For but one illustrative example, what parameters should be put in place to address situations like the CISCO hardware sale to build Golden Shield, when Golden Shield’s purpose is to censor democracy – i.e. disrupt free and unfettered information flow. Democracy in China is in the United States’ economic (and national) security interests. Therefore, any U.S. corporation supporting efforts like Golden Shield would seem not. In the same theme, efforts by companies to create Chinese infrastructure and expertise such as Microsoft helping the Chinese government build a banking software industry should be scrutinized too.
8) Add a CIC (SAFE) and Russia (CIC Equivalent) Trigger(s):
A separate and distinct triggering provision if China Investment Corp and/or SAFE or “any” (degrees of separation) affiliate whatsoever is involved in the deal/transaction and/or information grab (i.e. transferable/derivative sophisticated U.S. universities endowment management/investment expertise et al), irrespective of deal size or published intent.
The theme should be:
“CIC is SAFE, and SAFE is CIC, and therefore neither is safe to U.S./WEAST national/economic security interests.”
Author’s Note: On Feb. 1, 2008 Russia set up its own Sovereign Wealth Fund (SWF). Actually broken up into two. Russia’s accumulated and growing rapidly $157 billion foreign exchange reserves will be divided between the “Reserve Fund ($125 billion)”, and the “Fund for National Well Being”, initially funded at $32 billion. Note again the relative significance, as the collective sum is comparable to the value of gold at Fort Knox, and the U.S. has no SWF.
Also of note, a Feb. 7, 2008 CNN.com article highlights the European Union’s concern with this development, specifically citing “A top European finance official has criticized Russia for restricting foreign investment even as it looks to pump its own energy revenues into overseas companies, a newspaper reported Thursday…....It is unacceptable that while Russia's government-affiliated fund is sweeping into Europe, European companies are in a situation where they are unable to do similar activities in Russia," Luxembourg Finance Minister Jean-Claude Juncker told Japan's Asahi Shimbun.”. The Analyst would add the same lack of reciprocity and transparency exists in China’s related efforts.
Final Note: Recall the efforts noted previously as respects Russia to destabilize the new eastern European NATO countries. Funding comes from somewhere. Is it from these reserves? One can easily argue yes.
9) An extension to 8) above to include any other Sovereign Wealth Funds or related funding sources involved from or deemed “hostile and or terror harboring countries”.
10) Add and imbed “U.S. economic security/sovereignty” into the “national security” concept/definition.
11) CFIUS linked directly into the new “Central Intelligence Command” (see D below), rather than a lone DNI (i.e. currently equivalent to “a man without a country”).
The Director of National Intelligence (DNI) is currently the Intelligence Community’s (IC’s) link into CFIUS and vice versa. However, given the dysfunctional reporting relationships and lack of unified command and control structure across the fragmented Intelligence Community (IC), the NDI is a paper, not substance position. Upon creating the Central Intelligence Command (CIC), the DNI, presumably as its leader, than brings substantive value to FINSA/CFIUS because that position now has real integrated authority and responsibility for the entire Intelligence Community (Command).
12) Conduct an in-depth review to analyze the serious national security impact and move formally these fringe activities under FINSA:
a) Passport Production - Outsourcing U.S. passports production to foreign entities – currently Thailand. The U.S. certainly wouldn't do that with currency production.
b) Geographic shifting of a company’s R&D to a hostile country – e.g. 3Com considering doing with Tipping Point R&D to China.
c) QDII China Investment – China can now directly acquire U.S. company’s shares in the open market. Provides a new way for China and other Commulist countries to bypass FINSA.
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