Byline: Ikram Sehgal
The economic weapon is among the most powerful assets that any government possesses in protecting national security. Greater scrutiny is accorded to economic transactions involving strategic assets: the US government has enacted laws to protect a wide range of 'Strategic Assets', those include American farmland, airlines, telecommunications, and defence-related corporations from what it considers adverse foreign investment. A legal infrastructure arms the US government with the tools necessary to protect their national security interests and to secure their nation's strategic assets. The US Exon-Florio Amendment (Exon-Florio) lies at the center of the U.S. government's foreign economic investment controls. As an amendment to the Defence Production Act of 1950, Exon-Florio was enacted in1988 as part of the Omnibus Trade and Competitiveness Act "as a national security filter on FDI".
The 1993 Defence Authorization Act known as Byrd Amendment by requiring evaluation of the potential effects of a transaction, expanded the scope of national security factors for consideration and laid the foundation for the consideration of thirdparty transactions. Immediate report to Congress whether or not action is taken following an investigation, as well as a Quadrennial Report detailing any credible evidence of either industrial espionage or a coordinated attempt by either foreign countries or companies to usurp American control over leading sectors of technology. Airline industry is a symbolic national asset, under Aviation Act of 1958, only U.S. citizens may offer domestic air service within the United States. Historically, American farmland has also been the subject of legislative protectionism because of the perceived symbolic and strategic value of land. In fact, by 1979, 'Foreign ownership of farmland had been restricted in 20 states, and... the U.S.
Congress [had] approved legislation that would require foreign investors to report all purchases or long-term leases of American farmland to the Secretary of Agriculture.' - rather a symbolic concern. Legislation prohibiting foreign ownership has existed since 1934, The 1996 Act's categorical prohibition against foreign ownership and strict regulation of corporate involvement reflects "the intent of Congress to inject a national security consideration into the international telecommunication business transaction.' The 1996 Act flatly prohibits foreign nationals and foreign companies...