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Definition Of Exon-florio Provision:


Aprovisionthat allows the president of the United Statestosuspend or blocktheforeign acquisition of a U.
-based companyfor reasons of national security. The Exon-Florio provision only allows for the acquisition to be blocked if there is clear evidence that the foreign acquiring partycould threaten national security through its control of the acquired company and the provisions of law don't provide the adequate authority for the U. to protect national security.The Exon-Florio Provision was instituted by the Committee on Foreign Investment in the U. (CFIUS) and was implemented in 1988. Itis covered underSection 721 of the Defense Production Act of 1950. This provision canreduce thelevel of direct foreign investment as foreign companies may beprevented from carrying out acquisitions.

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