May 21, 2019

May 20, 2019

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Senators Introduce Bipartisan Legislation to Protect American Agricultural Interests in Foreign Acquisitions

  • By way of background, foreign governments have recently made substantial investments in U.S. agriculture. Most notably, Smithfield’s sale to Chinese firm Shuangui, Syngenta’s acquisition by Chinese-government owned group ChemChina and Bayer’s proposed acquisition of Monsanto.  Transactions such as these are reviewed by the Committee on Foreign Investment in the United States (CFIUS), a panel of government officials tasked with reviewing proposed mergers and acquisitions of U.S. companies, including foreign entities seeking to purchase U.S. agricultural and food assets. CFIUS determines whether or not transactions initiated by foreign entities threaten to impair U.S. national security interests. Currently, CFIUS does not include permanent representation from the U.S. Department of Agriculture (USDA) or the U.S. Department of Health and Human Services (HHS).

  • On March 14, 2017, U.S. Senators Chuck Grassley (R-Iowa) and Debbie Stabenow (D-Mich.) introduced new bipartisan legislation to give senior USDA and HHS officials permanent representation on the CFIUS. The “Food Security is National Security Act of 2017” would also require that CFIUS consider new agriculture and food-related criteria when reviewing transactions that could result in control of a U.S. business by a foreign company.

  • In introducing the legislation, Sen. Stabenow noted: “Protecting the integrity, safety, and resiliency of America’s food system is core to our national security . . . As foreign entities continue their aggressive acquisitions of U.S. food and agriculture companies, it’s imperative that these transactions face additional scrutiny. This bill ensures that the U.S. has the appropriate tools and people in place to safeguard America’s food security, food safety, biosecurity, and the highly competitive U.S. farm sector as a whole.”

  • No companion legislation has been introduced in the U.S. House of Representatives to date, but there appears to be some appetite for doing so.  We will continue to monitor any developments on the proposed legislation.

© 2019 Keller and Heckman LLP

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Keller and Heckman offers global food and drug services to its clients. Our comprehensive and extensive food and drug practice is one of the largest in the world. We promote, protect, and defend products made by the spectrum of industries regulated by the U.S. Food and Drug Administration (FDA), the European Commission and Member States authorities in the European Union (EU) and similar authorities throughout the world. The products we help get to market include foods, pharmaceuticals, medical devices, veterinary products, dietary supplements, and cosmetics. In addition...

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