Research On Legal Issues Of National Security Review In China’s Foreign Investment Supervision

With the further deepening of the reform of foreign investment fields and the new foreign investment management mode with pre-establishing national treatment plus negative list is formally established in China,putting on a record instead of strict approval becomes the main form of foreign investment access review.Under that background,national security review becomes an important approach to prevent national security threats.At present,China’s national security review mechanism was established under the background of the foreign investment approval system.Extensive foreign investment access review largely replaces the national security review mechanism and takes charge in function of preventing national security threats.It not only makes the national security review useless,but also slows down the improvement of review mechanism.With the transformation of the supervision of foreign investment from approving to put on a record,the ability of foreign investment access review mechanisms for preventing security risks has been greatly reduced.Under the new model of foreign investment management,it becomes the development direction that national security review becomes the center and coordinated with foreign investment access review and anti-monopoly review.First,this paper analyzes the concept of national security and the ways that countries to regulate national security risks in foreign investment fields,and compares the performance of national security review under different regulatory models.Pointing out that under the new foreign investment supervision model,independent national security review is the main tool for preventing national security risks in foreign investment fields in the future.Second,carrying on research on "2011security review rules of mergers and acquisitions by foreign investors","Tentative Measures for the National Security Review of Foreign Investment in Pilot Free Trade Zones" and national security review in "Foreign Investment Law"(draft),pointing out the existing problems which including: national security review and foreign capital mergers and acquisitions economic security applications are duplicative,the review mechanism lacks connection with foreign investment access review and anti-monopoly review,the national security review mechanism itself has problems such as incomplete review types,inappropriate review subjects,and inflexible review procedures in China’s current national security review mechanism.Third,providing a reference for the improvement of China’s national security review by comparing with the difference of national security review in United States,Canada,Russia,South Korea and Australia in respects of the types of national security review,the main body of review,and the review procedures.Finally,combined with foreign legislation and practical experience,it is proposed that China should abolish the foreign capital mergers and acquisitions economic security applications in a timely manner,and at the same time strengthen the link between national security review and foreign investment access review and anti-monopoly review;the type of review recommends that greenfield investment be included in the national security review;It is proposed to set up a foreign investment committee chaired by the Minister of Commerce and set up a lead department according to individual cases to be responsible for specific investigations and post-examination supervision;the scope of preliminary consultations have to conclude substantive matters;In terms of review procedure,it is suggested that the compulsory review or scrutiny systems be carried out according to the degree of national security threat;the initiation of the review,puts forward areas that should be subject to compulsory review must perform its prior reporting procedures.The submission of applications for national security review in other areas is not mandatory,but higher-level organizations can unilaterally submit for review;In terms of mitigation agreement,the lead department is responsible for the conclusion and execution of the agreement.