US proposes control of foreign land sales near 8 more military bases

Additions will include the Grand Forks Air Force Base in North Dakota, which is close to a now-cancelled Chinese agriculture project that stirred controversy
The Committee on Foreign Investment in the United States can review the terms of foreign purchases or leases within 100 miles of sensitive installations

US-China relations

Robert Delaneyin Washington

Published: 4:42am, 9 May 2023

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Foreign companies and individuals will be required to get US government approval to acquire real estate near a growing number of domestic military bases – including one near an agricultural project in North Dakota that stirred controversy because of Chinese ownership – if a new federal proposal takes effect.

The inter-agency Committee on Foreign Investment in the United States (CFIUS) on Friday proposed adding eight military installations to a list of 40 others deemed sensitive enough that the terms of any purchases or leases by foreign entities within a 100-mile (160-kilometre) radius be reviewed.

The additions include the Grand Forks Air Force Base in North Dakota, which is less than 15 miles west of a now-cancelled US$700 million agribusiness facility that was to be built by Fufeng USA. The US Air Force and Grand Forks officials halted the project in February because of concerns that it posed a national security threat.

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Grand Forks municipal officials approved the project in early 2022, expecting that it would help create some 700 jobs and bring in as much as US$1 million in annual property tax revenue. But it ran into trouble after some residents expressed worries about Fufeng’s ties to Beijing; it is owned by a conglomerate based in Shandong province.

Other military installations CFIUS wants added to the list include Air Force bases in Palmdale, California; Abilene, Texas; and Glendale, Arizona.

The US Treasury Department’s office of investment security, which coordinates CFIUS’s operations, said the additional bases “were determined by the US Department of Defense based upon an evaluation of national security considerations”.

“The Department of Defense will continue on an ongoing basis to assess its military installations and the geographic scope set under the rules to ensure appropriate application in light of national security considerations,” it added.

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The Treasury Department is taking public comments on the proposed expansion until June 5.

Concerns about Chinese espionage has dominated the agendas of Congress as well as many of the US government’s most powerful departments, including the Pentagon, following advances in the Chinese military’s technical capabilities in recent years.

Issues under scrutiny range from the security of user data on the popular video-sharing app TikTok, which is owned by China’s ByteDance, to possible intelligence gathering by a Chinese surveillance balloon that the US shot down days after it entered US airspace.

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CFIUS, which draws input from the Department of Homeland Security as well as the Pentagon, was given expanded powers in 2019, including the ability to retroactively unwind asset sales to foreign investors and a widening of the scope of transactions over which it has jurisdiction.

“The Fufeng Group acquisition highlighted concern over possible gaps in CFIUS jurisdiction – and the proposed rule indicates that CFIUS is not only aligned with the Air Force concerning this matter, but saw the need to add another seven bases to the … list of highly sensitive installations and other sites,” the New York-based law firm Stroock said in a note on Monday.

The firm said it expected the proposed rule change to “almost certainly become final soon”.

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