Rules Offered for Security Ban on Foreign Takeovers

Proposed rules that would allow President Bush to plead national security and block takeover of a U.S. firm by foreigners were published for public comment Friday by the Treasury Department.

Sen. James Exon (D-Neb.) and Rep. James J. Florio (D-N.J.), who were responsible for parts of the law, praised the proposed regulations published in the Federal Register. Comments may be submitted by Sept. 12, although the Treasury said later comments will be considered if possible.

The Trade Act, signed by former President Ronald Reagan last August, provides authority for the rules that would allow the President to block a merger if he has credible evidence that the foreign interest taking control might act to hurt U.S. security.

If he decides on an investigation, he gets 30 days to begin it, 45 days to complete it and another 15 days to announce it.

Florio said the Treasury has interpreted the law broadly to make sure that it covers different ways that a foreign firm could take over an American one.