Loophole in new federal rules on foreign land sales could pose national security risk | CPT PPP Coverage

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On Monday, Rep. Greg Murphy, R-NC, said that US military bases and energy facilities are at risk of espionage through land sales to foreign entities. He called for amending federal rules to put further restrictions on such land acquisitions.

Murphy, along with Congressman John Moolenaar, Chairman of the House Select Committee on the Chinese Communist Party (CCP), sent a letter to US Treasury Department Secretary Janet Yellen warning of the risks in her agencies new rules.

“Today, our adversaries are doing everything they can to undermine American sovereignty and security,” said Murphy in a press release. “This includes purchasing land on our soil to use for espionage and other belligerent purposes. While CFIUS coverage includes many military bases and other sensitive areas, US Coast Guard facilities, National Laboratories, some maritime ports, and critical telecommunications and energy infrastructure are not included. This leaves the United States vulnerable to hostile nations and malicious actors.”

On July 8th, the US Treasury Department issued a “Notice of Proposed Rulemaking,” adding over 50 military installations across 30 states to the Committee on Foreign Investment in the United States (CFIUS) jurisdiction, which includes land purchases. However, there is a loophole in the expansion, which puts sensitive sites such as military bases at risk. 

“CFIUS is not currently examining any restrictions on China’s land purchases near Coast Guard hubs and Energy Department labs, giving the CCP room to pivot to these sites as the American government focuses on restricting land buys near military installations,” according to a report from the Washington Free Beacon. 

Lawmakers pointed out that among the sites at risk are Coast Guard facilities and Department of Energy labs. 

“…there still remains significant gaps in our national security screening regime for land purchases near national security sites. Coast Guard facilities, and Department of Energy National Labs, among other locations, remain off CFIUS’s list of sensitive sites and thereby vulnerable to foreign adversary exploitation,” wrote lawmakers. “Furthermore, because CFIUS land purchase regulations are not retroactive, land purchases made prior to a site being listed are exempt from CFIUS review. These loopholes must be closed, and quickly.” 

“Xi Jinping would never allow Americans to buy land next to sensitive Chinese bases,” said Moolenaar in a press release. 

BREAKING: @RepMoolenaar & @RepGregMurphy request that @SecYellen include US Coast Guard bases in her decisions to restrict new foreign land purchases.

“Xi Jinping would never allow Americans to buy land next to sensitive Chinese bases.” — Chairman Moolenaar pic.twitter.com/HXEnAE4fQA

— Select Committee on the Chinese Communist Party (@committeeonccp) September 17, 2024

Experts agree with Moolenaar’s assessment.

“Do you think the Chinese would ever allow an American to own farmland, period, much less near one of their military installations? [T]his is a very complicated issue,” said Randy Russell, agriculture lobbyist and president of The Russell Group, earlier this year, during a panel discussion hosted by the NC Chamber on foreign-owned farmland.  

“Unfortunately, current US policy all too often rolls out the red carpet for CCP land purchases, continued Moolenaar. “We must more effectively use CFIUS to stop our foremost adversary from purchasing US land, particularly CCP-aligned entities like Gotion, which wants to set up shop in my home state.”

The Carolina Journal reported earlier this year that 3.5% of North Carolina farmland is foreign-owned. 

“We cannot allow bad actors to purchase land in America to harm us,” continued Murphy in the letter. “I’m grateful for the support of Chairman Moolenaar in recognizing our current security shortcomings and urge Secretary Yellen to consider these recommendations as the Department of the Treasury finalizes its proposed rule to expand CFIUS coverage.”