More Scrutiny on Chinese Ag Project

OMAHA (DTN) -- North Dakota's senators on Thursday asked federal agencies for more scrutiny of a Chinese food manufacturer's purchase of 370 acres near Grand Forks, North Dakota, with the company's plans to build a corn mill.

Sens. John Hoeven, R-N.D., ranking member on the Senate Agriculture Appropriations Subcommittee, and Sen. Kevin Cramer, R-N.D., along with Sen. Marco Rubio, R-Fla., ranking member on the Senate Intelligence Committee, sent a letter to Defense Secretary Lloyd Austin and Treasury Secretary Janet Yellen, requesting that the Committee on Foreign Investment in the United States (CFIUS) conduct a review of the Chinese food manufacturer Fufeng Group's recent purchase of land near Grand Forks, North Dakota.

Fufeng Group is a publicly traded bio-fermentation manufacturer in China that makes more than 50 products. Fufeng states it exports to more than 90 countries.

$750 MILLION PROJECT

Fufeng announced last fall that the company would build a 25-million-bushel corn wet milling plant in Grand Forks that would employ about 220 people. The $700 million project is Fufeng's first foray into processing agricultural commodities in the U.S.

CFIUS is a federal committee made up of several agencies, headed by Treasury, that examines whether a foreign investment in the U.S. has national security implications. The committee's findings on individual transactions are largely kept private, and the committee seldom releases information to the public. The agriculture secretary is not a part of CFIUS, but the growing foreign investment in agriculture has repeatedly led to efforts to include USDA as a permanent member of the committee.

The senators said they believe that a full CFIUS review would clarify whether the purchase of this land by Fufeng Group carries national security implications. The senators noted the ground purchased by Fufeng is approximately 12 miles from the Grand Forks Air Force Base, "Which has led to concern that Fufeng operations could provide cover for PRC (People's Republic of China) surveillance or interference with the missions located at that installation, given Fufeng Group's reported ties to the Chinese Communist Party," the senators wrote.

QUESTIONING NATIONAL SECURITY IMPLICATIONS

They added, "We note that local officials are seeking input from federal authorities about any national security implications of this project. Local officials have discussed the matter with the U.S. Air Force and the Federal Bureau of Investigation. According to published reports, they also have encouraged Fufeng to make a voluntary CFIUS filing," the senators wrote. "People's Republic of China investments in the United States demand scrutiny. We therefore urge you, through CFIUS, to determine whether this project has national security implications and inform us when such a review is completed."

FILING DECLARATION TO RESOLVE ISSUES

Eric Chutorash, chief operating officer for Fufeng in the U.S., said in a statement to the Grand Forks Herald that Fufeng has decided to file a voluntary declaration with CFIUS to resolve these issues.

"Fufeng maintains and agrees with the city's CFIUS counsel that our transaction in Grand Forks does not require a CFIUS filing due to lack of jurisdiction," Chutorash said to the Herald. "However, given some of the questions raised and blatant incorrect statements regarding national security being made about our project, Fufeng has decided to go forward with a voluntary declaration CFIUS filing to get final resolution on this issue."

Fufeng's land purchase and the proximity to the Air Force base has drawn more scrutiny since a recent government report about China's investments and interests in U.S. agriculture. At least a few lawmakers have introduced legislation to ban China, Russia, Iran and North Korea from buying U.S. agricultural companies.

See "Ag Risks Over China's US Projects" here: https://www.dtnpf.com/….

Chris Clayton can be reached at Chris.Clayton@dtn.com

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