Although the Commerce Department reports that foreign direct investment in America exceeded $160 billion in 2006, a little-noticed bill about to be signed into law, the Foreign Investment and National Security Act of 2007, may make future foreign investments much more costly, and thereby less attractive.

The new law codifies much of existing practice by the Committee on Foreign Investment in America. Cfius is an interagency working group currently headed by the Treasury Department that since the 1970s has reviewed foreign acquisitions under an executive order. Cfius quietly reviewed more than 100 acquisitions in 2006 and blocked none.

In an open global economy, American investors each day acquire foreign assets, including corporations. Thesameholdstrue in reverse. Every year, hundreds of corporations are purchased by foreign investors; new businesses are sponsored by foreign corporations, and countless assets and securities are purchased by foreign entities. The vast majority of transactions raise no national security concerns.

A handful of attempted foreign investments in recent years have struck lawmakers as potentially threatening to our national security. Some attempted, but failed, acquisitions include the Chinese government acquiring Global Crossing in 2002 and Unocal in 2005, and Dubai Ports World attempting to acquire P&O’s American port operations in 2005. These deals failed not because Cfius formally blocked them, but for other reasons — primarily higher competing bids for an asset or public controversy discouraging potential investors. Indeed, the Dubai Ports World deal passed Cfius review.

It is possible to look at Cfius and see either a system that has muddled to good results or a system that merely suffers from neglect. On the one hand, there is little evidence that foreign acquisitions that have been reviewed by Cfius have been the source of terrorist or criminal activity. On the other, there is a gnawing concern that foreign investors in some critical infrastructure facilities might be less than fully cooperative with our government on national security matters.

Of course, Al Qaeda and other terrorist and criminal organizations will not necessarily bother with the niceties of purchasing corporate assets. These criminal organizations rarely want to engage in visible transactions. Moreover, those individuals intent on destroying an asset rarely seek to purchase it beforehand. The vast majority of entities that pass before the Cfius process are law-abiding good citizens.

The national security challenges we face on foreign transactions are subtle. First, we want to block entities directly or indirectly aiding terrorist and criminal organizations. Second, we want to ensure that certain sensitive facilities remain accessible to our government as necessary. Third, we do not want unnecessarily to discourage foreign investment. Unfortunately, Cfius has not been effective in any of these areas, and codifying Cfius under the new law will do little to help.

Indeed, the new law will likely expand the coverage of Cfius to more transactions that will be subject to governmental review. Worse, the process could become more bureaucratic, with written rules and unending appeals processes. Transactions that already wait months for antitrust and regulatory review may now be subject to additional months of Cfius review. For the overwhelming majority of foreign investments that we should be encouraging, the new law will do the opposite.

Part of the problem is the codification of Cfius itself. Detailed laws and rules can lead to transparent administrative processes and predictable legal appeals for entities that have equal standing before the law. For most governmental activities, transparency is helpful. But national security concerns inherently involve unequal opportunities among unequal parties. If our government wants to allow P&O but not Dubai Ports World to operate American ports, the less of a paper trail the better. The details of our national security review process are perhaps better left unspoken, certainly not written, and certainly not, as the new law would require, subject to frequent congressional oversight.

Under the bill, federal agencies would be required to reallocate more personnel and resources toward the new Cfius process and away from their current activities. Foreign investors would spend more money and time navigating the Cfius process for a wider range of acquisitions. A few investors may rationally decide that it is better to invest at lower cost outside America. Regrettably, the law titled the Foreign Investment and National Security Act of 2007 may do little to improve either.

A former FCC commissioner, Mr. Furchtgott-Roth is president of Furchtgott-Roth Economic Enterprises. He can be reached at hfr@furchtgott-roth.com.