The U.S. is tightening its scrutiny of foreign land purchases near military installations due to growing concerns over Chinese espionage. The U.S. administration, through an executive order in May, shut down a Chinese-owned firm, MineOne Partners Ltd., near Warren Air Force Base in Wyoming as an action taken due to concerns for national security risks posed by foreign land acquisitions.
On Monday, the U.S. Treasury Department proposed expanding the Committee on Foreign Investment in the United States (CFIUS) authority to review real estate transactions near military bases. This proposal would increase the number of sites under CFIUS jurisdiction from 171 to 227, adding 56 more military sites across 30 states. The new rule aims to prevent potential espionage and intelligence collection by foreign entities.
The heightened vigilance follows reports of Chinese investors making significant land purchases near sensitive military locations, such as Laughlin Air Force Base in Texas and Grand Forks Air Force Base in North Dakota. Treasury Secretary Janet Yellen emphasized the administration’s commitment to using investment screening tools to safeguard national security.
CFIUS’s expanded oversight is a direct response to these threats, with the proposed rule allowing for a broader review of land transactions within one mile of 40 designated military sites and within 100 miles of 19 other sites.
Federal legislation to limit foreign land purchases near military bases has faced obstacles, but state governments have taken independent actions. For instance, Florida passed a law banning citizens from countries like China, Russia, and Iran from buying property near military sites and critical infrastructure. This law, however, faces legal challenges for being potentially discriminatory.
Concerns over foreign land purchases near military installations date back to at least 2012, when the Obama administration revoked a Chinese company’s acquisition of wind farms in Oregon due to surveillance concerns. More recently, the Biden administration ordered MineOne Partners to divest from land near Wyoming’s Francis E. Warren Air Force Base, citing the potential for surveillance and espionage.
Despite the low probability of espionage, the potential consequences necessitate a cautious approach. The expanded CFIUS authority aims to mitigate these risks by ensuring thorough reviews of such transactions. If the proposed rule passes, it will mark the most substantial expansion of CFIUS’s authority since 2018.
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