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GGD-92-12R 1 (1992-07-01)

handle is hein.gao/gaobackcc0001 and id is 1 raw text is: 



             United States
GAO          General Accounting Ofice
             Washington, D.C. 20548

             General Government Division


             B-234511                                       l I IUI



             July 1, 1992                                       147092


             The Honorable John D. Dingell
             Chairman, Subcommittee on Oversight
               and Investigations
             Committee on Energy and Commerce
             House of Representatives

             Dear Mr. Chairman:

             As you requested, we have assessed federal agency responses
             to two of our reports to you: Foreign Investment: Concerns
             in the U.S. Real Estate Sector During the 1900s (GAO/NSIAD-,
             91-140, June 4, 1991) and Foreign Investment: Analyzing
             National Security Concerns (GAO/NSIAD-90-94L Mar. 29,
             1990). This letter summarizes our assessment.

             COMMENTS ON THE REAL ESTATE REPORT

             The comments of the Departments of Commerce and Treasury on
             our report on foreign direct investment in the U.S. real
             estate sector are discussed below. You also requested that
             we obtain the viewpoints of the Departments of Agriculture
             (USDA) and Housing and Urban Development (HUD) on the
             issues raised in our report.

             Commerce Department Comments

             The Commerce Department's September 4, 1991, response to
             our real estate report covered three different items:

             1. Cost of capital. In his letter, then-Secretary
             Robert A. Mosbacher stated that whether Japanese buyer's
             have a cost-of-capital advantage over U.S. buyers is a
             complex issue, and cannot be judged solely on the basis of
             differential interest rate charges on yen and dollar-based
             loans. Effective tax rates, expected rates of inflation,
             and differing accounting rules and financial regulations
             must also be taken into account.




             GAO/GGD-92-12R Foreign Direct Investment

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