The US Treasury Department has announced a final rule that will allow the Committee on Foreign Investment in the US (CFIUS) to look into real-estate sales within one mile of 40 designated installations and within 100 miles of 27 others.

The decision follows a review that began in July that was prompted in part by fears of Chinese nationals and companies buying property around US military sites.

Focus on the issue grew this year after President Biden ordered MineOne Partners, a crypto company principally owned by Chinese nationals, to sell real estate located within a mile of a Wyoming nuclear missile base. The transaction hadn’t been filed with CFIUS, and officials only learned of it from a member of the public informing the watchdog of the transaction, according to the administration.

Once in place, the rule “will allow us to deter and stop foreign adversaries from threatening our armed forces, including through intelligence gathering,” Treasury Secretary Janet Yellen said.

The new rule expands the authority CFIUS currently has, enabling it to recommend that the president block or unwind a deal or real-estate transaction over national-security concerns. And these expanded powers come as US-China competition and friction in a number of industry sectors has ramped up, with the administration taking strides to address it through export controls, especially those covering particular technologies.

Corporate ownership

As part of this US election cycle, the voices opposing Chinese ownership of US farmland have grown louder, thanks largely to national security concerns, not just purely competitive edge ones.

CFIUS has generally focused on corporate deals, but few companies could agree on what Chinese ownership really means, or which aspect of that ownership is bad for the US, even when the property was close to US military installations.

The issue seemed to not only linger, but grow, prompting more calls for addressing it. Over the past four decades, Chinese companies and investors have bought up land in the country and purchased major food companies like Smithfield Foods, the largest pork processor in the US.

Expanding the committee’s authority to encompass real-estate transactions near military bases and other sensitive sites gives the government the ability to block adversaries from such purchases that would make it easier to spy or launch attacks on infrastructure, CFIUS says.

The new rule will take effect 30 days following publication in the Federal Register – so in approximately a month.