeland Security, to report on national security threats and vulnerabilities from acquisitions of US financial services businesses by Chinese interests. (Id., § 1).
The bill would specifically require a review of US financial services businesses having (1) “access to personal financial information of United States military service members or Federal employees or contractors holding security clearances who utilize such company’s United States locations to make a money transfer or other form of payment”; and, (2) “access to personal financial information of customers who are using one of such company’s United States locations to make a money transfer or other form of payment.” (Id., § 1(a)(1)-(2)). It would further require the agencies to examine whether China offers reciprocal “access to and investment in financial markets,” and “to determine whether a United States domestic corporation would be permitted to purchase, acquire, merge, or otherwise establish a joint relationship with an entity whose primary place of business is in the People’s Republic of China.” (Id., § 1(a)(4)-(5)).
Under the proposed legislation, the Secretary of the Treasury must report to the President and Congress the findings of this review within 90 days. (Id., § 1(b)). Until such time as the report is submitted to the President and Congress, the bill provides that “the Committee on Foreign Investment in the United States shall not conclude a national security review or investigation related to the acquisition of a United States domestic corporation that provides money transfer or payment processing services by an entity organized, incorporated, or whose primary place of business is in the People’s Republic of China.” (Id., § 1(c)).