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13 Harv. Nat'l Sec. J. 1 (2022)

handle is hein.journals/harvardnsj13 and id is 1 raw text is: ESSAY CFIUS PREEMPTION Kristen E. Eichensehr* ABSTRACT Spurred by concerns about a Chinese-owned wind farm, Texas recently enacted the Lone Star Infrastructure Protection Act to prohibit companies and Texas governmental entities from entering into agreements relating to critical infrastructure with companies that have certain ties to China, Iran, North Korea, or Russia. The Texas statute presents an opportunity to consider the preemptive scope of the federal Committee on Foreign Investment in the United States (CFIUS) process, which reviews inbound foreign investments for national security concerns, takes steps to mitigate risks, and occasionally blocks transactions through presidential action. This Essay argues that when state laws, like the Texas statute, purport to apply to areas within CFIUS's jurisdiction, they pose an obstacle to the federal process and are subject to preemption. However, the Essay also proposes ways to channel state concerns and local knowledge into the CFIUS process and render it more like cooperative federalism. CONTENTS IN TROD U CTIO N ............................................................................................. 2 I. REGULATING FOR NATIONAL SECURITY ...................................................3 A. The Texas Statute ...................................................................................3 B. CFIUS ....................................................................................................4 II. FEDERALISM AND FOREIGN INVESTMENT REVIEWS....................................8 III. THE PREEMPTIVE EFFECT OF CFIUS.......................................................13 IV. ALTERNATIVE WAYS TO ACCOUNT FOR STATES' CONCERNS .................21 * Martha Lubin Karsh and Bruce A. Karsh Bicentennial Professor, University of Virginia School of Law. For helpful comments and conversations, I am grateful to David Fagan, Jean Galbraith, Jon Michaels, Saikrishna Prakash, Richard Re, and Paul Stephan. Special thanks are due to Kathryn Boudouris of the UVA Law Library for tracking down sources, to Joshua Goland for excellent research assistance, and to the editors of the Harvard National Security Journal for bringing the piece to publication.

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