Dubai Firm Formally Submits to U.S. Security Review

Published March 03, 2006

| Associated Press

A United Arab Emirates company formally submitted Friday to a highly unusual, broader examination by the Bush administration of potential security risks over its plans to take over significant operations at major U.S. ports.

The new, 45-day investigation was aimed at quieting the furor in Washington over the administration's earlier approval of Dubai-owned DP World's $6.8 billion purchase of London-based Peninsular & Oriental Steam Navigation Co.

The British company runs major port operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

The Treasury Department, which governs the review panel, is expected to conduct another preliminary scrutiny that could take up to 30 days and then open its full, 45-day investigation.

The timelines are governed by U.S. law, and lawyers for the company and administration were wrestling with an unprecedented request for such a security review.

DP World offered this week to submit to the broader investigation by the U.S. government panel that considers security risks of foreign companies buying or investing in American industry.

The Treasury Department has already said it welcomed DP World's extraordinary offer. It said the same panel will reconsider the deal that it earlier agreed unanimously posed no national security concerns.

Meanwhile, in London, a Miami-based business partner of Peninsular & Oriental asked Britain's Court of Appeal on Friday to consider blocking DP World's purchase of its rival. Eller & Company Inc. complained in court papers it will become an "involuntary partner" under the sale with Dubai's government.

A British judge approved the sale this week but agreed to stay his ruling until the appeals court decides Monday whether to hear Eller's case.

DP World's offer for an extended examination was highly unusual. The U.S. review panel has conducted such full-blown investigations only 25 times among the 1,600 international deals it has reviewed.

DP World previously said during the renewed scrutiny, or until May 1, Dubai executives would not control or influence company's business in the United States, but said it was entitled to all profits during the period.

President Bush has defended his administration's earlier approval of the deal after a routine, 30-day review.

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http://www.foxnews.com/story/2006/03/03/dubai-firm-formally-submits-to-us-security-review