§4566 — Title 50 War and National Defense | U.S. Code

Summary

It bans any company controlled by a foreign government from merging with, buying, or taking over a U.S. company that does business across state lines if that U.S. company either works on a Defense or Energy contract that requires access to certain sensitive information, or got more than $500,000,000 in Department of Defense prime contracts or more than $500,000,000 in Department of Energy national security prime contracts in the previous fiscal year. The ban does not apply if the deal is already allowed or not stopped under the separate review process in section 4565. Definitions: "Entity controlled by a foreign government" — an organization or person that is effectively owned, controlled by, or acting for a foreign government. "Proscribed category of information" — categories set by the Secretary of Defense or Secretary of Energy that include special access or other information whose release to such an entity would harm U.S. national security, and that are defined in agency regulations.

Title 50, §4566

War and National Defense — Source: USLM XML via OLRC

(a)No entity controlled by a foreign government may merge with, acquire, or take over a company engaged in interstate commerce in the United States that—

(1)is performing a Department of Defense contract, or a Department of Energy contract under a national security program, that cannot be performed satisfactorily unless that company is given access to information in a proscribed category of information; or

(2)during the previous fiscal year, was awarded—

(A)Department of Defense prime contracts in an aggregate amount in excess of $500,000,000; or

(B)Department of Energy prime contracts under national security programs in an aggregate amount in excess of $500,000,000.

(b)The limitation in subsection (a) shall not apply if a merger, acquisition, or takeover is not suspended or prohibited pursuant to section 4565 of this title.

(c)In this section:

(1)The term “entity controlled by a foreign government” includes—

(A)any domestic or foreign organization or corporation that is effectively owned or controlled by a foreign government; and

(B)any individual acting on behalf of a foreign government,

(2)The term “proscribed category of information” means a category of information that—

(A)with respect to Department of Defense contracts—

(i)includes special access information;

(ii)is determined by the Secretary of Defense to include information the disclosure of which to an entity controlled by a foreign government is not in the national security interests of the United States; and

(iii)is defined in regulations prescribed by the Secretary of Defense for the purposes of this section; and

(B)with respect to Department of Energy contracts—

(i)is determined by the Secretary of Energy to include information described in subparagraph (A)(ii); and

(ii)is defined in regulations prescribed by the Secretary of Energy for the purposes of this section.

Notes & Related Subsidiaries

Editorial Notes

Codification Section was formerly classified to section 2170a of the former Appendix to this title prior to editorial reclassification and renumbering as this section. Section was enacted as part of the National Defense Authorization Act for Fiscal Year 1993, and not as part of the Defense Production Act of 1950 which comprises this chapter.

§4566 Prohibition on Purchase of United States Defense Contractors by Entities Controlled by Foreign Governments

Summary

Title 50, §4566

Notes & Related Subsidiaries

Editorial Notes

Citations & Metadata