50 U.S.C. § 4566: Prohibition on purchase of…

Summary

Companies controlled by a foreign government must not merge with, buy, or take over certain U.S. businesses. The rule covers U.S. companies that either are working on a Defense Department contract or an Energy Department national security contract that needs access to specially restricted information, or that received more than $500,000,000 in Defense prime contracts or more than $500,000,000 in Energy national-security prime contracts in the previous fiscal year. The ban does not apply if the deal is not suspended or blocked under section 4565. “Entity controlled by a foreign government” means an organization or person owned, controlled, or acting for a foreign government as the President decides. “Proscribed category of information” means the kinds of sensitive information the Secretaries of Defense or Energy say cannot be shared with such entities; the departments will define those categories in rules.

Title 50, §4566

War and National Defense, Source: USLM XML via OLRC

(a)In general

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)Inapplicability to certain cases

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)Definitions

In this section: (1)

(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