April 29, 2006
CFIUS and Dubai in the News Again
President Bush approved a CFIUS recommendation to approve a takeover of a British company by a Dubai stated owned company. Sound familiar? The Dubai company is Dubai International Capital and the British company is Doncasters Group, which owns nine United States facilities. Several of the United States factories supply critical parts for military vehicles and aircraft; high-tech turbine fan blades for engines, for example. CFIUS did the full 45 day review and the President, per the formal review, informed Congress of his decision. Congress did not balk. Those in Congress, who criticized the Dubai Ports World acquisition of a British company that operates several United States port facilities, approved this deal and took pains to justify their lack of opposition. Sen. Charles Schumer, for example, noted the difference in procedure and that this was " a product" not a "service." "The opportunity to Infiltrate and sabotage is both more difficult and more detectable," he noted. Both distinctions do not make much sense. Procedure did not matter in the Ports World acquisition -- a offer to do a 45 day review was met with derision and a House resolution to block the deal regardless. The supply of turbine fan blades could be constricted and the technology stolen. I suspect that members of Congress recognize that they cannot seriously upset a valuable global trading partners such as Dubai; a little grandstanding for the folks at home will be tolerated by Dubai as long as Congress does not make a habit of it.
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