US Treasury to expand security reviews for land deals near military bases

FILE PHOTO: The Treasury Department is pictured in Washington

By David Lawder

WASHINGTON (Reuters) -The U.S. Treasury on Monday announced a major expansion of its security review authority over foreign purchases of real estate near American military bases, adding a net total of 56 facilities across 30 states to its review list.

A U.S. Treasury official said the department's notice of proposed rule-making would expand the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS) to about 227 military installations.

The expansion comes less than two months after a previous CFIUS review handed a Chinese-linked company and its partners 120 days to sell property they had purchased one mile from a U.S. Air Force base in Wyoming that is home to part of the U.S. nuclear missile arsenal. MineOne Partners had said it planned to use the property near Cheyenne, Wyoming for cryptocurrency mining.

The U.S. has become increasingly concerned about the national security risks posed by Chinese-linked purchases of property near sensitive military sites. A 2018 law expanded CFIUS' authority to review foreign acquisitions of some non-controlling investments in U.S. real estate transactions that pose national security concerns.

The proposed rule announced on Monday would expand CFIUS' jurisdiction over land deals within one mile of 40 additional military sites and within 100 miles of 19 additional military installations.

Eight facilities previously under CFIUS review jurisdiction would move from the one-mile radius to the 100-mile radius, while three facilities would be removed because they would be covered by other designations.

The Treasury official said the rule would be the largest expansion of CFIUS' review authority since the 2018 law was enacted.

"This latest update vastly expands the reach of CFIUS' real estate jurisdiction while maintaining its sharp focus on national security," the official said.

Among installations added to the 100-mile radius for CFIUS reviews of foreign property purchases are Whiteman Air Force Base in Missouri, which houses the only squadron of nuclear-capable B-2 stealth bombers, and Barksdale Air Force Base in Louisiana, which houses B-52 bombers.

Malmstrom Air Force Base in Montana, which houses nuclear missile squadrons, was moved to the 100-mile radius review category from the one-mile category.

BATTERY PLANT COMPLICATIONS

Also added to the 100-mile radius list is Camp Grayling in Michigan, a National Guard training base. But the designation could complicate a Chinese company's planned $2.36 billion electric vehicle battery components plant that would be located within 100 miles of Camp Grayling.

China's Gotion was expected to create 2,350 jobs producing cathode and anode material at the Big Rapids, Michigan plant, even as the Biden administration seeks to develop a home-grown supply base for electric vehicles and batteries.

A diverse array of facilities were added to the one-mile radius review category, including the Scranton Army Ammunition Plant, which makes 155-millimeter artillery shells, including for Ukraine, several radar sites in Alaska and Scott Air Force Base near St. Louis, headquarters of the Air Mobility Command.

(Reporting by David Lawder; Editing by Andrea Ricci)