Citing national security concerns, President Biden issued an executive order (EO) on May 13, 2024, demanding a Chinese-affiliated company “sell or transfer” its ownership interests and any other rights in an approximately 12-acre lot that comes within one mile of Francis E. Warren Air Force Base (“Warren AFB”) in Cheyenne, Wyoming. The divestment order is particularly noteworthy because it is uncommon for the Committee on Foreign Investment in the United States (CFIUS), the interagency committee tasked with reviewing national security implications of certain foreign investments and real estate transactions in the United States, to refer matters to the President for final resolution. Nonetheless, CFIUS determined a negotiated mitigation agreement “would not be possible” with the Chinese-affiliated company, hence the need for conclusive presidential action.
According to the EO, the Chinese-affiliated company acquired the Wyoming land in June 2022, and subsequently made improvements to the real estate to support “specialized cryptocurrency mining operations.” However, the Chinese-affiliated company never reported the initial real estate acquisition with CFIUS, and only began cooperating after CFIUS initiated an investigation reportedly prompted by a public tip. The relatively new Foreign Investment Risk Review Modernization Act empowers CFIUS to review certain real estate transactions that are in close proximity to specific, sensitive U.S. facilities, such as Warren AFB, even when such acquisitions are not initially notified to CFIUS (see Update of January 22, 2020).
Ultimately, President Biden concluded that the national security risks posed by land owned by a Chinese-affiliated company that abuts Warren AFB, coupled with the related risk associated with the presence of specialized cryptocurrency mining equipment there—some of which is foreign-sourced and “potentially capable of surveillance and espionage activities”—were too problematic and necessitated divestment. Warren AFB is not only a “strategic missile base and key element of America’s nuclear triad,” but also home to Minuteman III intercontinental ballistic missiles.
The Chinese-affiliated company now has 120 days until September 10, 2024 to complete the divestment. However, “all items, structures, or other physical objects” that have been stockpiled, stored, deposited, or installed onto the land or connected to it must be removed within 90 days. Nothing can be sold or transferred without the knowledge and consent of CFIUS, though.
For more details on CFIUS’ functions, see Thompson Hine’s CFIUS/National Security Practice.