House Objects to Senate Proposal to Give SEC Role in Curbing Outbound Investment, Lawmaker Says
A sticking point in House-Senate negotiations over legislation to restrict U.S. outbound investment in China has been a Senate proposal to give the Securities and Exchange Commission a role, a senior member of the House Financial Services Committee said Dec. 10.
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“There were some problems with some of the language that came back from the Senate,” Rep. Andy Barr, R-Ky., told Export Compliance Daily. “They had a weird authorization of a rulemaking from the Securities and Exchange Commission,” which Barr called a “non-starter” with the Financial Services Committee. The committee wants to give new outbound investment responsibilities to the Treasury Department, which already works in that area.
“My view is it needs to be the Department of Treasury,” Barr said. “The SEC should have nothing to do with it.”
Barr, who had been a key player in the outbound negotiations, said the talks are now taking place between the office of House Speaker Mike Johnson, R-La., and the Senate, including the office of Senate Majority Leader Chuck Schumer, D-N.Y., and the Senate Banking Committee. “It’s kind of out of my hands at this point,” Barr said.
Lawmakers were unable to reach a compromise on outbound investment legislation in time to include it in the FY 2025 National Defense Authorization Act, which was unveiled Dec. 7 (see 2412090054). An upcoming continuing resolution that would temporarily fund the government beyond Dec. 20 is now seen as a potential vehicle for outbound restrictions.
The House has tried on its own for most of the year to reach a compromise between two different outbound approaches (see 2410250025). One approach, favored by Barr and Financial Services Committee Chairman Patrick McHenry, R-N.C., would impose restrictions on individual entities, while the other, advocated by House Foreign Affairs Committee Chairman Michael McCaul, R-Texas, would target whole technology sectors.
Although Treasury in late October released a final rule that will restrict U.S. outbound investment in China’s artificial intelligence, quantum and semiconductor sectors (see 2410280043), experts have said that passing a law would make it harder to undo the restrictions and would give Congress a mechanism to conduct much-needed oversight (see 2405240042).