II
118THCONGRESS
2
DSESSION S. 5016
To combat the economic aggression of the People’s Republic of China, and
for other purposes.
IN THE SENATE OF THE UNITED STATES
SEPTEMBER10, 2024
Mr. C
ASEYintroduced the following bill; which was read twice and referred
to the Committee on Banking, Housing, and Urban Affairs
A BILL
To combat the economic aggression of the People’s Republic
of China, and for other purposes.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Combat Chinese Eco-4
nomic Aggression Act of 2024’’. 5
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SEC. 2. REVIEW BY COMMITTEE ON FOREIGN INVESTMENT 1
IN THE UNITED STATES OF INVESTMENTS IM-2
PACTING ECONOMIC OR TECHNOLOGICAL 3
COMPETITIVENESS. 4
(a) I
NGENERAL.—Subsection (a)(4) of section 721 5
of the Defense Production Act of 1950 (50 U.S.C. 4565) 6
is amended— 7
(1) in subparagraph (A)— 8
(A) in clause (i), by striking ‘‘; and’’ and 9
inserting a semicolon; 10
(B) in clause (ii)— 11
(i) by striking ‘‘clauses (ii) through 12
(v)’’ and inserting ‘‘any of clauses (ii) 13
through (iv) or clause (vii)’’; and 14
(ii) by striking the period at the end 15
and inserting ‘‘; and’’; 16
(C) by adding at the end the following: 17
‘‘(iii) any transaction described in 18
clause (v) or (vi) of subparagraph (B) pro-19
posed or pending after the date of the en-20
actment of this clause.’’; and 21
(2) in subparagraph (B)— 22
(A) by redesignating clause (v) as clause 23
(vii); and 24
(B) by inserting after clause (iv) the fol-25
lowing: 26
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‘‘(v) Any other investment, subject to 1
regulations prescribed under subparagraph 2
(D), by a foreign person in a United States 3
business that could support the acquisition 4
by a foreign country of capabilities to at-5
tain technological self-sufficiency or impair 6
the economic and technological competi-7
tiveness of the United States, including— 8
‘‘(I) an investment in a United 9
States business that has received di-10
rect funding from, or has been award-11
ed a contract by, the Department of 12
Defense, the Department of Com-13
merce, the Department of Energy, or 14
another Federal agency; or 15
‘‘(II) any other investment the 16
Committee determines, by regulation, 17
may provide to the foreign person ac-18
cess to expertise, business networks, 19
or production methods critical to 20
maintaining the economic and techno-21
logical competitiveness of the United 22
States. 23
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‘‘(vi) Any other investment, subject to 1
regulations prescribed under subparagraph 2
(D)— 3
‘‘(I) in a United States business 4
that produces, designs, tests, manu-5
factures, fabricates, or develops one or 6
more critical technologies; and 7
‘‘(II) by a foreign entity of con-8
cern (as defined in section 9901 of the 9
William M. (Mac) Thornberry Na-10
tional Defense Authorization Act for 11
Fiscal Year 2021 (15 U.S.C. 4651)) 12
that is organized under the laws of or 13
otherwise subject to the jurisdiction of 14
the People’s Republic of China.’’. 15
(b) M
ANDATORY DECLARATIONS.—Section 16
721(b)(1)(C)(v)(IV) of the Defense Production Act of 17
1950 (50 U.S.C. 4565(b)(1)(C)(v)(IV)) is amended by 18
adding at the end the following: 19
‘‘(hh) R
EQUIRED DECLARA -20
TIONS FOR CERTAIN TRANS -21
ACTIONS.—The parties to a cov-22
ered transaction shall submit a 23
declaration described in sub-24
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clause (I) with respect to the 1
transaction if— 2
‘‘(AA) a foreign person 3
that is a party to the trans-4
action is a national of the 5
People’s Republic of China 6
or an entity organized under 7
the laws of or otherwise sub-8
ject to the jurisdiction of the 9
People’s Republic of China; 10
or 11
‘‘(BB) the transaction 12
is in the metallurgy, tele-13
communications, energy, in-14
dustrial gas, chemicals, or 15
petrochemicals sector or any 16
other sector the Secretary 17
determines appropriate for 18
purposes of this item.’’. 19
(c) A
NALYSIS BYINTERNATIONAL TRADEADMINIS-20
TRATION.—Section 721(b)(1) of the Defense Production 21
Act of 1950 (50 U.S.C. 4565(b)(1)) is amended by adding 22
at the end the following: 23
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‘‘(I) ANALYSIS BY INTERNATIONAL TRADE 1
ADMINISTRATION WITH RESPECT TO CERTAIN 2
TRANSACTIONS.— 3
‘‘(i) I
N GENERAL.—In the case of a 4
review of a covered transaction described 5
in clause (ii), the Secretary of Commerce, 6
in consultation with other members of the 7
Committee as appropriate, shall conduct 8
an analysis of— 9
‘‘(I) the sector or industry in 10
which the United States business in-11
volved in the transaction operates; 12
‘‘(II) the cumulative control of, 13
or pattern of recent transactions by, 14
foreign persons, including, directly or 15
indirectly, foreign governments, in 16
that sector or industry; and 17
‘‘(III) the effect of foreign invest-18
ment in that sector or industry on the 19
national security of the United States. 20
‘‘(ii) T
RANSACTIONS DESCRIBED .—A 21
covered transaction described in this clause 22
is a covered transaction— 23
‘‘(I) described in clause (vi) or 24
(vii) of subsection (a)(4)(B); and 25
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‘‘(II) to which a foreign person 1
that is a national of the People’s Re-2
public of China or an entity organized 3
under the laws of or otherwise subject 4
to the jurisdiction of the People’s Re-5
public of China is a party.’’. 6
(d) A
UTHORIZATION OF APPROPRIATIONS.—There 7
are authorized to be appropriated for the Committee on 8
Foreign Investment in the United States such sums as 9
may be necessary to carry out the amendments made by 10
this section. 11
SEC. 3. ENHANCED SECURITIES DISCLOSURE REQUIRE-12
MENTS. 13
(a) D
EFINITIONS.—In this section: 14
(1) C
OMMISSION.—The term ‘‘Commission’’ 15
means the Securities and Exchange Commission. 16
(2) C
OUNTRY OF CONCERN .—The term ‘‘coun-17
try of concern’’— 18
(A) has the meaning given the term ‘‘cov-19
ered nation’’ in section 4872(d) of title 10, 20
United States Code; and 21
(B) includes a jurisdiction that the Com-22
mission, in consultation with the Secretary of 23
State and the Secretary of the Treasury, deter-24
mines to be subject to the political and legal 25
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control of a covered nation, as defined in sec-1
tion 4872(d) of title 10, United States Code. 2
(3) C
OVERED ENTITY.—The term ‘‘covered en-3
tity’’ means an entity or person that is required to 4
file Form PF. 5
(4) E
XEMPT REPORTING ADVISER .—The term 6
‘‘exempt reporting adviser’’ means an investment ad-7
viser described in section 275.204–4(a) of title 17, 8
Code of Federal Regulations, or any successor regu-9
lation. 10
(5) F
ORM ADV.—The term ‘‘Form ADV’’ 11
means the form described in section 279.1 of title 12
17, Code of Federal Regulations, or any successor 13
regulation. 14
(6) F
ORM PF.—The term ‘‘Form PF’’ means 15
the form described in section 279.9 of title 17, Code 16
of Federal Regulations, or any successor regulation. 17
(7) P
RIVATE FUND.—The term ‘‘private fund’’ 18
has the meaning given the term in section 202(a) of 19
the Investment Advisers Act of 1940 (15 U.S.C. 20
80b–2(a)). 21
(8) P
RIVATE FUND ASSETS.—The term ‘‘private 22
fund assets’’ has the meaning given the term in sec-23
tion 275.204(b)–1 of title 17, Code of Federal Regu-24
lations, or any successor regulation. 25
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(b) ENHANCEDDISCLOSUREREQUIREMENTS FOR 1
A
DVISERS OFPRIVATEFUNDS.— 2
(1) R
EQUIREMENTS.— 3
(A) I
N GENERAL.—Not later than 1 year 4
after the date of enactment of this Act, the 5
Commission shall amend Form PF and Form 6
ADV, and the rules of the Commission gov-7
erning the submission of Form PF and Form 8
ADV, to, subject to subparagraph (B), require 9
each covered entity and each exempt reporting 10
adviser to annually disclose when submitting 11
Form PF or Form ADV, respectively, the total 12
private fund assets in countries of concern at-13
tributable to the private funds advised by the 14
covered entity or exempt reporting adviser, as 15
applicable, which shall be broken down by the 16
percentage of those assets in each country of 17
concern. 18
(B) A
PPLICATION.—For the purposes of 19
subparagraph (A), the Commission shall deter-20
mine whether a private fund asset is in a coun-21
try of concern based on— 22
(i) the amount of capital that is in-23
vested in an entity (including a subsidiary 24
of an entity)— 25
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(I) that has a physical presence 1
or employees in that country of con-2
cern; or 3
(II) the plurality of the sales of 4
which are from that country of con-5
cern; and 6
(ii) the proportion of the total assets 7
and liabilities of an entity described in 8
clause (i) that are located in that country 9
of concern. 10
(2) R
EPORTING BY COMMISSION .— 11
(A) P
UBLICLY AVAILABLE REPORTS .— 12
(i) I
N GENERAL.—Not later than 1 13
year after the date on which the Commis-14
sion makes the amendments required 15
under paragraph (1), and not less fre-16
quently than annually thereafter, the Com-17
mission shall prepare and make publicly 18
available a report containing a list of cov-19
ered entities and exempt reporting advisers 20
that, for the period covered by the report, 21
have disclosed more than 0 private fund 22
assets under Form PF or Form ADV (as 23
amended pursuant to that subsection) in at 24
least 1 country of concern, which shall be 25
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aggregated by the covered entity or exempt 1
reporting adviser making that disclosure. 2
(ii) A
DDITIONAL REQUIREMENTS .— 3
Each report prepared and made available 4
by the Commission under clause (i) shall— 5
(I) be aggregated by covered en-6
tity or exempt reporting adviser; and 7
(II) include the percentage of pri-8
vate fund assets disclosed by a cov-9
ered entity or exempt reporting ad-10
viser, as applicable. 11
(B) R
ULE OF CONSTRUCTION .—Nothing in 12
this paragraph may be construed to permit the 13
Commission to make available any information 14
that appears on Form PF or Form ADV other 15
than the information that is included on Form 16
PF or Form ADV as a result of the require-17
ments under paragraph (1). 18
(c) E
XEMPTEDTRANSACTIONS.—The Securities Ex-19
change Act of 1934 (15 U.S.C. 78a et seq.) is amended 20
by inserting after section 13A (15 U.S.C. 78m–1) the fol-21
lowing: 22
‘‘SEC. 13B. DISCLOSURE REQUIREMENTS RELATING TO 23
CERTAIN EXEMPTED TRANSACTIONS. 24
‘‘(a) D
EFINITIONS.—In this section: 25
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‘‘(1) BENEFICIAL OWNER .—The term ‘bene-1
ficial owner’ means a person that is determined to 2
be a beneficial owner under section 240.13d–3 of 3
title 17, Code of Federal Regulations, or any suc-4
cessor regulation. 5
‘‘(2) C
OUNTRY OF CONCERN .—The term ‘coun-6
try of concern’— 7
‘‘(A) has the meaning given the term ‘cov-8
ered nation’ in section 4872(d) of title 10, 9
United States Code; and 10
‘‘(B) includes a jurisdiction that the Com-11
mission, in consultation with the Secretary of 12
State and the Secretary of the Treasury, deter-13
mines to be subject to the political and legal 14
control of a covered nation, as defined in sec-15
tion 4872(d) of title 10, United States Code. 16
‘‘(3) C
OVERED EXEMPTED TRANSACTION .—The 17
term ‘covered exempted transaction’ means an offer 18
or sale of a security that is— 19
‘‘(A) exempt from registration under sec-20
tion 5 of the Securities Act of 1933 (15 U.S.C. 21
77e); and 22
‘‘(B) structured or intended to comply 23
with— 24
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‘‘(i) section 230.506(b) of title 17, 1
Code of Federal regulations, or any suc-2
cessor regulation; 3
‘‘(ii) sections 230.901, 230.902, and 4
230.903 of title 17, Code of Federal Regu-5
lations, or any successor regulations; or 6
‘‘(iii) section 230.144A of title 17, 7
Code of Federal Regulations, or any suc-8
cessor regulation. 9
‘‘(b) R
EQUIREMENT.— 10
‘‘(1) I
N GENERAL.—Notwithstanding any other 11
provision of law, in the case of an issuer that con-12
ducts a covered exempted transaction described in 13
paragraph (2), that issuer shall provide to the Com-14
mission, at such time and in such manner as the 15
Commission may prescribe, the following informa-16
tion: 17
‘‘(A) The identity of the issuer. 18
‘‘(B) The place of incorporation of the 19
issuer. 20
‘‘(C) Whether the issuer is associated with 21
at least 1 consolidated entity, the plurality of 22
the assets of which are in a country of concern. 23
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‘‘(D) Whether the issuer is associated with 1
at least 1 consolidated entity that is incor-2
porated in a country of concern. 3
‘‘(E) The amount of securities sold pursu-4
ant to the covered exempted transaction and 5
the net proceeds to the issuer. 6
‘‘(F) The beneficial owners of the issuer. 7
‘‘(G) The intended use of the proceeds 8
from the covered exempted transaction, includ-9
ing each country in which the issuer intends to 10
invest those proceeds, which shall be broken 11
down by the percentage of net proceeds by in-12
dustry within each such country. 13
‘‘(H) The exemption the issuer relies on 14
with respect to the covered exempted trans-15
action. 16
‘‘(2) P
ARTICULAR COVERED EXEMPTED TRANS -17
ACTION DESCRIBED .—A covered exempted trans-18
action described in this paragraph is, with respect to 19
the issuer offering or selling the security that is the 20
subject of the covered exempted transaction, either 21
of the following instances: 22
‘‘(A) An offer or sale of securities in an 23
amount that is not less than $25,000,000. 24
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‘‘(B) An offer or sale of a security such 1
that the offer or sale, together with all covered 2
exempted transactions by that issuer during the 3
1-year period preceding the date on which the 4
issuer offers or sells the security, constitutes of-5
fers or sales in the aggregate of an amount that 6
is not less than $50,000,000. 7
‘‘(c) A
UTHORITYTOREVISE AND PROMULGATE 8
R
ULES, REGULATIONS, ANDFORMS.—The Commission 9
shall, for the protection of investors and fair and orderly 10
markets— 11
‘‘(1) revise and issue such rules, regulations, 12
and forms as may be necessary to carry out this sec-13
tion; and 14
‘‘(2) issue rules to set conditions that limit the 15
future use of covered exempted transactions for 16
issuers that do not comply with the disclosure re-17
quirements of this section. 18
‘‘(d) A
PPLICABILITY.—This section shall apply with 19
respect to any covered exempted transaction that occurs 20
on or after the date that is 1 year after the date of enact-21
ment of this section. 22
‘‘(e) R
EPORTS.—The Commission shall, on a quar-23
terly basis, prepare and make publicly available a report 24
that includes all information submitted by an issuer under 25
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this section during the quarter covered by the report, if 1
that issuer— 2
‘‘(1) is— 3
‘‘(A) incorporated in a country of concern; 4
or 5
‘‘(B) incorporated outside of a country of 6
concern and is associated with at least 1 con-7
solidated entity— 8
‘‘(i) the plurality of the assets of 9
which are in a country of concern; or 10
‘‘(ii) that is incorporated in a country 11
of concern; or 12
‘‘(2) discloses in a filing made pursuant to this 13
section that the issuer intends to invest the proceeds 14
from a covered exempted transaction in a country of 15
concern.’’. 16
SEC. 4. PROTECTION OF COVERED SECTORS. 17
The Defense Production Act of 1950 (50 U.S.C. 18
4501 et seq.) is amended by adding at the end the fol-19
lowing: 20
‘‘TITLE VIII—PROTECTION OF 21
COVERED SECTORS 22
‘‘SEC. 801. DEFINITIONS. 23
‘‘In this title: 24
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‘‘(1) APPROPRIATE CONGRESSIONAL COMMIT -1
TEES.—The term ‘appropriate congressional com-2
mittees’ means— 3
‘‘(A) the Committee on Foreign Affairs, 4
the Committee on Financial Services, the Com-5
mittee on Ways and Means, the Committee on 6
Appropriations, and the Permanent Select Com-7
mittee on Intelligence of the House of Rep-8
resentatives; and 9
‘‘(B) the Committee on Foreign Relations, 10
the Committee on Banking, Housing, and 11
Urban Affairs, the Committee on Finance, the 12
Committee on Appropriations, and the Select 13
Committee on Intelligence of the Senate. 14
‘‘(2) C
OUNTRY OF CONCERN .—The term ‘coun-15
try of concern’ includes— 16
‘‘(A) the Democratic People’s Republic of 17
North Korea; 18
‘‘(B) the People’s Republic of China, in-19
cluding the Hong Kong Special Administrative 20
Region and the Macau Special Administrative 21
Region; 22
‘‘(C) the Russian Federation; 23
‘‘(D) the Islamic Republic of Iran; and 24
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‘‘(E) any other country that the President 1
has identified as engaging in a comprehensive, 2
long-term strategy that directs, facilitates, or 3
otherwise supports advancements in sensitive 4
technologies and products that are critical to 5
the military, intelligence, surveillance, or cyber- 6
enabled capabilities of the country to counter 7
United States capabilities in a way that threat-8
ens the national security of the United States; 9
and 10
‘‘(F) any other country the President de-11
termines necessary to ensure a country de-12
scribed in any of subparagraphs (A) through 13
(E) is unable to circumvent the provisions of 14
this title and the regulations issued pursuant to 15
this title. 16
‘‘(3) C
OVERED ACTIVITY.— 17
‘‘(A) I
N GENERAL.—Subject to such regu-18
lations as may be prescribed in accordance with 19
section 807, and except as provided in subpara-20
graph (B), the term ‘covered activity’ means 21
any activity engaged in by a United States per-22
son that involves— 23
‘‘(i) an acquisition by such United 24
States person of an equity interest or con-25
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tingent equity interest, or monetary capital 1
contribution, in a covered foreign entity, 2
directly or indirectly, by contractual com-3
mitment or otherwise; 4
‘‘(ii) an arrangement for an interest 5
held by such United States person in the 6
short- or long-term debt obligations of a 7
covered foreign entity that includes govern-8
ance rights that are characteristic of an 9
equity investment, management, or other 10
important rights; 11
‘‘(iii) the establishment of a wholly 12
owned subsidiary in a country of concern, 13
such as a greenfield investment, for the 14
purpose of production, design, testing, 15
manufacturing, fabrication, or development 16
related to one or more covered sectors; 17
‘‘(iv) the establishment by such 18
United States person of a joint venture in 19
a country of concern or with a covered for-20
eign entity for the purpose of production, 21
design, testing, manufacturing, fabrication, 22
or research, or other contractual or other 23
commitments involving a covered foreign 24
entity to jointly research and develop new 25
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innovation, including through the transfer 1
of capital or intellectual property or other 2
business proprietary information; or 3
‘‘(v) the acquisition by a United 4
States person with a covered foreign entity 5
of— 6
‘‘(I) operational cooperation, such 7
as through supply or support arrange-8
ments; 9
‘‘(II) the right to board represen-10
tation (as an observer, even if limited, 11
or as a member) or an executive role 12
(as may be defined through regula-13
tion) in a covered foreign entity; 14
‘‘(III) the ability to direct or in-15
fluence such operational decisions as 16
may be defined through such regula-17
tions; 18
‘‘(IV) formal governance rep-19
resentation in any operating affiliate, 20
such as a portfolio company, of a cov-21
ered foreign entity; or 22
‘‘(V) a new relationship to share 23
or provide business services, such as 24
financial services, marketing services, 25
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maintenance, or assembly functions; 1
or 2
‘‘(vi) knowingly directing transactions 3
by foreign persons that would constitute 4
covered activity if engaged in by a United 5
States person. 6
‘‘(B) E
XCEPTIONS.—The term ‘covered ac-7
tivity’ does not include— 8
‘‘(i) any transaction the value of 9
which the President determines is de mini-10
mis, as defined in regulations prescribed in 11
accordance with section 807; 12
‘‘(ii) any category of transactions that 13
the President determines is in the national 14
interest of the United States, as may be 15
defined in regulations prescribed in accord-16
ance with section 807; 17
‘‘(iii) an investment in— 18
‘‘(I) a publicly traded security (as 19
such term is defined in section 20
3(a)(10) of the Securities Exchange 21
Act of 1934 (15 U.S.C. 78c(a)(10))); 22
‘‘(II) an index fund, mutual 23
fund, exchange-traded fund, or a simi-24
lar instrument (including associated 25
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derivatives) offered by an investment 1
company (as such term is defined in 2
section 3(a)(1) of the Investment 3
Company Act of 1940 (15 U.S.C. 4
80a–3(a)(1))), or by a private invest-5
ment fund; or 6
‘‘(III) a venture capital fund, pri-7
vate equity fund, fund of funds, or 8
other pooled investment funds, as the 9
limited partner, in each case in which 10
the limited partner’s contribution is 11
solely capital in a limited partnership 12
structure and— 13
‘‘(aa) the limited partner 14
cannot make managerial deci-15
sions, is not responsible for any 16
debts beyond its investment, and 17
does not have the ability (for-18
mally or informally) to influence 19
or participate in the fund’s or a 20
covered foreign entity’s decision 21
making or operations; or 22
‘‘(bb) the investment is 23
below a de minimis threshold to 24
be determined by the President; 25
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‘‘(iv) the acquisition of the equity or 1
other interest owned or held by a covered 2
foreign entity in an entity or assets located 3
outside of a country of concern in which 4
the United States person is acquiring all 5
interests in the entity or assets held by 6
covered foreign entity; 7
‘‘(v) an intracompany transfer of 8
funds from a United States parent com-9
pany to a subsidiary located in a country 10
of concern, as specified in regulations pre-11
scribed in accordance with section 807; 12
‘‘(vi) a transaction made pursuant to 13
a binding, uncalled capital commitment en-14
tered into before the date on which the 15
regulations prescribed in accordance with 16
section 807 take effect; or 17
‘‘(vii) any ordinary or administrative 18
business transaction as may be defined in 19
such regulations. 20
‘‘(4) C
OVERED FOREIGN ENTITY .—Subject to 21
regulations prescribed in accordance with section 22
807, the term ‘covered foreign entity’ means the fol-23
lowing: 24
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‘‘(A) Any entity that is incorporated in, 1
has a principal place of business in, or is orga-2
nized under the laws of a country of concern. 3
‘‘(B) Any entity the equity securities of 4
which are traded in the ordinary course of busi-5
ness on one or more exchanges in a country of 6
concern. 7
‘‘(C) Any agency or instrumentality of the 8
government of a country of concern. 9
‘‘(D) Any entity in which any entity de-10
scribed in subparagraph (A), (B), or (C) holds, 11
individually or in the aggregate, directly or indi-12
rectly, an ownership interest of greater than 50 13
percent. 14
‘‘(E) Any other entity that is not a United 15
States person and that meets such criteria as 16
may be specified by the President in such regu-17
lations prescribed in accordance with section 18
807. 19
‘‘(5) C
OVERED SECTORS .—Subject to regula-20
tions prescribed in accordance with section 807, the 21
term ‘covered sectors’ includes sectors within the fol-22
lowing areas: 23
‘‘(A) Semiconductors and microelectronics. 24
‘‘(B) Artificial intelligence. 25
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‘‘(C) Quantum information science and 1
technology. 2
‘‘(D) Hypersonics. 3
‘‘(E) Satellite-based communications. 4
‘‘(F) Networked laser scanning systems 5
with both military and civilian applications. 6
‘‘(6) L
EAD AGENCY.—The term ‘lead agency’ 7
means the Federal agency to which the President 8
delegates, pursuant to section 802, the authorities 9
provided under this title. 10
‘‘(7) P
ARTY.—The term ‘party’, with respect to 11
an activity, has the meaning given that term in reg-12
ulations prescribed in accordance with section 807. 13
‘‘(8) U
NITED STATES PERSON .—The term 14
‘United States person’ means— 15
‘‘(A) an individual who is a United States 16
citizen or an alien lawfully admitted for perma-17
nent residence to the United States; or 18
‘‘(B) an entity organized under the laws of 19
the United States or of any jurisdiction within 20
the United States, including any foreign branch 21
of such an entity. 22
‘‘SEC. 802. DELEGATION OF AUTHORITIES. 23
‘‘Except as provided by section 808, the President 24
may delegate the authorities provided under this title to 25
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the head of any Federal agency the President determines 1
appropriate in order to carry out the provisions of this 2
title. 3
‘‘SEC. 803. IDENTIFICATION OF CATEGORIES OF TECH-4
NOLOGIES AND PRODUCTS IN COVERED SEC-5
TORS THAT MAY POSE THREATS TO UNITED 6
STATES NATIONAL SECURITY. 7
‘‘(a) I
NGENERAL.—Not later than one year after the 8
date of the enactment of this title, the President shall— 9
‘‘(1) identify categories of technologies and 10
products in covered sectors that may pose an acute 11
threat to the national security of the United States 12
if developed or acquired by a country of concern; 13
and 14
‘‘(2) publish a list of the categories of tech-15
nologies and products identified under paragraph (1) 16
in the Federal Register. 17
‘‘(b) A
NNUALUPDATES.—Not later than one year 18
after the publication of the initial list required by sub-19
section (a)(2), the President shall— 20
‘‘(1) review the categories of technologies and 21
products on that list; and 22
‘‘(2) publish an updated list of the categories of 23
technologies and products in the Federal Register if 24
the list has changed. 25
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‘‘SEC. 804. PROHIBITION ON COVERED ACTIVITIES. 1
‘‘(a) I
NGENERAL.—The President may, on or after 2
the date on which the initial list of categories of tech-3
nologies and products is published in the Federal Register 4
under section 803(a), prescribe, subject to public notice 5
and comment, regulations to prohibit a United States per-6
son from engaging, directly or indirectly, in a covered ac-7
tivity involving a category of technologies and products on 8
the list. 9
‘‘(b) E
LEMENTS.—Regulations prescribed under sub-10
section (a) may— 11
‘‘(1) require that a United States person take 12
all reasonable steps to prohibit and prevent any 13
transaction by a foreign entity under the control of 14
the United States person that would be a prohibited 15
transaction if engaged in by a United States person; 16
and 17
‘‘(2) exclude any transaction consisting of the 18
acquisition of an equity or other interest in an entity 19
located outside a country of concern, if the President 20
has determined that the government of the country 21
in which that entity is established or has its prin-22
cipal place of business has in place a program for 23
the restriction of certain activities involving coun-24
tries of concern that is comparable to the provisions 25
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provided for in this title, after consideration of other 1
relevant factors. 2
‘‘SEC. 805. MANDATORY NOTIFICATION OF COVERED AC-3
TIVITIES. 4
‘‘(a) M
ANDATORYNOTIFICATION.— 5
‘‘(1) I
N GENERAL.—Beginning on the date that 6
is 90 days after the date on which the initial list of 7
categories of technologies and products is published 8
in the Federal Register under section 803(a), a 9
United States person engaging in a covered activity 10
described in paragraph (2), or that controls a for-11
eign entity engaging in an activity that would be a 12
covered activity described in paragraph (2) if en-13
gaged in by a United States person, shall submit to 14
the President a complete written notification of the 15
activity not later than 14 days after the completion 16
date of the activity. 17
‘‘(2) C
OVERED ACTIVITIES DESCRIBED .—A cov-18
ered activity described in this paragraph is a covered 19
activity— 20
‘‘(A) involving a category of technologies 21
and products on the list published under section 22
803; and 23
‘‘(B) that is not prohibited pursuant to 24
section 804. 25
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‘‘(3) CIRCULATION OF NOTIFICATION .— 1
‘‘(A) I
N GENERAL.—The President shall, 2
upon receipt of a notification under paragraph 3
(1), promptly inspect the notification for com-4
pleteness. 5
‘‘(B) I
NCOMPLETE NOTIFICATION .—If a 6
notification submitted under paragraph (1) is 7
incomplete, the President shall promptly inform 8
the United States person that submits the noti-9
fication that the notification is not complete 10
and provide an explanation for relevant mate-11
rial with respect to which the notification is not 12
complete. 13
‘‘(4) I
DENTIFICATION OF NON -NOTIFIED ACTIV-14
ITY.—The President shall establish a process to 15
identify a covered activity described in paragraph (2) 16
for which— 17
‘‘(A) a notification is not submitted to the 18
President under paragraph (1); and 19
‘‘(B) information is reasonably available. 20
‘‘(b) C
ONFIDENTIALITY OFINFORMATION.— 21
‘‘(1) I
N GENERAL.—Except as provided in para-22
graph (2), any information or documentary material 23
filed with the President or the President’s designee 24
pursuant to this section shall be exempt from disclo-25
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sure under section 552(b)(3) of title 5, United 1
States Code, and no such information or documen-2
tary material may be made public. 3
‘‘(2) E
XCEPTIONS.—Subject to appropriate con-4
fidentiality and classification requirements, the ex-5
emption from disclosure provided by paragraph (1) 6
shall not prevent the disclosure of the following: 7
‘‘(A) Information relevant to any adminis-8
trative or judicial action or proceeding. 9
‘‘(B) Information to Congress or any of 10
the appropriate committees or subcommittees of 11
Congress. 12
‘‘(C) Information important to national se-13
curity analysis or actions of the President to 14
any domestic governmental entity, or to any 15
foreign governmental entity of an ally or part-16
ner of the United States, under the exclusive di-17
rection and authorization of the President or 18
the President’s designee, only to the extent nec-19
essary for national security purposes, and sub-20
ject to appropriate confidentiality and classifica-21
tion requirements. 22
‘‘(D) Information that the parties have 23
consented to be disclosed to third parties. 24
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‘‘(3) APPLICABILITY TO CONGRESS .—Members 1
of Congress, and staff of either House of Congress 2
or any committee of Congress, are subject to the 3
limitations on disclosure of information and docu-4
mentary material that are applicable under this sub-5
section. 6
‘‘SEC. 806. REPORTING REQUIREMENTS. 7
‘‘(a) I
NGENERAL.—Not later than one year after the 8
date on which the regulations prescribed under section 9
807 take effect, and not less frequently than annually 10
thereafter, the President shall submit to the appropriate 11
congressional committees a report that— 12
‘‘(1) lists all notifications submitted under sec-13
tion 805 during the year preceding submission of the 14
report, disaggregated by— 15
‘‘(A) sector; 16
‘‘(B) covered activity; 17
‘‘(C) covered foreign entity; and 18
‘‘(D) country of concern; 19
‘‘(2) includes an assessment of whether to 20
amend the regulations, including whether to amend 21
the definition of ‘covered sectors’ to enhance na-22
tional security; 23
‘‘(3) provides additional context and informa-24
tion regarding trends in the sectors, the types of 25
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covered activity, and the countries involved in those 1
notifications, including— 2
‘‘(A) the locations of the relevant covered 3
foreign entities; and 4
‘‘(B) the countries in which the United 5
States persons, or foreign entities controlled by 6
a United States person, involved in relevant 7
covered activities are located; 8
‘‘(4) includes an assessment of the effectiveness 9
of measures imposed under this title, including ac-10
tions taken by the President as a result of the in-11
sight gained from the information contained in noti-12
fications submitted under section 805; and 13
‘‘(5) makes recommendations for— 14
‘‘(A) expanding existing Federal programs 15
to support the production or supply of tech-16
nologies and products in covered sectors in the 17
United States, including the potential of exist-18
ing authorities to address any related national 19
security concerns; and 20
‘‘(B) the continuation, expansion, or modi-21
fication of the implementation and administra-22
tion of this title. 23
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‘‘(b) FORM.—Each report required by this section 1
shall be submitted in unclassified form, but may include 2
a classified annex. 3
‘‘(c) P
ROHIBITION ON DISCLOSURE.—Information 4
contained in a report required by this section may be with-5
held from disclosure only to the extent otherwise permitted 6
by statute, except that all information included pursuant 7
to subsection (a)(1) shall be withheld from public disclo-8
sure. 9
‘‘SEC. 807. REQUIREMENT FOR REGULATIONS. 10
‘‘(a) I
NGENERAL.—Not later than 180 days after 11
the date on which the initial list of categories of tech-12
nologies and products is published in the Federal Register 13
pursuant to section 803(a), the President shall prescribe 14
regulations to carry out this title in accordance with sub-15
chapter II of chapter 5 and chapter 7 of title 5 (commonly 16
known as the ‘Administrative Procedure Act’). 17
‘‘(b) E
LEMENTS.—Regulations prescribed to carry 18
out this title shall— 19
‘‘(1) specify the types of activities that will be 20
considered to be covered activities, other than types 21
of activities described in section 801(3); 22
‘‘(2) specify the technologies and products in 23
covered sectors with respect to which covered activi-24
ties are prohibited under section 804 or require a 25
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notification under section 805, other than covered 1
sectors specified in section 801(5); 2
‘‘(3) provide for a process by which parties can 3
ask questions and get timely guidance as to whether 4
a covered activity is prohibited under section 804 or 5
requires a notification under section 805; and 6
‘‘(4) clarify the terms used in this title, to 7
maximize the effectiveness of this title. 8
‘‘(c) P
UBLICNOTICE ANDCOMMENT.—Regulations 9
issued pursuant to subsection (a) shall be subject to public 10
notice and comment. 11
‘‘(d) L
OW-BURDENREGULATIONS.—In prescribing 12
regulations under this section, the President shall, to the 13
extent practicable, structure the regulations— 14
‘‘(1) to minimize the cost and complexity of 15
compliance for affected parties; 16
‘‘(2) to ensure the benefits of the regulations 17
outweigh their costs; 18
‘‘(3) to adopt the least burdensome alternative 19
that achieves regulatory objectives; 20
‘‘(4) to prioritize transparency and stakeholder 21
involvement in the process of prescribing the regula-22
tions; and 23
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‘‘(5) to provide for regular review and stream-1
lining of regulations prescribed pursuant to this title 2
to reduce redundancy and complexity. 3
‘‘SEC. 808. MULTILATERAL ENGAGEMENT AND COORDINA-4
TION. 5
‘‘(a) I
NGENERAL.—The Secretary of State and the 6
head of the lead agency, in coordination with the Secretary 7
of Commerce, the United States Trade Representative, the 8
Director of National Intelligence, and the heads of other 9
relevant Federal agencies, as appropriate, should— 10
‘‘(1) conduct bilateral and multilateral engage-11
ment with the governments of countries that are al-12
lies and partners of the United States to promote 13
and increase coordination of protocols and proce-14
dures to facilitate the effective implementation of, 15
and appropriate compliance with, the prohibitions 16
and notifications pursuant to this title; 17
‘‘(2) upon adoption of protocols and procedures 18
described in paragraph (1), work with those govern-19
ments to establish mechanisms for sharing informa-20
tion, including trends, with respect to such activities; 21
and 22
‘‘(3) work with and encourage the governments 23
of certain countries that are allies and partners of 24
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the United States to develop similar mechanisms of 1
their own. 2
‘‘(b) S
TRATEGY FORMULTILATERALENGAGEMENT 3
ANDCOORDINATION.—Not later than 180 days after the 4
date of the enactment of this title, the Secretary of State 5
and the head of the lead agency, in coordination with the 6
heads of other relevant Federal agencies, should— 7
‘‘(1) develop a strategy to work with the gov-8
ernments of countries that are allies and partners of 9
the United States to develop mechanisms that are 10
comparable to the prohibitions and notifications pur-11
suant to this title; and 12
‘‘(2) assess opportunities to provide technical 13
assistance to those countries with respect to the de-14
velopment of those mechanisms. 15
‘‘(c) R
EPORT.—Not later than one year after the date 16
of the enactment of this title, and annually thereafter for 17
4 years, the Secretary of State shall submit to the appro-18
priate congressional committees a report that includes— 19
‘‘(1) a discussion of any strategy developed pur-20
suant to subsection (b)(1), including key tools and 21
objectives for the development of comparable mecha-22
nisms by the governments of countries that are allies 23
and partners of the United States; 24
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‘‘(2) a list of countries that are allies and part-1
ners of the United States to target for cooperation 2
in developing their own screening programs; 3
‘‘(3) the status of the implementation and out-4
comes of the strategy; and 5
‘‘(4) a description of impediments to the estab-6
lishment of comparable mechanisms by governments 7
of countries that are allies and partners of the 8
United States. 9
‘‘SEC. 809. AUTHORIZATION OF APPROPRIATIONS. 10
‘‘There are authorized to be appropriated, for each 11
of the first 2 fiscal years beginning on or after the date 12
of the enactment of this title, such sums as may be nec-13
essary to carry out this title, including to provide outreach 14
to industry and persons affected by this title. Such 15
amounts shall be derived from amounts otherwise author-16
ized to be appropriated to the President. 17
‘‘SEC. 810. HIRING AUTHORITY. 18
‘‘(a) I
NGENERAL.—The head of lead agency may ap-19
point, without regard to the provisions of sections 3309 20
through 3318 of title 5, United States Code, not more 21
than 25 candidates directly to positions in the competitive 22
service (as defined in section 2102 of that title) in that 23
agency. 24
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‘‘(b) PRIMARYRESPONSIBILITY.—The primary re-1
sponsibility of individuals in positions authorized under 2
subsection (a) shall be to administer this title. 3
‘‘SEC. 811. PENALTIES AND ENFORCEMENT. 4
‘‘(a) U
NLAWFULACTS.—It shall be unlawful for a 5
United States person to violate, attempt to violate, con-6
spire to violate, or cause a violation of any license, order, 7
regulation, or prohibition issued under this title. 8
‘‘(b) C
IVILPENALTIES.— 9
‘‘(1) P
ENALTIES.—A civil penalty may be im-10
posed on any person who commits an unlawful act 11
described in subsection (a) in an amount not to ex-12
ceed the greater of— 13
‘‘(A) $5,000,000; or 14
‘‘(B) an amount that is twice the amount 15
of the covered activity that is the basis of the 16
violation with respect to which the penalty is 17
imposed. 18
‘‘(c) C
RIMINALPENALTIES.—A person who willfully 19
commits, willfully attempts to commit, or willfully con-20
spires to commit, or aids or abets in the commission of, 21
an unlawful act described in subsection (a) shall, upon 22
conviction, be fined not more than $1,000,000, or if an 23
individual, may be imprisoned for not more than 20 years, 24
or both. 25
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‘‘(d) ENFORCEMENT.—The Attorney General may 1
seek appropriate relief, including a temporary or perma-2
nent injunction, restraining order, divestment relief, or 3
other such other order as the Attorney General may deter-4
mine to be proper, in the district courts of the United 5
States in order to implement and enforce this title and 6
any regulation thereunder. 7
‘‘SEC. 812. RULE OF CONSTRUCTION. 8
‘‘Nothing in this title may be construed to— 9
‘‘(1) restrain or deter United States activities 10
abroad if such activities do not pose a risk to the na-11
tional security of the United States; or 12
‘‘(2) alter or negate the authority of the Presi-13
dent under any authority, process, regulation, inves-14
tigation, enforcement measure, or review provided by 15
or established under any other provision of Federal 16
law, or any other authority of the President or Con-17
gress under the Constitution of the United States. 18
‘‘SEC. 813. NATIONAL INTEREST WAIVER. 19
‘‘(a) I
NGENERAL.—Subject to subsection (b), the 20
President is authorized to exempt from any applicable pro-21
hibition or notification requirement under this title any 22
activity determined by the President, in consultation with 23
the heads of relevant Federal agencies, as appropriate, to 24
be in the national interest of the United States. 25
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‘‘(b) CONGRESSIONAL NOTIFICATION.—The Presi-1
dent shall— 2
‘‘(1) notify the appropriate congressional com-3
mittees not later than 48 hours after issuing a waiv-4
er under subsection (a); and 5
‘‘(2) include in such notification an identifica-6
tion of the national interest justifying the use of the 7
waiver.’’. 8
SEC. 5. LIMITATION ON TRADE AUTHORITIES PROCEDURES 9
RELATING TO REQUIREMENTS ON CONTENT 10
OF GOODS FROM NONMARKET ECONOMY 11
COUNTRIES. 12
Section 106(b) of the Bipartisan Congressional Trade 13
Priorities and Accountability Act of 2015 (19 U.S.C. 14
4205(b)) is amended by adding at the end the following: 15
‘‘(7) L
IMITATIONS ON PROCEDURES RELATING 16
TO ORIGINATION OF CONTENT OF GOODS FROM NON -17
MARKET ECONOMY COUNTRIES .— 18
‘‘(A) I
N GENERAL.—The trade authorities 19
procedures shall not apply to an implementing 20
bill submitted with respect to a trade agreement 21
or trade agreements entered into under section 22
103(b) unless the rules of origin requirements 23
under such agreement or agreements— 24
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‘‘(i) with respect to rules of origin 1
based on value content of a good, require 2
that, of the content of a good qualifying 3
for preferential treatment under the agree-4
ment or agreements that does not originate 5
(as specified in those rules) in a country 6
that is party to the agreement or agree-7
ments— 8
‘‘(I) during the 5-year period fol-9
lowing the entry into force of the 10
agreement or agreements, not more 11
than 20 percent of that content may 12
originate in a nonmarket economy 13
country; and 14
‘‘(II) after the period specified in 15
subclause (I), not more than 10 per-16
cent of that content may originate in 17
a nonmarket economy country; and 18
‘‘(ii) with respect to rules of origin 19
that are not based on value content of a 20
good, are consistent with the requirements 21
under clause (i) based on processing re-22
quirements or tariff shifts as opposed to 23
value content. 24
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‘‘(B) NONMARKET ECONOMY COUNTRY DE -1
FINED.—In this paragraph, the term ‘non-2
market economy country’ has the meaning 3
given that term in section 771(18) of the Tariff 4
Act of 1930 (19 U.S.C. 1677(18)).’’. 5
SEC. 6. STRATEGY AND OUTREACH ON RISKS POSED BY 6
PEOPLE’S REPUBLIC OF CHINA SMARTPORT 7
TECHNOLOGY. 8
(a) S
TRATEGY ANDOUTREACHREQUIRED.—The Di-9
rector of the National Counterintelligence and Security 10
Center shall develop a strategy and conduct outreach to 11
United States industry, including shipping companies, 12
port operators, and logistics firms, on the risks of 13
smartport technology of the People’s Republic of China 14
and other related risks posed by entities of the People’s 15
Republic of China, including LOGINK, China Ocean Ship-16
ping Company, Limited (COSCO), China Communications 17
Construction Company, Limited (CCCC), China Media 18
Group (CMG), and Shanghai Zhenhua Heavy Industries 19
Company Limited (ZPMC), to the national security of the 20
United States, the security of United States supply chains, 21
and commercial activity, including with respect to delays, 22
interruption, and lockout of access to systems and tech-23
nologies that enable the free flow of commerce. 24
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(b) CONSISTENCYWITHEXECUTIVEORDERS AND 1
O
THERSTATUTORYAUTHORITIES.—The Director shall 2
carry out subsection (a) in a manner that is consistent 3
with the following: 4
(1) Part 6 of title 33, Code of Federal Regula-5
tions, as amended by Executive Order 14116 (89 6
Fed. Reg. 13971; relating to amending regulations 7
relating to the safeguarding of vessels, harbors, 8
ports, and waterfront facilities of the United States). 9
(2) Executive Order 14017 (86 Fed. Reg. 10
11849; relating to America’s supply chains), or suc-11
cessor order. 12
(3) Section 825 of the National Defense Au-13
thorization Act for Fiscal Year 2024 (Public Law 14
118–31). 15
(c) C
OORDINATION.—The Director shall carry out 16
subsection (a) in coordination with the Commandant of 17
the U.S. Coast Guard, the Director of the Federal Bureau 18
of Investigation, the Commander of the Office of Naval 19
Intelligence, and such other heads of Federal agencies as 20
the Director considers appropriate. 21
Æ
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