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Path opens for Fufeng project after federal agencies determine land deal was 'not covered' by CFIUS

The statement said the review took three months

092122 Fufeng.jpg
A Fufeng USA sign is draped across the front end of a bulldozer at the proposed site of the corn wet milling and bio-fermentation products manufacturer on the north end of Grand Forks, Tuesday, Sept. 20, 2022.
Eric Hylden / Grand Forks Herald
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GRAND FORKS — A federal panel tasked with reviewing a proposed wet corn milling plant at the heart of controversy in Grand Forks has determined the project's land deal does not fall under its jurisdiction, presumably clearing a path for the plant to move forward.

In a statement, Fufeng USA announced that after an “extensive two-phase review” the Committee on Foreign Investment in the United States determined the land acquisition was “not a ‘covered transaction’” under the committee’s jurisdiction and CFIUS will not be taking any further action on the deal. The statement said the review took three months.

“Fufeng USA is pleased with the outcome of the CFIUS review and is looking forward to building its wet corn milling and biofermentation plant in Grand Forks, North Dakota,” the statement said.

The review was completed by CFIUS on Dec. 12. City Administrator Todd Feland said the lead federal agencies as part of the review were the departments of treasury, defense and agriculture.

“Essentially the outcome is CFIUS is not taking action to suspend, lock or prohibit the transaction, and the CFIUS process has completed,” Feland said.

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Grand Forks Mayor Brandon Bochenski said the CFIUS process was one hurdle for the project to clear, but more work is likely to be done on the project before anything becomes official.

“At least we know CFIUS isn’t going to stop it,” Bochenski told the Herald.

Holds on Fufeng-related infrastructure projects, which were put in place in September as CFIUS requested more information, are now lifted according to Feland.

“I think we’re back to what we’ve been working on along all the environmental, engineering, those perspectives that we continue to work on,” he said. “Certainly we’ve been more in the planning and design phase so those will move forward … this year and likely through the next few months into next year as we move on.”

Work also will continue for the area around the plant, which was annexed into the city over the summer.

Ben Grzadzielewski, a Grand Forks resident who has been against the project, said the Tuesday announcement is disappointing for opponents.

"We were hoping they would address these concerns, but it’s not necessarily over," he said. "I don’t know the inner workings of government, but I have my doubts that the government is just going to overlook these security concerns based on one agency. Certainly, CFIUS is not the only agency that addresses security concerns in this country."

He points out, however, that "they’re not exactly saying they’re giving it the go-ahead. They’re just saying they don’t have jurisdiction" on the project.

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North Dakota's senators are troubled by the project and possible security risks, he noted.

"Even though CFIUS doesn’t have jurisdiction over that possible risk, I’m sure there is some other agency that does and I hope they’re looking into it," Grzadzielewski said.

The months-long debate about the proposed corn milling plant from Fufeng Group, an agribusiness with ties to China, created much discussion in and around Grand Forks since the plant was first announced in November 2021. The controversy has gained national attention.

Opponents of the project listed the environment and national security, especially its proximity to Grand Forks Air Force Base, as top concerns. Security has been a chief concern for many opponents, including U.S. Sen. Kevin Cramer, R-N.D., who spoke about national security implications in a broadcast interview in October. He and Sen. John Hoeven advised the city against moving forward with the project in August, also citing security concerns.

In a statement released to the Herald Tuesday evening, Cramer said in light of the decision, he would be seeking intel "directly from relevant agencies," though those agencies were not named.

"My concerns remain the same with the Chinese Communist Party investing in agriculture in North Dakota. I look forward to the classified briefing scheduled for next week to learn more," he said.

Gov. Doug Burgum said in a statement that the project has always been "locally driven." He said Tuesday's report is "the result of local officials doing their due diligence with the national security review process available to them."

"We trust the city will continue to do its due diligence if the project proceeds," Burgum said.

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Bochenski said the next steps still need to be decided. He said it doesn't necessarily mean "full-steam ahead."

“... We’ll see what the council decides to do going forward,” he said. “It’ll be a matter of seeing how we want to progress.”

This is a developing story, check back later for new updates.

READ MORE FUFENG CONTENT
More than a year after it was first announced, the council on Monday voted 5-0 to move away from the Fufeng project. Council members Kyle Kvamme and Tricia Lunski did not attend the meeting.

Related Topics: FUFENGBUSINESS
Meghan Arbegast grew up in Security-Widefield, Colorado. She earned a Bachelor of Science in Journalism from North Dakota State University in Fargo, in 2021.

Arbegast wrote for The Spectrum, NDSU's student newspaper, for three years and was Head News Editor for two years. She was an intern with University Relations her last two semesters of college.

Arbegast covers news pertaining to the city of Grand Forks/East Grand Forks including city hall coverage.

Readers can reach Arbegast at 701-780-1267 or MArbegast@gfherald.com.

Pronouns: She/Her
Languages: English
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