Inbound US acquisitions are generating more heat.

A bipartisan group of US House members asked the Government Accountability Office, the audit arm of Congress, in September to look into how an interagency committee that reviews foreign acquisitions of US companies for national security implications is working.

The 16 House members say they are concerned about the increasing number of acquisitions by state-owned companies in China and Russia.

CFIUS—short for the Committee on Foreign Investment in the United States—is an inter-agency committee of 16 federal agencies, headed by the Treasury Department, that reviews potential foreign investments in US companies for national security concerns. Submission of proposed deals is voluntary. However, the committee has authority to set aside transactions after the fact that were not submitted for review.

The committee makes recommendations. The President has ultimate authority to block a transaction. Presidential action to block a transaction is rare. Most transactions that raise problems are voluntarily withdrawn. Many are later resubmitted on revised terms. In some cases, transactions are approved after the acquirer agrees to mitigation measures.

The 16 House members cited two recent Chinese deals as reason for their concerns. One is the acquisition of Swiss agrichemical giant Syngenta by China National Chemical Corp. CFIUS cleared the transaction in August. Syngenta supplies 10 percent of seeds to US soybean farmers and a fifth of world pesticides. The House members also cited the interest of Dalian Wanda Group in buying one of the big six US film studios. The Dalian Wanda Group already owns 75 percent of AMC Theaters.

At least three Chinese deals were abandoned earlier this year due to fears the acquisitions would not be approved.

The House members asked the Government Accountability Office to consider whether the FBI (Federal Bureau of Investigations) and other agencies should be added to CFIUS, whether tougher screening should be given to acquisitions by state-owned companies from designated countries like China and Russia, and whether there should be mandatory reporting of such acquisitions to CFIUS. They also want to know whether CFIUS should investigate, as part of its review of national security implications, any state subsidies the buyer receives in its home country as part of a national strategic plan to gain access to the US market.