Thu, Oct 05, 2017 - Page 10 News List

Schumer urges caution in sales of US firms to China


Foreign takeovers of US companies that control Americans’ personal information should be scrutinized for risks to national security and possibly blocked, US Senate Minority Leader Chuck Schumer is planning to tell US President Donald Trump’s administration as it reviews a batch of Chinese deals.

Schumer, a Democrat from New York, was scheduled to send a letter to US Secretary of the Treasury Steven Mnuchin yesterday urging the administration to closely scrutinize acquisitions that give overseas investors access to personally identifiable and sensitive financial information about Americans, including those in the military.

The warning was prompted by the Equifax Inc breach and the pending sale of money-transfer service MoneyGram International Inc to Ant Financial Services Group (螞蟻金服) of China, according to a person familiar with the matter.

“Such information could provide a foreign government with access to information that could be used for intelligence or other purposes adverse to US interests, and thus deals that would convey such data must be closely scrutinized,” Schumer said in a draft letter that was obtained by Bloomberg News.

Chinese takeovers of US companies have prompted warnings from Capitol Hill about risks to national security.

Trump, citing the need to protect US security, last month blocked the sale of Lattice Semiconductor Corp to a buyer funded by a Chinese state-owned entity.

Foreign takeovers of US businesses are reviewed by the Committee on Foreign Investment in the US (CFIUS), which is headed by the Treasury Department and includes officials from the departments of defense, state and commerce.

The panel, which can impose changes to deals to protect national security or recommend that the president block them, is reviewing the MoneyGram deal.

Schumer is not the first lawmaker to raise concerns about the proposed sale to Ant Financial.

Last spring, two members of the US House of Representatives said the acquisition would give China access to the financial infrastructure of the US.

The takeover would potentially allow “malicious actors” to obtain data on US military personnel and their families who use the service, the lawmakers said.

Ant has disputed assertions that US security would be compromised by the deal, citing its plans to keep MoneyGram’s headquarters, management team and employees in Dallas, Texas. The company said MoneyGram’s servers — and the data stored on them — would also remain in the US.

“We are not commenting on the CFIUS process, but we are continuing to work with the various regulatory agencies,” Ant Financial said in a written statement.

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