NATIONAL SECURITY FOREIGN INVESTMENT REFORM AND STRENGTHENED TRANSPARENCY ACT OF 2006 -- (House of Representatives - July 26, 2006)
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Mr. BACA. Mr. Speaker, I rise in strong support as a cosponsor of H.R. 5337, National Security Foreign Investment Reform and Strengthened Transparency Act of 2006.
This legislation clarifies and strengthens the authority of the Committee on Foreign Investment in the United States to ensure that foreign acquisitions of U.S. companies or assets do not threaten national security.
As the tragic events of September 11, 2001 demonstrate, the threats to the security of the United States have increased and evolved in ways that could not have been anticipated when Congress enacted the Exon-Florio provision in 1988. As a result, we can no longer view national security only through the lens of conventional military threats. We must also guard against other types of threats that could seriously harm our Nation such as a disruption of U.S. energy supplies.
With global energy supplies tight, and oil and gas prices skyrocketing, a major disruption of U.S. energy supplies would pose a grave danger to the Nation's economy and the safety and security of the American people. This bill recognizes this fact and includes strong measures to ensure that foreign takeovers of U.S. energy companies or assets do not threaten the energy security of the United States.
The Committee's Report states: ``H.R. 5337 makes clear that national security encompasses threats to critical U.S. infrastructure, including energy-related infrastructure. The Committee expects that acquisitions of U.S. energy companies or assets by foreign governments or companies controlled by foreign governments will be reviewed closely for their national security impact. If such acquisitions raise legitimate concerns about threats to U.S. national security, appropriate protections as set forth in the statute should be instituted including potentially the prohibition of the transaction.''
Russia is a perfect example. Russia has made it clear that it wants to acquire pipelines and natural gas conversion facilities in the United States. I strongly believe, however, the United States should tread very carefully before permitting such acquisitions. Here's why.
In 2003, Russian President Vladimir Putin reasserted government control over Russia's energy industry through the expropriation of Russia's largest privately-owned energy company, Yukos, without paying any compensation to its owners, including U.S. shareholders who lost approximately $6 billion.
As a result, Russian energy companies such as Gazprom and Rosneft are controlled by friends and associates of Putin, including individuals who occupy high level positions in the Putin Administration. Putin appears to be using these companies to implement his strategy of using Russia's oil and gas exports as an instrument of political and economic coercion to advance the interests of the Kremlin. If these Russian government-controlled companies gain control of U.S. energy assets, U.S. energy security could easily be put at risk just as was the case when Russia cut off natural gas supplies to Ukraine in January, and later this spring, when Gazprom not-so-subtlety warned European leaders that Russia would sell its natural gas to Asia instead of Europe if they tried to interfere in Russia's plans to control the entire sales and distribution of natural gas throughout Europe.
Mr. Speaker, this would be a disaster for America. We must not let this happen to the United States.
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