Federal Loopholes Allow China To Buy Land Near Sensitive Ports, Labs, and Coast Guard Facilities, Prompting Congressional Concern

‘There still remains significant gaps in our national security screening regime for land purchases,’ lawmakers say

China and other foreign adversaries are still permitted to purchase U.S. land near sensitive Coast Guard facilities, ports, and Energy Department labs, exposing national security gaps that lawmakers say enable hostile regimes to conduct espionage operations on American soil.

The Treasury Department’s Committee of Foreign Investment in the United States (CFIUS), the central body responsible for approving land sales to foreign entities, moved to “significantly expand” its jurisdiction in July, allowing it to review real estate transactions near 50 military and other sensitive sites. That expanded list, however, does not include locations such as “national laboratories, maritime ports, and critical telecommunications and energy infrastructure,” all of which remain vulnerable to foreign spy operations, according to Reps. Greg Murphy (R., N.C.) and John Moolenaar (R., Mich.).

The oversight, the lawmakers say, reflects “significant gaps in our national security screening regime for land purchases near national security sites.” Their concern comes as China works to ramp up its influence operations and “wreak havoc” on American infrastructure, efforts that have made combating Chinese land purchases a major political issue in states across the country.

“Coast Guard facilities, Department of Energy National Labs, among other locations, remain off CFIUS’s list of sensitive sites and are thereby vulnerable to foreign adversary exploitation,” Murphy and Moolenaar, who chairs the House Select Committee on China, wrote in a Monday letter to the Treasury Department.

“These loopholes must be closed, and closed quickly. Allowing our adversaries to have potential access to these sites poses risks to both our economic and national security, especially as we see companies with ties to hostile nations continue to increase their investments in the U.S.”

Chinese Communist Party-tied companies own at least 384,000 acres of American agricultural land, a 30 percent increase since 2019, though poor federal oversight means the number could be higher. This accounts for nearly $2 billion in holdings, planting Beijing and its interests across the American heartland.

Lawmakers from both parties have been sounding the alarm about CCP land purchases for some time, leading CFIUS and other federal agencies to more stringently police Beijing’s land acquisition near some military sites. But as the Treasury Department finalizes its new rule to extend CFIUS’s blacklist to include 50 military installations across 30 states, Murphy and Moolenaar say more must be done to address several critical loopholes.

“Because CFIUS land purchase regulations are not retroactive, land purchases made prior to a site being listed are exempt from CFIUS review,” the lawmakers noted in their letter. Even if federal authorities move forward with expanded restrictions, China’s past land purchases would be immune from scrutiny.

“Xi Jinping would never allow Americans to buy land next to sensitive Chinese bases,” Moolenaar told the Washington Free Beacon. “Unfortunately, current U.S. policy all too often rolls out the red carpet for CCP land purchases.”

CFIUS is not currently examining any restrictions on China’s land purchases near Coast Guard hubs and Energy Department labs, giving the CCP room to pivot to these sites as the American government focuses on restricting land buys near military installations.

Murphy and Moolenaar say there is a solid “national security case for including Coast Guard and other facilities” in CFIUS’s blacklist, given the Coast Guard’s chief role in policing America’s maritime boundaries.

In June, for instance, several Russian ships sailed within 30 miles of the coast of Florida, prompting the Coast Guard to monitor these activities. A month later, Chinese military ships entered the U.S. Exclusive Economic Zone off the coast of Alaska, again drawing a response from the Coast Guard.

If Chinese entities owned land near Coast Guard facilities, they could potentially surveil the Coast Guard’s response to national security situations and gain valuable information about how the United States monitors its borders.

“While CFIUS coverage includes many military bases and other sensitive areas, U.S. Coast Guard facilities, National Laboratories, some maritime ports, and critical telecommunications and energy infrastructure are not included,” Murphy told the Free Beacon. “This leaves the United States vulnerable to hostile nations and malicious actors. We cannot allow bad actors to purchase land in America to harm us.”