U.S. Urges Israel to Vet Foreign Investment Amid China Concerns

(Bloomberg) -- The U.S. is concerned about foreign investment in Israel, particularly from China, and wants the country to put in place a vetting process for such transactions.

Ahead of meetings with Energy Minister Yuval Steinitz and the head of Israel’s cyber directorate, U.S. Deputy Secretary of Energy Dan Brouillette told reporters Tuesday in Tel Aviv that Israel should take "aggressive steps" to check foreign investment. Otherwise, he said, potential vulnerabilities in Israeli infrastructure could put intelligence sharing with the U.S. at risk.

"We know that the the threat is growing each and every day," Brouillette said. “We’re going to share our experiences with China and let folks know that we have concerns with certain activities that we see coming out of China, specifically certain companies."

The concern about Chinese investment comes amid an escalating trade war between the Trump administration and the Asian export giant. Brouillette said the U.S. would be willing to help Israel’s government adopt a similar regime to CFIUS, the inter-agency Committee on Foreign Investment in the U.S.

"We evaluate foreign investment in the United States very very closely. We would hope that Israel would adopt a similar approach,” Brouillette said.

The remarks came after U.S. National Security Adviser John Bolton visited Israel earlier this month. Bolton was expected to discuss concerns around Chinese investment and technology penetration in Israel, in particular around Huawei Technologies Co. and ZTE Corp., and about Chinese investment in the Port of Haifa, which has hosted the U.S. Sixth Fleet.

Other U.S. officials likely will come to Israel to help set up a process to screen foreign investment, particularly from the Treasury Department, which leads the U.S. vetting process, Brouillette added.

Israeli Prime Minister Benjamin Netanyahu’s office declined to comment.

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