CFIUS

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Publication November 12, 2015

CFIUS agreed to let Ralls Corporation sell the development rights to four wind farms in Oregon to investor Dr. Xieuxin Tang, the company said in a statement in early November.

Ralls has been engaged in a three-year battle with the US government over the projects. The company bought them from Greek company Terna Energy in March 2012. The US Navy expressed concerns soon after Ralls closed on the purchase about the location of the one of the projects that is near a US Navy base that trains pilots of drone aircraft. Ralls agreed to move it to a different site.

Ralls failed to notify CFIUS — short for the Committee on Foreign Investment in the United States — when it made the purchase. CFIUS is an interagency committee of 16 federal agencies that reviews foreign investments in US businesses for national security concerns. Ralls is Chinese backed. Submission of proposed deals is voluntary. However, the committee has authority to set aside transactions after the fact that were not submitted for review if the deals raise national security concerns.

After the Navy expressed concerns, CFIUS contacted Ralls and suggested it file a notice. It did so in June 2012. On September 28, 2012, President Obama issued an order requiring Ralls to remove everything from the sites within 14 days and divest the projects within 90 days. The order also blocked the future use of any turbines made by Sany — a Chinese manufacturer — to any third party for use at the project sites. The two individuals who own Ralls are also connected to Sany.

The order also blocked sale of the projects to any third party unless the buyer complies with the same conditions.  

Ralls sued in federal court to have the order set aside. It lost the first round, but a US appeals court said in July 2014 that the company should have been shown all unclassified information that led to the government order and given a chance to respond. The court called the refusal by the US government to share any information with Ralls a “clear constitutional violation” of the company’s right to due process.

The case has now been settled. Terms of the settlement have not been released, but Ralls said in a press release that it will be able to use Sany turbines in its other US projects. The company has projects in Colorado and Texas.


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