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Illustration: Lazaro Gamio/Axios

Both the Senate Banking Committee and the House Financial Services Committee yesterday approved bills to strengthen the Committee on Foreign Investment in the United States (CFIUS).

The big picture is that Congress wants to make it harder for Chinese companies and its government to access critical technology and infrastructure. It will certainly slow down cross-border M&A (if not reduce it), and make some U.S. investment firms less likely to accept co-investment from China.

The details: There are some differences between the two, but the Senate one is more comprehensive and is expected to mostly carry the day.

  • The Senate legislation isn't explicitly about China, but make no mistake: It is all about China.
  • The bill has bipartisan support, and the only possible monkey wrench could be if China raises loud objections during the ongoing trade negotiations.

Digging down, there are two big groups of exemptions: The first relates to exempted countries — which is expanded from earlier drafts and is designed to prevent CFIUS from getting drowned in a flood of applications:

  • NATO countries are exempted
  • Major non-NATO allies, including Israel and Japan, are exempted
  • Countries with special security relationships to the U.S., such as Singapore, could be exempted by future rule-making.

The other exemption is for "passive investments," which includes three main requirements:

  • Investor cannot have board or board observer rights.
  • Investor cannot have access to non-public technical information (this is tightened from an earlier version that included such things as access to product road-map).
  • Investor cannot have any say in company operations outside of normal shareholder votes.

There also is a specific clarification that effectively permits limited partnership in investment funds, save for some unusual circumstances.

One sticky issue remains the specific definition of "critical technology and infrastructure," and the centrality of that technology to a company's business. For example, what if an e-commerce company uses proprietary AI technology to analyze customer sentiment, or robotics in its fulfillment process? Does it count?

This leads to the bottom line: Rule-making from Treasury will become as important as the final legislative language.

Go deeper

Advocates fret Roe v. Wade's 49th anniversary could be its last

Photo: Leigh Vogel/Getty Images for Women's March Inc

As Saturday marks the 49th anniversary of Roe v. Wade, the Supreme Court's landmark decision that legalized abortion access in the U.S., advocates warn the ruling is "more at risk now than ever."

The big picture: The Supreme Court in December heard a challenge to a Mississippi 15-week abortion ban that could throw Roe's survival into question, or at least narrow its scope.

Updated 9 hours ago - Politics & Policy

Omicron dashboard

Illustration: Brendan Lynch/Axios

  1. Health: Pfizer and Moderna boosters overwhelmingly prevent Omicron hospitalizations, CDC finds — Omicron pushes COVID deaths toward 2,000 per day — The pandemic-proof health care giant.
  2. Vaccines: The case for Operation Warp Speed 2.0 — Starbucks drops worker vaccine or test requirement after SCOTUS ruling — Kids' COVID vaccination rates are particularly low in rural America.
  3. Politics: Biden concedes U.S. should have done more testing — Arizona says it "will not be intimidated" by Biden on anti-mask school policies — Federal judge blocks Biden's vaccine mandate for federal workers.
  4. World: American Airlines flight to London forced to turn around over mask dispute — WHO: COVID health emergency could end this year — Greece imposes vaccine mandate for people 60 and older — Austria approves COVID vaccine mandate for adults.
  5. Variant tracker

Arizona governor sues Biden administration over COVID funds tied to mandates

A teacher prepares a hallway barrier to help students maintain social distancing at John B. Wright Elementary School in Tucson, Arizona, on Aug. 14, 2020. Photo: Cheney Orr/Bloomberg via Getty Images

Arizona Gov. Doug Ducey (R) filed a lawsuit Friday against the Biden administration for ordering the state to stop allocating federal COVID relief funds to schools that don't comply with public health recommendations such as masking, the Arizona Republic reports.

Why it matters: The Treasury Department said last week that the state would have to pay back the money if Ducey does not redesignate the $173 million programs to ensure they don't "undermine efforts to stop the spread of COVID-19."

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