The regulatory regime that governs the national security review of foreign acquisitions of U.S. companies has drawn significant attention recently as a result of several high-profile transactions. In 2005, the proposed acquisition of U.S. energy giant Unocal by a subsidiary of the government-controlled China National Offshore Oil Corporation was derailed by intense political pressure and national security allegations that were never proven. In 2006, a similar outcry forced Dubai Ports World (DP World), a United Arab Emirates state controlled entity, to relinquish control over the U.S. operations of the British port management company it had acquired. Public criticism accompanied even transactions that were successful, such as the $1.75 billion sale of IBM's personal computer business to Chinese computer giant Lenovo in 2004. 3Similar episodes of scrutiny mixed with criticism are now being played out almost weekly due to the intensified activities of sovereign wealth funds-- investment funds that are closely linked with states.

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