Us Congress 2023-2024 Regular Session

Us Congress Senate Bill SB5016 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	II
2	2	118THCONGRESS
3	3	2
4	4	DSESSION S. 5016
5	5	To combat the economic aggression of the People’s Republic of China, and
6	6	for other purposes.
7	7	IN THE SENATE OF THE UNITED STATES
8	8	SEPTEMBER10, 2024
9	9	Mr. C
10	10	ASEYintroduced the following bill; which was read twice and referred
11	11	to the Committee on Banking, Housing, and Urban Affairs
12	12	A BILL
13	13	To combat the economic aggression of the People’s Republic
14	14	of China, and for other purposes.
15	15	Be it enacted by the Senate and House of Representa-1
16	16	tives of the United States of America in Congress assembled, 2
17	17	SECTION 1. SHORT TITLE. 3
18	18	This Act may be cited as the ‘‘Combat Chinese Eco-4
19	19	nomic Aggression Act of 2024’’. 5
20	20	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
21	21	ssavage on LAPJG3WLY3PROD with BILLS 2
22	22	•S 5016 IS
23	23	SEC. 2. REVIEW BY COMMITTEE ON FOREIGN INVESTMENT 1
24	24	IN THE UNITED STATES OF INVESTMENTS IM-2
25	25	PACTING ECONOMIC OR TECHNOLOGICAL 3
26	26	COMPETITIVENESS. 4
27	27	(a) I
28	28	NGENERAL.—Subsection (a)(4) of section 721 5
29	29	of the Defense Production Act of 1950 (50 U.S.C. 4565) 6
30	30	is amended— 7
31	31	(1) in subparagraph (A)— 8
32	32	(A) in clause (i), by striking ‘‘; and’’ and 9
33	33	inserting a semicolon; 10
34	34	(B) in clause (ii)— 11
35	35	(i) by striking ‘‘clauses (ii) through 12
36	36	(v)’’ and inserting ‘‘any of clauses (ii) 13
37	37	through (iv) or clause (vii)’’; and 14
38	38	(ii) by striking the period at the end 15
39	39	and inserting ‘‘; and’’; 16
40	40	(C) by adding at the end the following: 17
41	41	‘‘(iii) any transaction described in 18
42	42	clause (v) or (vi) of subparagraph (B) pro-19
43	43	posed or pending after the date of the en-20
44	44	actment of this clause.’’; and 21
45	45	(2) in subparagraph (B)— 22
46	46	(A) by redesignating clause (v) as clause 23
47	47	(vii); and 24
48	48	(B) by inserting after clause (iv) the fol-25
49	49	lowing: 26
50	50	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
51	51	ssavage on LAPJG3WLY3PROD with BILLS 3
52	52	•S 5016 IS
53	53	‘‘(v) Any other investment, subject to 1
54	54	regulations prescribed under subparagraph 2
55	55	(D), by a foreign person in a United States 3
56	56	business that could support the acquisition 4
57	57	by a foreign country of capabilities to at-5
58	58	tain technological self-sufficiency or impair 6
59	59	the economic and technological competi-7
60	60	tiveness of the United States, including— 8
61	61	‘‘(I) an investment in a United 9
62	62	States business that has received di-10
63	63	rect funding from, or has been award-11
64	64	ed a contract by, the Department of 12
65	65	Defense, the Department of Com-13
66	66	merce, the Department of Energy, or 14
67	67	another Federal agency; or 15
68	68	‘‘(II) any other investment the 16
69	69	Committee determines, by regulation, 17
70	70	may provide to the foreign person ac-18
71	71	cess to expertise, business networks, 19
72	72	or production methods critical to 20
73	73	maintaining the economic and techno-21
74	74	logical competitiveness of the United 22
75	75	States. 23
76	76	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
77	77	ssavage on LAPJG3WLY3PROD with BILLS 4
78	78	•S 5016 IS
79	79	‘‘(vi) Any other investment, subject to 1
80	80	regulations prescribed under subparagraph 2
81	81	(D)— 3
82	82	‘‘(I) in a United States business 4
83	83	that produces, designs, tests, manu-5
84	84	factures, fabricates, or develops one or 6
85	85	more critical technologies; and 7
86	86	‘‘(II) by a foreign entity of con-8
87	87	cern (as defined in section 9901 of the 9
88	88	William M. (Mac) Thornberry Na-10
89	89	tional Defense Authorization Act for 11
90	90	Fiscal Year 2021 (15 U.S.C. 4651)) 12
91	91	that is organized under the laws of or 13
92	92	otherwise subject to the jurisdiction of 14
93	93	the People’s Republic of China.’’. 15
94	94	(b) M
95	95	ANDATORY DECLARATIONS.—Section 16
96	96	721(b)(1)(C)(v)(IV) of the Defense Production Act of 17
97	97	1950 (50 U.S.C. 4565(b)(1)(C)(v)(IV)) is amended by 18
98	98	adding at the end the following: 19
99	99	‘‘(hh) R
100	100	EQUIRED DECLARA -20
101	101	TIONS FOR CERTAIN TRANS -21
102	102	ACTIONS.—The parties to a cov-22
103	103	ered transaction shall submit a 23
104	104	declaration described in sub-24
105	105	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
106	106	ssavage on LAPJG3WLY3PROD with BILLS 5
107	107	•S 5016 IS
108	108	clause (I) with respect to the 1
109	109	transaction if— 2
110	110	‘‘(AA) a foreign person 3
111	111	that is a party to the trans-4
112	112	action is a national of the 5
113	113	People’s Republic of China 6
114	114	or an entity organized under 7
115	115	the laws of or otherwise sub-8
116	116	ject to the jurisdiction of the 9
117	117	People’s Republic of China; 10
118	118	or 11
119	119	‘‘(BB) the transaction 12
120	120	is in the metallurgy, tele-13
121	121	communications, energy, in-14
122	122	dustrial gas, chemicals, or 15
123	123	petrochemicals sector or any 16
124	124	other sector the Secretary 17
125	125	determines appropriate for 18
126	126	purposes of this item.’’. 19
127	127	(c) A
128	128	NALYSIS BYINTERNATIONAL TRADEADMINIS-20
129	129	TRATION.—Section 721(b)(1) of the Defense Production 21
130	130	Act of 1950 (50 U.S.C. 4565(b)(1)) is amended by adding 22
131	131	at the end the following: 23
132	132	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
133	133	ssavage on LAPJG3WLY3PROD with BILLS 6
134	134	•S 5016 IS
135	135	‘‘(I) ANALYSIS BY INTERNATIONAL TRADE 1
136	136	ADMINISTRATION WITH RESPECT TO CERTAIN 2
137	137	TRANSACTIONS.— 3
138	138	‘‘(i) I
139	139	N GENERAL.—In the case of a 4
140	140	review of a covered transaction described 5
141	141	in clause (ii), the Secretary of Commerce, 6
142	142	in consultation with other members of the 7
143	143	Committee as appropriate, shall conduct 8
144	144	an analysis of— 9
145	145	‘‘(I) the sector or industry in 10
146	146	which the United States business in-11
147	147	volved in the transaction operates; 12
148	148	‘‘(II) the cumulative control of, 13
149	149	or pattern of recent transactions by, 14
150	150	foreign persons, including, directly or 15
151	151	indirectly, foreign governments, in 16
152	152	that sector or industry; and 17
153	153	‘‘(III) the effect of foreign invest-18
154	154	ment in that sector or industry on the 19
155	155	national security of the United States. 20
156	156	‘‘(ii) T
157	157	RANSACTIONS DESCRIBED .—A 21
158	158	covered transaction described in this clause 22
159	159	is a covered transaction— 23
160	160	‘‘(I) described in clause (vi) or 24
161	161	(vii) of subsection (a)(4)(B); and 25
162	162	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
163	163	ssavage on LAPJG3WLY3PROD with BILLS 7
164	164	•S 5016 IS
165	165	‘‘(II) to which a foreign person 1
166	166	that is a national of the People’s Re-2
167	167	public of China or an entity organized 3
168	168	under the laws of or otherwise subject 4
169	169	to the jurisdiction of the People’s Re-5
170	170	public of China is a party.’’. 6
171	171	(d) A
172	172	UTHORIZATION OF APPROPRIATIONS.—There 7
173	173	are authorized to be appropriated for the Committee on 8
174	174	Foreign Investment in the United States such sums as 9
175	175	may be necessary to carry out the amendments made by 10
176	176	this section. 11
177	177	SEC. 3. ENHANCED SECURITIES DISCLOSURE REQUIRE-12
178	178	MENTS. 13
179	179	(a) D
180	180	EFINITIONS.—In this section: 14
181	181	(1) C
182	182	OMMISSION.—The term ‘‘Commission’’ 15
183	183	means the Securities and Exchange Commission. 16
184	184	(2) C
185	185	OUNTRY OF CONCERN .—The term ‘‘coun-17
186	186	try of concern’’— 18
187	187	(A) has the meaning given the term ‘‘cov-19
188	188	ered nation’’ in section 4872(d) of title 10, 20
189	189	United States Code; and 21
190	190	(B) includes a jurisdiction that the Com-22
191	191	mission, in consultation with the Secretary of 23
192	192	State and the Secretary of the Treasury, deter-24
193	193	mines to be subject to the political and legal 25
194	194	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
195	195	ssavage on LAPJG3WLY3PROD with BILLS 8
196	196	•S 5016 IS
197	197	control of a covered nation, as defined in sec-1
198	198	tion 4872(d) of title 10, United States Code. 2
199	199	(3) C
200	200	OVERED ENTITY.—The term ‘‘covered en-3
201	201	tity’’ means an entity or person that is required to 4
202	202	file Form PF. 5
203	203	(4) E
204	204	XEMPT REPORTING ADVISER .—The term 6
205	205	‘‘exempt reporting adviser’’ means an investment ad-7
206	206	viser described in section 275.204–4(a) of title 17, 8
207	207	Code of Federal Regulations, or any successor regu-9
208	208	lation. 10
209	209	(5) F
210	210	ORM ADV.—The term ‘‘Form ADV’’ 11
211	211	means the form described in section 279.1 of title 12
212	212	17, Code of Federal Regulations, or any successor 13
213	213	regulation. 14
214	214	(6) F
215	215	ORM PF.—The term ‘‘Form PF’’ means 15
216	216	the form described in section 279.9 of title 17, Code 16
217	217	of Federal Regulations, or any successor regulation. 17
218	218	(7) P
219	219	RIVATE FUND.—The term ‘‘private fund’’ 18
220	220	has the meaning given the term in section 202(a) of 19
221	221	the Investment Advisers Act of 1940 (15 U.S.C. 20
222	222	80b–2(a)). 21
223	223	(8) P
224	224	RIVATE FUND ASSETS.—The term ‘‘private 22
225	225	fund assets’’ has the meaning given the term in sec-23
226	226	tion 275.204(b)–1 of title 17, Code of Federal Regu-24
227	227	lations, or any successor regulation. 25
228	228	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
229	229	ssavage on LAPJG3WLY3PROD with BILLS 9
230	230	•S 5016 IS
231	231	(b) ENHANCEDDISCLOSUREREQUIREMENTS FOR 1
232	232	A
233	233	DVISERS OFPRIVATEFUNDS.— 2
234	234	(1) R
235	235	EQUIREMENTS.— 3
236	236	(A) I
237	237	N GENERAL.—Not later than 1 year 4
238	238	after the date of enactment of this Act, the 5
239	239	Commission shall amend Form PF and Form 6
240	240	ADV, and the rules of the Commission gov-7
241	241	erning the submission of Form PF and Form 8
242	242	ADV, to, subject to subparagraph (B), require 9
243	243	each covered entity and each exempt reporting 10
244	244	adviser to annually disclose when submitting 11
245	245	Form PF or Form ADV, respectively, the total 12
246	246	private fund assets in countries of concern at-13
247	247	tributable to the private funds advised by the 14
248	248	covered entity or exempt reporting adviser, as 15
249	249	applicable, which shall be broken down by the 16
250	250	percentage of those assets in each country of 17
251	251	concern. 18
252	252	(B) A
253	253	PPLICATION.—For the purposes of 19
254	254	subparagraph (A), the Commission shall deter-20
255	255	mine whether a private fund asset is in a coun-21
256	256	try of concern based on— 22
257	257	(i) the amount of capital that is in-23
258	258	vested in an entity (including a subsidiary 24
259	259	of an entity)— 25
260	260	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
261	261	ssavage on LAPJG3WLY3PROD with BILLS 10
262	262	•S 5016 IS
263	263	(I) that has a physical presence 1
264	264	or employees in that country of con-2
265	265	cern; or 3
266	266	(II) the plurality of the sales of 4
267	267	which are from that country of con-5
268	268	cern; and 6
269	269	(ii) the proportion of the total assets 7
270	270	and liabilities of an entity described in 8
271	271	clause (i) that are located in that country 9
272	272	of concern. 10
273	273	(2) R
274	274	EPORTING BY COMMISSION .— 11
275	275	(A) P
276	276	UBLICLY AVAILABLE REPORTS .— 12
277	277	(i) I
278	278	N GENERAL.—Not later than 1 13
279	279	year after the date on which the Commis-14
280	280	sion makes the amendments required 15
281	281	under paragraph (1), and not less fre-16
282	282	quently than annually thereafter, the Com-17
283	283	mission shall prepare and make publicly 18
284	284	available a report containing a list of cov-19
285	285	ered entities and exempt reporting advisers 20
286	286	that, for the period covered by the report, 21
287	287	have disclosed more than 0 private fund 22
288	288	assets under Form PF or Form ADV (as 23
289	289	amended pursuant to that subsection) in at 24
290	290	least 1 country of concern, which shall be 25
291	291	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
292	292	ssavage on LAPJG3WLY3PROD with BILLS 11
293	293	•S 5016 IS
294	294	aggregated by the covered entity or exempt 1
295	295	reporting adviser making that disclosure. 2
296	296	(ii) A
297	297	DDITIONAL REQUIREMENTS .— 3
298	298	Each report prepared and made available 4
299	299	by the Commission under clause (i) shall— 5
300	300	(I) be aggregated by covered en-6
301	301	tity or exempt reporting adviser; and 7
302	302	(II) include the percentage of pri-8
303	303	vate fund assets disclosed by a cov-9
304	304	ered entity or exempt reporting ad-10
305	305	viser, as applicable. 11
306	306	(B) R
307	307	ULE OF CONSTRUCTION .—Nothing in 12
308	308	this paragraph may be construed to permit the 13
309	309	Commission to make available any information 14
310	310	that appears on Form PF or Form ADV other 15
311	311	than the information that is included on Form 16
312	312	PF or Form ADV as a result of the require-17
313	313	ments under paragraph (1). 18
314	314	(c) E
315	315	XEMPTEDTRANSACTIONS.—The Securities Ex-19
316	316	change Act of 1934 (15 U.S.C. 78a et seq.) is amended 20
317	317	by inserting after section 13A (15 U.S.C. 78m–1) the fol-21
318	318	lowing: 22
319	319	‘‘SEC. 13B. DISCLOSURE REQUIREMENTS RELATING TO 23
320	320	CERTAIN EXEMPTED TRANSACTIONS. 24
321	321	‘‘(a) D
322	322	EFINITIONS.—In this section: 25
323	323	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
324	324	ssavage on LAPJG3WLY3PROD with BILLS 12
325	325	•S 5016 IS
326	326	‘‘(1) BENEFICIAL OWNER .—The term ‘bene-1
327	327	ficial owner’ means a person that is determined to 2
328	328	be a beneficial owner under section 240.13d–3 of 3
329	329	title 17, Code of Federal Regulations, or any suc-4
330	330	cessor regulation. 5
331	331	‘‘(2) C
332	332	OUNTRY OF CONCERN .—The term ‘coun-6
333	333	try of concern’— 7
334	334	‘‘(A) has the meaning given the term ‘cov-8
335	335	ered nation’ in section 4872(d) of title 10, 9
336	336	United States Code; and 10
337	337	‘‘(B) includes a jurisdiction that the Com-11
338	338	mission, in consultation with the Secretary of 12
339	339	State and the Secretary of the Treasury, deter-13
340	340	mines to be subject to the political and legal 14
341	341	control of a covered nation, as defined in sec-15
342	342	tion 4872(d) of title 10, United States Code. 16
343	343	‘‘(3) C
344	344	OVERED EXEMPTED TRANSACTION .—The 17
345	345	term ‘covered exempted transaction’ means an offer 18
346	346	or sale of a security that is— 19
347	347	‘‘(A) exempt from registration under sec-20
348	348	tion 5 of the Securities Act of 1933 (15 U.S.C. 21
349	349	77e); and 22
350	350	‘‘(B) structured or intended to comply 23
351	351	with— 24
352	352	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
353	353	ssavage on LAPJG3WLY3PROD with BILLS 13
354	354	•S 5016 IS
355	355	‘‘(i) section 230.506(b) of title 17, 1
356	356	Code of Federal regulations, or any suc-2
357	357	cessor regulation; 3
358	358	‘‘(ii) sections 230.901, 230.902, and 4
359	359	230.903 of title 17, Code of Federal Regu-5
360	360	lations, or any successor regulations; or 6
361	361	‘‘(iii) section 230.144A of title 17, 7
362	362	Code of Federal Regulations, or any suc-8
363	363	cessor regulation. 9
364	364	‘‘(b) R
365	365	EQUIREMENT.— 10
366	366	‘‘(1) I
367	367	N GENERAL.—Notwithstanding any other 11
368	368	provision of law, in the case of an issuer that con-12
369	369	ducts a covered exempted transaction described in 13
370	370	paragraph (2), that issuer shall provide to the Com-14
371	371	mission, at such time and in such manner as the 15
372	372	Commission may prescribe, the following informa-16
373	373	tion: 17
374	374	‘‘(A) The identity of the issuer. 18
375	375	‘‘(B) The place of incorporation of the 19
376	376	issuer. 20
377	377	‘‘(C) Whether the issuer is associated with 21
378	378	at least 1 consolidated entity, the plurality of 22
379	379	the assets of which are in a country of concern. 23
380	380	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
381	381	ssavage on LAPJG3WLY3PROD with BILLS 14
382	382	•S 5016 IS
383	383	‘‘(D) Whether the issuer is associated with 1
384	384	at least 1 consolidated entity that is incor-2
385	385	porated in a country of concern. 3
386	386	‘‘(E) The amount of securities sold pursu-4
387	387	ant to the covered exempted transaction and 5
388	388	the net proceeds to the issuer. 6
389	389	‘‘(F) The beneficial owners of the issuer. 7
390	390	‘‘(G) The intended use of the proceeds 8
391	391	from the covered exempted transaction, includ-9
392	392	ing each country in which the issuer intends to 10
393	393	invest those proceeds, which shall be broken 11
394	394	down by the percentage of net proceeds by in-12
395	395	dustry within each such country. 13
396	396	‘‘(H) The exemption the issuer relies on 14
397	397	with respect to the covered exempted trans-15
398	398	action. 16
399	399	‘‘(2) P
400	400	ARTICULAR COVERED EXEMPTED TRANS -17
401	401	ACTION DESCRIBED .—A covered exempted trans-18
402	402	action described in this paragraph is, with respect to 19
403	403	the issuer offering or selling the security that is the 20
404	404	subject of the covered exempted transaction, either 21
405	405	of the following instances: 22
406	406	‘‘(A) An offer or sale of securities in an 23
407	407	amount that is not less than $25,000,000. 24
408	408	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
409	409	ssavage on LAPJG3WLY3PROD with BILLS 15
410	410	•S 5016 IS
411	411	‘‘(B) An offer or sale of a security such 1
412	412	that the offer or sale, together with all covered 2
413	413	exempted transactions by that issuer during the 3
414	414	1-year period preceding the date on which the 4
415	415	issuer offers or sells the security, constitutes of-5
416	416	fers or sales in the aggregate of an amount that 6
417	417	is not less than $50,000,000. 7
418	418	‘‘(c) A
419	419	UTHORITYTOREVISE AND PROMULGATE 8
420	420	R
421	421	ULES, REGULATIONS, ANDFORMS.—The Commission 9
422	422	shall, for the protection of investors and fair and orderly 10
423	423	markets— 11
424	424	‘‘(1) revise and issue such rules, regulations, 12
425	425	and forms as may be necessary to carry out this sec-13
426	426	tion; and 14
427	427	‘‘(2) issue rules to set conditions that limit the 15
428	428	future use of covered exempted transactions for 16
429	429	issuers that do not comply with the disclosure re-17
430	430	quirements of this section. 18
431	431	‘‘(d) A
432	432	PPLICABILITY.—This section shall apply with 19
433	433	respect to any covered exempted transaction that occurs 20
434	434	on or after the date that is 1 year after the date of enact-21
435	435	ment of this section. 22
436	436	‘‘(e) R
437	437	EPORTS.—The Commission shall, on a quar-23
438	438	terly basis, prepare and make publicly available a report 24
439	439	that includes all information submitted by an issuer under 25
440	440	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
441	441	ssavage on LAPJG3WLY3PROD with BILLS 16
442	442	•S 5016 IS
443	443	this section during the quarter covered by the report, if 1
444	444	that issuer— 2
445	445	‘‘(1) is— 3
446	446	‘‘(A) incorporated in a country of concern; 4
447	447	or 5
448	448	‘‘(B) incorporated outside of a country of 6
449	449	concern and is associated with at least 1 con-7
450	450	solidated entity— 8
451	451	‘‘(i) the plurality of the assets of 9
452	452	which are in a country of concern; or 10
453	453	‘‘(ii) that is incorporated in a country 11
454	454	of concern; or 12
455	455	‘‘(2) discloses in a filing made pursuant to this 13
456	456	section that the issuer intends to invest the proceeds 14
457	457	from a covered exempted transaction in a country of 15
458	458	concern.’’. 16
459	459	SEC. 4. PROTECTION OF COVERED SECTORS. 17
460	460	The Defense Production Act of 1950 (50 U.S.C. 18
461	461	4501 et seq.) is amended by adding at the end the fol-19
462	462	lowing: 20
463	463	‘‘TITLE VIII—PROTECTION OF 21
464	464	COVERED SECTORS 22
465	465	‘‘SEC. 801. DEFINITIONS. 23
466	466	‘‘In this title: 24
467	467	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
468	468	ssavage on LAPJG3WLY3PROD with BILLS 17
469	469	•S 5016 IS
470	470	‘‘(1) APPROPRIATE CONGRESSIONAL COMMIT -1
471	471	TEES.—The term ‘appropriate congressional com-2
472	472	mittees’ means— 3
473	473	‘‘(A) the Committee on Foreign Affairs, 4
474	474	the Committee on Financial Services, the Com-5
475	475	mittee on Ways and Means, the Committee on 6
476	476	Appropriations, and the Permanent Select Com-7
477	477	mittee on Intelligence of the House of Rep-8
478	478	resentatives; and 9
479	479	‘‘(B) the Committee on Foreign Relations, 10
480	480	the Committee on Banking, Housing, and 11
481	481	Urban Affairs, the Committee on Finance, the 12
482	482	Committee on Appropriations, and the Select 13
483	483	Committee on Intelligence of the Senate. 14
484	484	‘‘(2) C
485	485	OUNTRY OF CONCERN .—The term ‘coun-15
486	486	try of concern’ includes— 16
487	487	‘‘(A) the Democratic People’s Republic of 17
488	488	North Korea; 18
489	489	‘‘(B) the People’s Republic of China, in-19
490	490	cluding the Hong Kong Special Administrative 20
491	491	Region and the Macau Special Administrative 21
492	492	Region; 22
493	493	‘‘(C) the Russian Federation; 23
494	494	‘‘(D) the Islamic Republic of Iran; and 24
495	495	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
496	496	ssavage on LAPJG3WLY3PROD with BILLS 18
497	497	•S 5016 IS
498	498	‘‘(E) any other country that the President 1
499	499	has identified as engaging in a comprehensive, 2
500	500	long-term strategy that directs, facilitates, or 3
501	501	otherwise supports advancements in sensitive 4
502	502	technologies and products that are critical to 5
503	503	the military, intelligence, surveillance, or cyber- 6
504	504	enabled capabilities of the country to counter 7
505	505	United States capabilities in a way that threat-8
506	506	ens the national security of the United States; 9
507	507	and 10
508	508	‘‘(F) any other country the President de-11
509	509	termines necessary to ensure a country de-12
510	510	scribed in any of subparagraphs (A) through 13
511	511	(E) is unable to circumvent the provisions of 14
512	512	this title and the regulations issued pursuant to 15
513	513	this title. 16
514	514	‘‘(3) C
515	515	OVERED ACTIVITY.— 17
516	516	‘‘(A) I
517	517	N GENERAL.—Subject to such regu-18
518	518	lations as may be prescribed in accordance with 19
519	519	section 807, and except as provided in subpara-20
520	520	graph (B), the term ‘covered activity’ means 21
521	521	any activity engaged in by a United States per-22
522	522	son that involves— 23
523	523	‘‘(i) an acquisition by such United 24
524	524	States person of an equity interest or con-25
525	525	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
526	526	ssavage on LAPJG3WLY3PROD with BILLS 19
527	527	•S 5016 IS
528	528	tingent equity interest, or monetary capital 1
529	529	contribution, in a covered foreign entity, 2
530	530	directly or indirectly, by contractual com-3
531	531	mitment or otherwise; 4
532	532	‘‘(ii) an arrangement for an interest 5
533	533	held by such United States person in the 6
534	534	short- or long-term debt obligations of a 7
535	535	covered foreign entity that includes govern-8
536	536	ance rights that are characteristic of an 9
537	537	equity investment, management, or other 10
538	538	important rights; 11
539	539	‘‘(iii) the establishment of a wholly 12
540	540	owned subsidiary in a country of concern, 13
541	541	such as a greenfield investment, for the 14
542	542	purpose of production, design, testing, 15
543	543	manufacturing, fabrication, or development 16
544	544	related to one or more covered sectors; 17
545	545	‘‘(iv) the establishment by such 18
546	546	United States person of a joint venture in 19
547	547	a country of concern or with a covered for-20
548	548	eign entity for the purpose of production, 21
549	549	design, testing, manufacturing, fabrication, 22
550	550	or research, or other contractual or other 23
551	551	commitments involving a covered foreign 24
552	552	entity to jointly research and develop new 25
553	553	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
554	554	ssavage on LAPJG3WLY3PROD with BILLS 20
555	555	•S 5016 IS
556	556	innovation, including through the transfer 1
557	557	of capital or intellectual property or other 2
558	558	business proprietary information; or 3
559	559	‘‘(v) the acquisition by a United 4
560	560	States person with a covered foreign entity 5
561	561	of— 6
562	562	‘‘(I) operational cooperation, such 7
563	563	as through supply or support arrange-8
564	564	ments; 9
565	565	‘‘(II) the right to board represen-10
566	566	tation (as an observer, even if limited, 11
567	567	or as a member) or an executive role 12
568	568	(as may be defined through regula-13
569	569	tion) in a covered foreign entity; 14
570	570	‘‘(III) the ability to direct or in-15
571	571	fluence such operational decisions as 16
572	572	may be defined through such regula-17
573	573	tions; 18
574	574	‘‘(IV) formal governance rep-19
575	575	resentation in any operating affiliate, 20
576	576	such as a portfolio company, of a cov-21
577	577	ered foreign entity; or 22
578	578	‘‘(V) a new relationship to share 23
579	579	or provide business services, such as 24
580	580	financial services, marketing services, 25
581	581	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
582	582	ssavage on LAPJG3WLY3PROD with BILLS 21
583	583	•S 5016 IS
584	584	maintenance, or assembly functions; 1
585	585	or 2
586	586	‘‘(vi) knowingly directing transactions 3
587	587	by foreign persons that would constitute 4
588	588	covered activity if engaged in by a United 5
589	589	States person. 6
590	590	‘‘(B) E
591	591	XCEPTIONS.—The term ‘covered ac-7
592	592	tivity’ does not include— 8
593	593	‘‘(i) any transaction the value of 9
594	594	which the President determines is de mini-10
595	595	mis, as defined in regulations prescribed in 11
596	596	accordance with section 807; 12
597	597	‘‘(ii) any category of transactions that 13
598	598	the President determines is in the national 14
599	599	interest of the United States, as may be 15
600	600	defined in regulations prescribed in accord-16
601	601	ance with section 807; 17
602	602	‘‘(iii) an investment in— 18
603	603	‘‘(I) a publicly traded security (as 19
604	604	such term is defined in section 20
605	605	3(a)(10) of the Securities Exchange 21
606	606	Act of 1934 (15 U.S.C. 78c(a)(10))); 22
607	607	‘‘(II) an index fund, mutual 23
608	608	fund, exchange-traded fund, or a simi-24
609	609	lar instrument (including associated 25
610	610	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
611	611	ssavage on LAPJG3WLY3PROD with BILLS 22
612	612	•S 5016 IS
613	613	derivatives) offered by an investment 1
614	614	company (as such term is defined in 2
615	615	section 3(a)(1) of the Investment 3
616	616	Company Act of 1940 (15 U.S.C. 4
617	617	80a–3(a)(1))), or by a private invest-5
618	618	ment fund; or 6
619	619	‘‘(III) a venture capital fund, pri-7
620	620	vate equity fund, fund of funds, or 8
621	621	other pooled investment funds, as the 9
622	622	limited partner, in each case in which 10
623	623	the limited partner’s contribution is 11
624	624	solely capital in a limited partnership 12
625	625	structure and— 13
626	626	‘‘(aa) the limited partner 14
627	627	cannot make managerial deci-15
628	628	sions, is not responsible for any 16
629	629	debts beyond its investment, and 17
630	630	does not have the ability (for-18
631	631	mally or informally) to influence 19
632	632	or participate in the fund’s or a 20
633	633	covered foreign entity’s decision 21
634	634	making or operations; or 22
635	635	‘‘(bb) the investment is 23
636	636	below a de minimis threshold to 24
637	637	be determined by the President; 25
638	638	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
639	639	ssavage on LAPJG3WLY3PROD with BILLS 23
640	640	•S 5016 IS
641	641	‘‘(iv) the acquisition of the equity or 1
642	642	other interest owned or held by a covered 2
643	643	foreign entity in an entity or assets located 3
644	644	outside of a country of concern in which 4
645	645	the United States person is acquiring all 5
646	646	interests in the entity or assets held by 6
647	647	covered foreign entity; 7
648	648	‘‘(v) an intracompany transfer of 8
649	649	funds from a United States parent com-9
650	650	pany to a subsidiary located in a country 10
651	651	of concern, as specified in regulations pre-11
652	652	scribed in accordance with section 807; 12
653	653	‘‘(vi) a transaction made pursuant to 13
654	654	a binding, uncalled capital commitment en-14
655	655	tered into before the date on which the 15
656	656	regulations prescribed in accordance with 16
657	657	section 807 take effect; or 17
658	658	‘‘(vii) any ordinary or administrative 18
659	659	business transaction as may be defined in 19
660	660	such regulations. 20
661	661	‘‘(4) C
662	662	OVERED FOREIGN ENTITY .—Subject to 21
663	663	regulations prescribed in accordance with section 22
664	664	807, the term ‘covered foreign entity’ means the fol-23
665	665	lowing: 24
666	666	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
667	667	ssavage on LAPJG3WLY3PROD with BILLS 24
668	668	•S 5016 IS
669	669	‘‘(A) Any entity that is incorporated in, 1
670	670	has a principal place of business in, or is orga-2
671	671	nized under the laws of a country of concern. 3
672	672	‘‘(B) Any entity the equity securities of 4
673	673	which are traded in the ordinary course of busi-5
674	674	ness on one or more exchanges in a country of 6
675	675	concern. 7
676	676	‘‘(C) Any agency or instrumentality of the 8
677	677	government of a country of concern. 9
678	678	‘‘(D) Any entity in which any entity de-10
679	679	scribed in subparagraph (A), (B), or (C) holds, 11
680	680	individually or in the aggregate, directly or indi-12
681	681	rectly, an ownership interest of greater than 50 13
682	682	percent. 14
683	683	‘‘(E) Any other entity that is not a United 15
684	684	States person and that meets such criteria as 16
685	685	may be specified by the President in such regu-17
686	686	lations prescribed in accordance with section 18
687	687	807. 19
688	688	‘‘(5) C
689	689	OVERED SECTORS .—Subject to regula-20
690	690	tions prescribed in accordance with section 807, the 21
691	691	term ‘covered sectors’ includes sectors within the fol-22
692	692	lowing areas: 23
693	693	‘‘(A) Semiconductors and microelectronics. 24
694	694	‘‘(B) Artificial intelligence. 25
695	695	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
696	696	ssavage on LAPJG3WLY3PROD with BILLS 25
697	697	•S 5016 IS
698	698	‘‘(C) Quantum information science and 1
699	699	technology. 2
700	700	‘‘(D) Hypersonics. 3
701	701	‘‘(E) Satellite-based communications. 4
702	702	‘‘(F) Networked laser scanning systems 5
703	703	with both military and civilian applications. 6
704	704	‘‘(6) L
705	705	EAD AGENCY.—The term ‘lead agency’ 7
706	706	means the Federal agency to which the President 8
707	707	delegates, pursuant to section 802, the authorities 9
708	708	provided under this title. 10
709	709	‘‘(7) P
710	710	ARTY.—The term ‘party’, with respect to 11
711	711	an activity, has the meaning given that term in reg-12
712	712	ulations prescribed in accordance with section 807. 13
713	713	‘‘(8) U
714	714	NITED STATES PERSON .—The term 14
715	715	‘United States person’ means— 15
716	716	‘‘(A) an individual who is a United States 16
717	717	citizen or an alien lawfully admitted for perma-17
718	718	nent residence to the United States; or 18
719	719	‘‘(B) an entity organized under the laws of 19
720	720	the United States or of any jurisdiction within 20
721	721	the United States, including any foreign branch 21
722	722	of such an entity. 22
723	723	‘‘SEC. 802. DELEGATION OF AUTHORITIES. 23
724	724	‘‘Except as provided by section 808, the President 24
725	725	may delegate the authorities provided under this title to 25
726	726	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
727	727	ssavage on LAPJG3WLY3PROD with BILLS 26
728	728	•S 5016 IS
729	729	the head of any Federal agency the President determines 1
730	730	appropriate in order to carry out the provisions of this 2
731	731	title. 3
732	732	‘‘SEC. 803. IDENTIFICATION OF CATEGORIES OF TECH-4
733	733	NOLOGIES AND PRODUCTS IN COVERED SEC-5
734	734	TORS THAT MAY POSE THREATS TO UNITED 6
735	735	STATES NATIONAL SECURITY. 7
736	736	‘‘(a) I
737	737	NGENERAL.—Not later than one year after the 8
738	738	date of the enactment of this title, the President shall— 9
739	739	‘‘(1) identify categories of technologies and 10
740	740	products in covered sectors that may pose an acute 11
741	741	threat to the national security of the United States 12
742	742	if developed or acquired by a country of concern; 13
743	743	and 14
744	744	‘‘(2) publish a list of the categories of tech-15
745	745	nologies and products identified under paragraph (1) 16
746	746	in the Federal Register. 17
747	747	‘‘(b) A
748	748	NNUALUPDATES.—Not later than one year 18
749	749	after the publication of the initial list required by sub-19
750	750	section (a)(2), the President shall— 20
751	751	‘‘(1) review the categories of technologies and 21
752	752	products on that list; and 22
753	753	‘‘(2) publish an updated list of the categories of 23
754	754	technologies and products in the Federal Register if 24
755	755	the list has changed. 25
756	756	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
757	757	ssavage on LAPJG3WLY3PROD with BILLS 27
758	758	•S 5016 IS
759	759	‘‘SEC. 804. PROHIBITION ON COVERED ACTIVITIES. 1
760	760	‘‘(a) I
761	761	NGENERAL.—The President may, on or after 2
762	762	the date on which the initial list of categories of tech-3
763	763	nologies and products is published in the Federal Register 4
764	764	under section 803(a), prescribe, subject to public notice 5
765	765	and comment, regulations to prohibit a United States per-6
766	766	son from engaging, directly or indirectly, in a covered ac-7
767	767	tivity involving a category of technologies and products on 8
768	768	the list. 9
769	769	‘‘(b) E
770	770	LEMENTS.—Regulations prescribed under sub-10
771	771	section (a) may— 11
772	772	‘‘(1) require that a United States person take 12
773	773	all reasonable steps to prohibit and prevent any 13
774	774	transaction by a foreign entity under the control of 14
775	775	the United States person that would be a prohibited 15
776	776	transaction if engaged in by a United States person; 16
777	777	and 17
778	778	‘‘(2) exclude any transaction consisting of the 18
779	779	acquisition of an equity or other interest in an entity 19
780	780	located outside a country of concern, if the President 20
781	781	has determined that the government of the country 21
782	782	in which that entity is established or has its prin-22
783	783	cipal place of business has in place a program for 23
784	784	the restriction of certain activities involving coun-24
785	785	tries of concern that is comparable to the provisions 25
786	786	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
787	787	ssavage on LAPJG3WLY3PROD with BILLS 28
788	788	•S 5016 IS
789	789	provided for in this title, after consideration of other 1
790	790	relevant factors. 2
791	791	‘‘SEC. 805. MANDATORY NOTIFICATION OF COVERED AC-3
792	792	TIVITIES. 4
793	793	‘‘(a) M
794	794	ANDATORYNOTIFICATION.— 5
795	795	‘‘(1) I
796	796	N GENERAL.—Beginning on the date that 6
797	797	is 90 days after the date on which the initial list of 7
798	798	categories of technologies and products is published 8
799	799	in the Federal Register under section 803(a), a 9
800	800	United States person engaging in a covered activity 10
801	801	described in paragraph (2), or that controls a for-11
802	802	eign entity engaging in an activity that would be a 12
803	803	covered activity described in paragraph (2) if en-13
804	804	gaged in by a United States person, shall submit to 14
805	805	the President a complete written notification of the 15
806	806	activity not later than 14 days after the completion 16
807	807	date of the activity. 17
808	808	‘‘(2) C
809	809	OVERED ACTIVITIES DESCRIBED .—A cov-18
810	810	ered activity described in this paragraph is a covered 19
811	811	activity— 20
812	812	‘‘(A) involving a category of technologies 21
813	813	and products on the list published under section 22
814	814	803; and 23
815	815	‘‘(B) that is not prohibited pursuant to 24
816	816	section 804. 25
817	817	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
818	818	ssavage on LAPJG3WLY3PROD with BILLS 29
819	819	•S 5016 IS
820	820	‘‘(3) CIRCULATION OF NOTIFICATION .— 1
821	821	‘‘(A) I
822	822	N GENERAL.—The President shall, 2
823	823	upon receipt of a notification under paragraph 3
824	824	(1), promptly inspect the notification for com-4
825	825	pleteness. 5
826	826	‘‘(B) I
827	827	NCOMPLETE NOTIFICATION .—If a 6
828	828	notification submitted under paragraph (1) is 7
829	829	incomplete, the President shall promptly inform 8
830	830	the United States person that submits the noti-9
831	831	fication that the notification is not complete 10
832	832	and provide an explanation for relevant mate-11
833	833	rial with respect to which the notification is not 12
834	834	complete. 13
835	835	‘‘(4) I
836	836	DENTIFICATION OF NON -NOTIFIED ACTIV-14
837	837	ITY.—The President shall establish a process to 15
838	838	identify a covered activity described in paragraph (2) 16
839	839	for which— 17
840	840	‘‘(A) a notification is not submitted to the 18
841	841	President under paragraph (1); and 19
842	842	‘‘(B) information is reasonably available. 20
843	843	‘‘(b) C
844	844	ONFIDENTIALITY OFINFORMATION.— 21
845	845	‘‘(1) I
846	846	N GENERAL.—Except as provided in para-22
847	847	graph (2), any information or documentary material 23
848	848	filed with the President or the President’s designee 24
849	849	pursuant to this section shall be exempt from disclo-25
850	850	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
851	851	ssavage on LAPJG3WLY3PROD with BILLS 30
852	852	•S 5016 IS
853	853	sure under section 552(b)(3) of title 5, United 1
854	854	States Code, and no such information or documen-2
855	855	tary material may be made public. 3
856	856	‘‘(2) E
857	857	XCEPTIONS.—Subject to appropriate con-4
858	858	fidentiality and classification requirements, the ex-5
859	859	emption from disclosure provided by paragraph (1) 6
860	860	shall not prevent the disclosure of the following: 7
861	861	‘‘(A) Information relevant to any adminis-8
862	862	trative or judicial action or proceeding. 9
863	863	‘‘(B) Information to Congress or any of 10
864	864	the appropriate committees or subcommittees of 11
865	865	Congress. 12
866	866	‘‘(C) Information important to national se-13
867	867	curity analysis or actions of the President to 14
868	868	any domestic governmental entity, or to any 15
869	869	foreign governmental entity of an ally or part-16
870	870	ner of the United States, under the exclusive di-17
871	871	rection and authorization of the President or 18
872	872	the President’s designee, only to the extent nec-19
873	873	essary for national security purposes, and sub-20
874	874	ject to appropriate confidentiality and classifica-21
875	875	tion requirements. 22
876	876	‘‘(D) Information that the parties have 23
877	877	consented to be disclosed to third parties. 24
878	878	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
879	879	ssavage on LAPJG3WLY3PROD with BILLS 31
880	880	•S 5016 IS
881	881	‘‘(3) APPLICABILITY TO CONGRESS .—Members 1
882	882	of Congress, and staff of either House of Congress 2
883	883	or any committee of Congress, are subject to the 3
884	884	limitations on disclosure of information and docu-4
885	885	mentary material that are applicable under this sub-5
886	886	section. 6
887	887	‘‘SEC. 806. REPORTING REQUIREMENTS. 7
888	888	‘‘(a) I
889	889	NGENERAL.—Not later than one year after the 8
890	890	date on which the regulations prescribed under section 9
891	891	807 take effect, and not less frequently than annually 10
892	892	thereafter, the President shall submit to the appropriate 11
893	893	congressional committees a report that— 12
894	894	‘‘(1) lists all notifications submitted under sec-13
895	895	tion 805 during the year preceding submission of the 14
896	896	report, disaggregated by— 15
897	897	‘‘(A) sector; 16
898	898	‘‘(B) covered activity; 17
899	899	‘‘(C) covered foreign entity; and 18
900	900	‘‘(D) country of concern; 19
901	901	‘‘(2) includes an assessment of whether to 20
902	902	amend the regulations, including whether to amend 21
903	903	the definition of ‘covered sectors’ to enhance na-22
904	904	tional security; 23
905	905	‘‘(3) provides additional context and informa-24
906	906	tion regarding trends in the sectors, the types of 25
907	907	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
908	908	ssavage on LAPJG3WLY3PROD with BILLS 32
909	909	•S 5016 IS
910	910	covered activity, and the countries involved in those 1
911	911	notifications, including— 2
912	912	‘‘(A) the locations of the relevant covered 3
913	913	foreign entities; and 4
914	914	‘‘(B) the countries in which the United 5
915	915	States persons, or foreign entities controlled by 6
916	916	a United States person, involved in relevant 7
917	917	covered activities are located; 8
918	918	‘‘(4) includes an assessment of the effectiveness 9
919	919	of measures imposed under this title, including ac-10
920	920	tions taken by the President as a result of the in-11
921	921	sight gained from the information contained in noti-12
922	922	fications submitted under section 805; and 13
923	923	‘‘(5) makes recommendations for— 14
924	924	‘‘(A) expanding existing Federal programs 15
925	925	to support the production or supply of tech-16
926	926	nologies and products in covered sectors in the 17
927	927	United States, including the potential of exist-18
928	928	ing authorities to address any related national 19
929	929	security concerns; and 20
930	930	‘‘(B) the continuation, expansion, or modi-21
931	931	fication of the implementation and administra-22
932	932	tion of this title. 23
933	933	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
934	934	ssavage on LAPJG3WLY3PROD with BILLS 33
935	935	•S 5016 IS
936	936	‘‘(b) FORM.—Each report required by this section 1
937	937	shall be submitted in unclassified form, but may include 2
938	938	a classified annex. 3
939	939	‘‘(c) P
940	940	ROHIBITION ON DISCLOSURE.—Information 4
941	941	contained in a report required by this section may be with-5
942	942	held from disclosure only to the extent otherwise permitted 6
943	943	by statute, except that all information included pursuant 7
944	944	to subsection (a)(1) shall be withheld from public disclo-8
945	945	sure. 9
946	946	‘‘SEC. 807. REQUIREMENT FOR REGULATIONS. 10
947	947	‘‘(a) I
948	948	NGENERAL.—Not later than 180 days after 11
949	949	the date on which the initial list of categories of tech-12
950	950	nologies and products is published in the Federal Register 13
951	951	pursuant to section 803(a), the President shall prescribe 14
952	952	regulations to carry out this title in accordance with sub-15
953	953	chapter II of chapter 5 and chapter 7 of title 5 (commonly 16
954	954	known as the ‘Administrative Procedure Act’). 17
955	955	‘‘(b) E
956	956	LEMENTS.—Regulations prescribed to carry 18
957	957	out this title shall— 19
958	958	‘‘(1) specify the types of activities that will be 20
959	959	considered to be covered activities, other than types 21
960	960	of activities described in section 801(3); 22
961	961	‘‘(2) specify the technologies and products in 23
962	962	covered sectors with respect to which covered activi-24
963	963	ties are prohibited under section 804 or require a 25
964	964	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
965	965	ssavage on LAPJG3WLY3PROD with BILLS 34
966	966	•S 5016 IS
967	967	notification under section 805, other than covered 1
968	968	sectors specified in section 801(5); 2
969	969	‘‘(3) provide for a process by which parties can 3
970	970	ask questions and get timely guidance as to whether 4
971	971	a covered activity is prohibited under section 804 or 5
972	972	requires a notification under section 805; and 6
973	973	‘‘(4) clarify the terms used in this title, to 7
974	974	maximize the effectiveness of this title. 8
975	975	‘‘(c) P
976	976	UBLICNOTICE ANDCOMMENT.—Regulations 9
977	977	issued pursuant to subsection (a) shall be subject to public 10
978	978	notice and comment. 11
979	979	‘‘(d) L
980	980	OW-BURDENREGULATIONS.—In prescribing 12
981	981	regulations under this section, the President shall, to the 13
982	982	extent practicable, structure the regulations— 14
983	983	‘‘(1) to minimize the cost and complexity of 15
984	984	compliance for affected parties; 16
985	985	‘‘(2) to ensure the benefits of the regulations 17
986	986	outweigh their costs; 18
987	987	‘‘(3) to adopt the least burdensome alternative 19
988	988	that achieves regulatory objectives; 20
989	989	‘‘(4) to prioritize transparency and stakeholder 21
990	990	involvement in the process of prescribing the regula-22
991	991	tions; and 23
992	992	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
993	993	ssavage on LAPJG3WLY3PROD with BILLS 35
994	994	•S 5016 IS
995	995	‘‘(5) to provide for regular review and stream-1
996	996	lining of regulations prescribed pursuant to this title 2
997	997	to reduce redundancy and complexity. 3
998	998	‘‘SEC. 808. MULTILATERAL ENGAGEMENT AND COORDINA-4
999	999	TION. 5
1000	1000	‘‘(a) I
1001	1001	NGENERAL.—The Secretary of State and the 6
1002	1002	head of the lead agency, in coordination with the Secretary 7
1003	1003	of Commerce, the United States Trade Representative, the 8
1004	1004	Director of National Intelligence, and the heads of other 9
1005	1005	relevant Federal agencies, as appropriate, should— 10
1006	1006	‘‘(1) conduct bilateral and multilateral engage-11
1007	1007	ment with the governments of countries that are al-12
1008	1008	lies and partners of the United States to promote 13
1009	1009	and increase coordination of protocols and proce-14
1010	1010	dures to facilitate the effective implementation of, 15
1011	1011	and appropriate compliance with, the prohibitions 16
1012	1012	and notifications pursuant to this title; 17
1013	1013	‘‘(2) upon adoption of protocols and procedures 18
1014	1014	described in paragraph (1), work with those govern-19
1015	1015	ments to establish mechanisms for sharing informa-20
1016	1016	tion, including trends, with respect to such activities; 21
1017	1017	and 22
1018	1018	‘‘(3) work with and encourage the governments 23
1019	1019	of certain countries that are allies and partners of 24
1020	1020	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
1021	1021	ssavage on LAPJG3WLY3PROD with BILLS 36
1022	1022	•S 5016 IS
1023	1023	the United States to develop similar mechanisms of 1
1024	1024	their own. 2
1025	1025	‘‘(b) S
1026	1026	TRATEGY FORMULTILATERALENGAGEMENT 3
1027	1027	ANDCOORDINATION.—Not later than 180 days after the 4
1028	1028	date of the enactment of this title, the Secretary of State 5
1029	1029	and the head of the lead agency, in coordination with the 6
1030	1030	heads of other relevant Federal agencies, should— 7
1031	1031	‘‘(1) develop a strategy to work with the gov-8
1032	1032	ernments of countries that are allies and partners of 9
1033	1033	the United States to develop mechanisms that are 10
1034	1034	comparable to the prohibitions and notifications pur-11
1035	1035	suant to this title; and 12
1036	1036	‘‘(2) assess opportunities to provide technical 13
1037	1037	assistance to those countries with respect to the de-14
1038	1038	velopment of those mechanisms. 15
1039	1039	‘‘(c) R
1040	1040	EPORT.—Not later than one year after the date 16
1041	1041	of the enactment of this title, and annually thereafter for 17
1042	1042	4 years, the Secretary of State shall submit to the appro-18
1043	1043	priate congressional committees a report that includes— 19
1044	1044	‘‘(1) a discussion of any strategy developed pur-20
1045	1045	suant to subsection (b)(1), including key tools and 21
1046	1046	objectives for the development of comparable mecha-22
1047	1047	nisms by the governments of countries that are allies 23
1048	1048	and partners of the United States; 24
1049	1049	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
1050	1050	ssavage on LAPJG3WLY3PROD with BILLS 37
1051	1051	•S 5016 IS
1052	1052	‘‘(2) a list of countries that are allies and part-1
1053	1053	ners of the United States to target for cooperation 2
1054	1054	in developing their own screening programs; 3
1055	1055	‘‘(3) the status of the implementation and out-4
1056	1056	comes of the strategy; and 5
1057	1057	‘‘(4) a description of impediments to the estab-6
1058	1058	lishment of comparable mechanisms by governments 7
1059	1059	of countries that are allies and partners of the 8
1060	1060	United States. 9
1061	1061	‘‘SEC. 809. AUTHORIZATION OF APPROPRIATIONS. 10
1062	1062	‘‘There are authorized to be appropriated, for each 11
1063	1063	of the first 2 fiscal years beginning on or after the date 12
1064	1064	of the enactment of this title, such sums as may be nec-13
1065	1065	essary to carry out this title, including to provide outreach 14
1066	1066	to industry and persons affected by this title. Such 15
1067	1067	amounts shall be derived from amounts otherwise author-16
1068	1068	ized to be appropriated to the President. 17
1069	1069	‘‘SEC. 810. HIRING AUTHORITY. 18
1070	1070	‘‘(a) I
1071	1071	NGENERAL.—The head of lead agency may ap-19
1072	1072	point, without regard to the provisions of sections 3309 20
1073	1073	through 3318 of title 5, United States Code, not more 21
1074	1074	than 25 candidates directly to positions in the competitive 22
1075	1075	service (as defined in section 2102 of that title) in that 23
1076	1076	agency. 24
1077	1077	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
1078	1078	ssavage on LAPJG3WLY3PROD with BILLS 38
1079	1079	•S 5016 IS
1080	1080	‘‘(b) PRIMARYRESPONSIBILITY.—The primary re-1
1081	1081	sponsibility of individuals in positions authorized under 2
1082	1082	subsection (a) shall be to administer this title. 3
1083	1083	‘‘SEC. 811. PENALTIES AND ENFORCEMENT. 4
1084	1084	‘‘(a) U
1085	1085	NLAWFULACTS.—It shall be unlawful for a 5
1086	1086	United States person to violate, attempt to violate, con-6
1087	1087	spire to violate, or cause a violation of any license, order, 7
1088	1088	regulation, or prohibition issued under this title. 8
1089	1089	‘‘(b) C
1090	1090	IVILPENALTIES.— 9
1091	1091	‘‘(1) P
1092	1092	ENALTIES.—A civil penalty may be im-10
1093	1093	posed on any person who commits an unlawful act 11
1094	1094	described in subsection (a) in an amount not to ex-12
1095	1095	ceed the greater of— 13
1096	1096	‘‘(A) $5,000,000; or 14
1097	1097	‘‘(B) an amount that is twice the amount 15
1098	1098	of the covered activity that is the basis of the 16
1099	1099	violation with respect to which the penalty is 17
1100	1100	imposed. 18
1101	1101	‘‘(c) C
1102	1102	RIMINALPENALTIES.—A person who willfully 19
1103	1103	commits, willfully attempts to commit, or willfully con-20
1104	1104	spires to commit, or aids or abets in the commission of, 21
1105	1105	an unlawful act described in subsection (a) shall, upon 22
1106	1106	conviction, be fined not more than $1,000,000, or if an 23
1107	1107	individual, may be imprisoned for not more than 20 years, 24
1108	1108	or both. 25
1109	1109	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
1110	1110	ssavage on LAPJG3WLY3PROD with BILLS 39
1111	1111	•S 5016 IS
1112	1112	‘‘(d) ENFORCEMENT.—The Attorney General may 1
1113	1113	seek appropriate relief, including a temporary or perma-2
1114	1114	nent injunction, restraining order, divestment relief, or 3
1115	1115	other such other order as the Attorney General may deter-4
1116	1116	mine to be proper, in the district courts of the United 5
1117	1117	States in order to implement and enforce this title and 6
1118	1118	any regulation thereunder. 7
1119	1119	‘‘SEC. 812. RULE OF CONSTRUCTION. 8
1120	1120	‘‘Nothing in this title may be construed to— 9
1121	1121	‘‘(1) restrain or deter United States activities 10
1122	1122	abroad if such activities do not pose a risk to the na-11
1123	1123	tional security of the United States; or 12
1124	1124	‘‘(2) alter or negate the authority of the Presi-13
1125	1125	dent under any authority, process, regulation, inves-14
1126	1126	tigation, enforcement measure, or review provided by 15
1127	1127	or established under any other provision of Federal 16
1128	1128	law, or any other authority of the President or Con-17
1129	1129	gress under the Constitution of the United States. 18
1130	1130	‘‘SEC. 813. NATIONAL INTEREST WAIVER. 19
1131	1131	‘‘(a) I
1132	1132	NGENERAL.—Subject to subsection (b), the 20
1133	1133	President is authorized to exempt from any applicable pro-21
1134	1134	hibition or notification requirement under this title any 22
1135	1135	activity determined by the President, in consultation with 23
1136	1136	the heads of relevant Federal agencies, as appropriate, to 24
1137	1137	be in the national interest of the United States. 25
1138	1138	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
1139	1139	ssavage on LAPJG3WLY3PROD with BILLS 40
1140	1140	•S 5016 IS
1141	1141	‘‘(b) CONGRESSIONAL NOTIFICATION.—The Presi-1
1142	1142	dent shall— 2
1143	1143	‘‘(1) notify the appropriate congressional com-3
1144	1144	mittees not later than 48 hours after issuing a waiv-4
1145	1145	er under subsection (a); and 5
1146	1146	‘‘(2) include in such notification an identifica-6
1147	1147	tion of the national interest justifying the use of the 7
1148	1148	waiver.’’. 8
1149	1149	SEC. 5. LIMITATION ON TRADE AUTHORITIES PROCEDURES 9
1150	1150	RELATING TO REQUIREMENTS ON CONTENT 10
1151	1151	OF GOODS FROM NONMARKET ECONOMY 11
1152	1152	COUNTRIES. 12
1153	1153	Section 106(b) of the Bipartisan Congressional Trade 13
1154	1154	Priorities and Accountability Act of 2015 (19 U.S.C. 14
1155	1155	4205(b)) is amended by adding at the end the following: 15
1156	1156	‘‘(7) L
1157	1157	IMITATIONS ON PROCEDURES RELATING 16
1158	1158	TO ORIGINATION OF CONTENT OF GOODS FROM NON -17
1159	1159	MARKET ECONOMY COUNTRIES .— 18
1160	1160	‘‘(A) I
1161	1161	N GENERAL.—The trade authorities 19
1162	1162	procedures shall not apply to an implementing 20
1163	1163	bill submitted with respect to a trade agreement 21
1164	1164	or trade agreements entered into under section 22
1165	1165	103(b) unless the rules of origin requirements 23
1166	1166	under such agreement or agreements— 24
1167	1167	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
1168	1168	ssavage on LAPJG3WLY3PROD with BILLS 41
1169	1169	•S 5016 IS
1170	1170	‘‘(i) with respect to rules of origin 1
1171	1171	based on value content of a good, require 2
1172	1172	that, of the content of a good qualifying 3
1173	1173	for preferential treatment under the agree-4
1174	1174	ment or agreements that does not originate 5
1175	1175	(as specified in those rules) in a country 6
1176	1176	that is party to the agreement or agree-7
1177	1177	ments— 8
1178	1178	‘‘(I) during the 5-year period fol-9
1179	1179	lowing the entry into force of the 10
1180	1180	agreement or agreements, not more 11
1181	1181	than 20 percent of that content may 12
1182	1182	originate in a nonmarket economy 13
1183	1183	country; and 14
1184	1184	‘‘(II) after the period specified in 15
1185	1185	subclause (I), not more than 10 per-16
1186	1186	cent of that content may originate in 17
1187	1187	a nonmarket economy country; and 18
1188	1188	‘‘(ii) with respect to rules of origin 19
1189	1189	that are not based on value content of a 20
1190	1190	good, are consistent with the requirements 21
1191	1191	under clause (i) based on processing re-22
1192	1192	quirements or tariff shifts as opposed to 23
1193	1193	value content. 24
1194	1194	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
1195	1195	ssavage on LAPJG3WLY3PROD with BILLS 42
1196	1196	•S 5016 IS
1197	1197	‘‘(B) NONMARKET ECONOMY COUNTRY DE -1
1198	1198	FINED.—In this paragraph, the term ‘non-2
1199	1199	market economy country’ has the meaning 3
1200	1200	given that term in section 771(18) of the Tariff 4
1201	1201	Act of 1930 (19 U.S.C. 1677(18)).’’. 5
1202	1202	SEC. 6. STRATEGY AND OUTREACH ON RISKS POSED BY 6
1203	1203	PEOPLE’S REPUBLIC OF CHINA SMARTPORT 7
1204	1204	TECHNOLOGY. 8
1205	1205	(a) S
1206	1206	TRATEGY ANDOUTREACHREQUIRED.—The Di-9
1207	1207	rector of the National Counterintelligence and Security 10
1208	1208	Center shall develop a strategy and conduct outreach to 11
1209	1209	United States industry, including shipping companies, 12
1210	1210	port operators, and logistics firms, on the risks of 13
1211	1211	smartport technology of the People’s Republic of China 14
1212	1212	and other related risks posed by entities of the People’s 15
1213	1213	Republic of China, including LOGINK, China Ocean Ship-16
1214	1214	ping Company, Limited (COSCO), China Communications 17
1215	1215	Construction Company, Limited (CCCC), China Media 18
1216	1216	Group (CMG), and Shanghai Zhenhua Heavy Industries 19
1217	1217	Company Limited (ZPMC), to the national security of the 20
1218	1218	United States, the security of United States supply chains, 21
1219	1219	and commercial activity, including with respect to delays, 22
1220	1220	interruption, and lockout of access to systems and tech-23
1221	1221	nologies that enable the free flow of commerce. 24
1222	1222	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00042 Fmt 6652 Sfmt 6201 E:\BILLS\S5016.IS S5016
1223	1223	ssavage on LAPJG3WLY3PROD with BILLS 43
1224	1224	•S 5016 IS
1225	1225	(b) CONSISTENCYWITHEXECUTIVEORDERS AND 1
1226	1226	O
1227	1227	THERSTATUTORYAUTHORITIES.—The Director shall 2
1228	1228	carry out subsection (a) in a manner that is consistent 3
1229	1229	with the following: 4
1230	1230	(1) Part 6 of title 33, Code of Federal Regula-5
1231	1231	tions, as amended by Executive Order 14116 (89 6
1232	1232	Fed. Reg. 13971; relating to amending regulations 7
1233	1233	relating to the safeguarding of vessels, harbors, 8
1234	1234	ports, and waterfront facilities of the United States). 9
1235	1235	(2) Executive Order 14017 (86 Fed. Reg. 10
1236	1236	11849; relating to America’s supply chains), or suc-11
1237	1237	cessor order. 12
1238	1238	(3) Section 825 of the National Defense Au-13
1239	1239	thorization Act for Fiscal Year 2024 (Public Law 14
1240	1240	118–31). 15
1241	1241	(c) C
1242	1242	OORDINATION.—The Director shall carry out 16
1243	1243	subsection (a) in coordination with the Commandant of 17
1244	1244	the U.S. Coast Guard, the Director of the Federal Bureau 18
1245	1245	of Investigation, the Commander of the Office of Naval 19
1246	1246	Intelligence, and such other heads of Federal agencies as 20
1247	1247	the Director considers appropriate. 21
1248	1248	Æ
1249	1249	VerDate Sep 11 2014 03:15 Sep 17, 2024 Jkt 049200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6301 E:\BILLS\S5016.IS S5016
1250	1250	ssavage on LAPJG3WLY3PROD with BILLS