Preventing SBA Assistance from Going to China Act of 2023
Impact
If enacted, SB1372 would amend existing provisions of the Small Business Act to incorporate these prohibitions, potentially impacting a range of businesses that may have previously qualified for federal assistance. The bill aims to create a more secure economic environment by safeguarding public funds from being allocated to entities with significant connections to a country that has been viewed as a strategic competitor to the United States. This could lead to stricter scrutiny of business ownership structures and eligibility criteria for federal programs.
Summary
SB1372, titled the "Preventing SBA Assistance from Going to China Act of 2023", introduces regulations to prohibit certain businesses from receiving assistance from the Small Business Administration (SBA) if they have ties to the People's Republic of China. Specifically, the bill disallows any small business that is headquartered in China or has more than 25% of its voting stock owned by Chinese affiliates from qualifying for SBA support. This legislative measure reflects growing concerns about national security and the protection of American businesses from foreign influence.
Contention
Discussions around SB1372 are expected to be contentious, particularly regarding the implications it may have for businesses with international ties. Proponents argue that the measure is essential to protect U.S. interests and prevent foreign exploitation of American resources, while critics may express concerns over the broad strokes of the definitions and the potential for unintended consequences affecting legitimate businesses with non-Chinese partnerships. Furthermore, there may be debates regarding the effectiveness of such prohibitions in genuinely addressing national security concerns without stifling business innovation and growth.