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Michael S. Considine, Undersecretary of Foreign Investments, National Security and Technological Collaboration of the United States, visits Spain in the midst of the energy crisis.

Considine is the representative of the Department of Energy in the powerful CFIUS (Committee for the control of foreign investment in the United States) and supervises the Office of International Scientific and Technological Collaboration, which brings together 17 laboratories in charge of studying almost any area. Both offices are vital within the Department of Energy to ensure an open investment climate, fostering scientific and technological collaboration.

Considine explains that he dedicates most of his time to foreign investment and adds that the reason for his visit to Spain and Portugal is “to talk to governments about the way in which they are analyzing the arrival of foreign investment. We have a lot to do. share. Starting by developing similar systems. Our program has more than 40 years of experience developing a mechanism for the analysis of foreign investment with which to look further at the impact on national security that some investments may have. “

“I have been doing this in the federal government for 12 years. What we intend to do by coming to Spain and other European countries is to share some of our best practices. We have made mistakes and encountered bumps along the way, but there is a lot we can do. share with countries like Spain that it is starting now with a relatively young system to develop a way of supervising foreign investment “, explains Considine at the US Embassy in Madrid.

“The supervision of foreign investment is very important for all economies. We know that it is important for Spain and it is important for the United States. Everyone wants to have an open environment that is attractive for as much investment as possible and that is good for him. economic development.

The sense of having a foreign investment supervision system is to achieve a balance between the attraction of that investment – because sometimes it is not good – and what is vital to protect a country and its national security interests or of scientific advances “adds the high American official. “We are looking to create that balance between what is attractive about foreign investment, but being sure that you are protecting national security,” says Considine.

Have you seen any problem in foreign investment in our country? The presence of Chinese companies in the energy sector is growing.

Yes, it is something that is happening throughout Europe and also in Spain and Portugal where there are numerous investments in the energy sector, mainly in renewables.

And in the nuclear one?

In general we are seeing Chinese investments in numerous industrial sectors. From the Department of Energy we obviously have to see what happens in the energy sector and from the Committee for Foreign Investments (CFIUS) we have to analyze what happens regardless of the sector.

China has an enormous amount of wealth to export and it is logical that it is looking for different opportunities around the world, in Spain, in Portugal, in Germany or in the United States.

We see a large amount of foreign investment arriving and through our procedures we know that the origin of such investment is China in a wide number of sectors. We want to remain open to Chinese investment in the US and we believe that Spain also wants to be open to most investment sources but having a control mechanism in which the Government can have complete knowledge so that in each of these individual operations Make sure that this foreign investment comes from China or from anywhere else, it can be consistent with the national security policy, which can simply be to protect the main industries or the main technologies that you want to maintain.

Have you identified a problem with those investments?

The monitoring system is not just based on a yes or no equation. It is not about looking at a trade and saying China can invest here, yes or no. It must be done with intense work of analysis and individually to see if each of these investments can generate any risk. The general idea is to say no at first, but to decide whether or not to impose conditions on an operation, you have to know how to say yes with conditions and achieve a win-win solution.

Should we seek reciprocity?

I don’t think it’s necessarily connected. We do not approach processes from that point of view. There is no reciprocity test. It’s independent. We look at the operation before us to decide whether that investment can receive the go-ahead from a national security point of view. In the United States, we do not analyze the impact on the economy or the labor market or the environment, these are issues that other regulatory authorities have to resolve, we only see it from the point of view of national security. We do not study the public interest as other governments do for the general interest of investment but we strictly look at security issues.

Is cybersecurity one of the key aspects?

Cybersecurity is very important for the energy sector and is one of the main points that is supervised when we are analyzing operations on foreign investments, mainly, in the sectors of generation and distribution in electricity, oil, etc. It is something that we see as a key element and that must be evaluated. Networks are one of the most important things. This is one of the messages that I want to convey to anyone who wants to listen to me when analyzing foreign investments.

Is our level correct or should we improve?

Cybersecurity is not static. We are learning at all times. It’s one of the most dynamic and fluid things to learn from on the fly and from past mistakes. This is one of the most beneficial issues when countries collaborate with their best practices. It is one of those areas where everyone wins when well-intentioned countries collaborate, share visions and experiences.

What other points can be key for the evaluation?

One of the things that we spend a lot of time on globally and should be important in Europe is technology transfer. We spend a lot of time evaluating the level of technical sophistication in companies and the applications they have. There are more and more technologies that seem commercial but have military uses and it is something to look at. China and Russia want to be dominant in this area, so you have to analyze it well.

Have you had meetings with the Government or with Spanish companies during your visit?

I have been to Madrid on several occasions to discuss foreign investment with the Spanish authorities. This is a new system, but I see a lot of progress. The first time he came was in 2018 to start working. There is significant progress and changes in sophistication and professionalization in the process of those in charge of analyzing investments in the ministry. We see progress in the system, although it is early, but it is maturing.

Has European regulation made decisions to monitor Chinese investment? It’s enough? Are more efforts needed?

It is an evolution and it is a complicated area that needs experience. The system has evolved a lot in how we mechanically approached reviewing investments ten years ago and how we do it now. Every year more people get more experience doing these analyzes, so there are many lessons learned. It is right there where Spain is right now gaining knowledge and becoming more sophisticated and secure by doing this type of analysis.

From his position at CFIUS he has analyzed the operations of Spanish companies in his country. In recent months with Iberdrola, Repsol or Naturgy.

It is a huge area. We have seen many very important Spanish companies for their investments in the United States and, particularly in energy, we see how they grow.

Do you expect more operations?

It is an area where you have to look to the future. Think that energy is a general issue where the US, Europe and other major world economies are looking to tackle the fight against climate change and achieve the objectives of carbon neutrality. There will be a lot of investment that will flow into renewables (solar, wind, offshore wind) or some emerging technologies, where we will see more investments like hydrogen. And other technological areas that will be important such as storage, the use of lithium. All these areas represent growth opportunities for Spanish companies. It is a trend that we hope will continue with more Spanish investments.

We are seeing how companies like Iberdrola are facing problems in the US in recent weeks in projects such as the interconnection with Canada, the purchase of PNM or offshore wind. Do you think there are legal security problems?

I do not think there is a problem of legal certainty. It is not a matter for the CFIUS. To be honest, I don’t think there is any problem with Spanish investment that is important and successful. Iberdrola is an example. Offshore wind is a new sector and I think it is an issue that is being managed because it is new. Any energy development in the US has to be adapted to federal and state regulation and I understand that this is the area where there are surely many pending conversations.

How do you think we are dealing with the energy crisis?

There is a very serious energy crisis that we are going through in the world. We are seeing high gas prices in Europe, in the US, in Asia, which is putting a lot of pressure and constricting the market. Obviously we will see how the products will follow the money. It is a problem that each country has to face and each one has different challenges in its impacts.

How do you see the role of Russia?

Russia has always been one of the largest gas suppliers, but this is not new. It is something that Europe has to face and fix to see how it impacts each of the economies.

Has Spain seen a reduction in the arrival of gas from the US?

Think about what happened to natural gas. The contracts signed around the world are mostly long-term, so most of the gas that moves around the world is marked by these contracts. Then there is the spot market which is obviously more reactionary and reflects higher rises because it is going to chase the money. If there is high demand in Asia and gas is only available in the spot market, it will go to the one that pays the most for this gas, but this only creates problems in terms of availability.

What do you expect from COP26?

Everybody is ready. The United States is back and wants to be an important part of the achievements at this COP. It is a priority for the Biden administration.

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