Finance,technology transfer,and national security: A preliminary survey

Concern has been expressed within and outside the United States government about the implications for national security of foreign ownership of and control over aspects of the US defense industrial base and the transfer of militarily sensitive technology to other countries. The focus has rightly been placed on direct contact, through over or clandestine means, between US organizations that are engaged in the development or manufacture of such technology and foreign countries. Avenues of indirect contact and/or access have, however, received less attention. This survey is a review of the various elements of one such avenue-foreign control over or presence in the US financial community. Since finance is an essential element of economic activity and US policy strongly endorses the unfettered freedom of movement of all aspects of economic activity across national borders, a strong foreign presence in the American financial sector is expected and welcomed. Yet the obvious use of finance to control and channel production and distribution leads to consideration of the ways in which foreign interests in acquiring or affecting sensitive technologies can be advanced through financial means.