[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 3735 Introduced in Senate (IS)]
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117th CONGRESS
2d Session
S. 3735
To impose sanctions to deter aggression by the People's Republic of
China against Taiwan, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 2, 2022
Mr. Scott of Florida (for himself, Mr. Cramer, and Mr. Kennedy)
introduced the following bill; which was read twice and referred to the
Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To impose sanctions to deter aggression by the People's Republic of
China against Taiwan, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Deterring Communist Chinese
Aggression against Taiwan through Financial Sanctions Act of 2022''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Taiwan is a self-governing polity with all the
attributes of a constitutional democratic republic and
consistently achieves exceedingly high scores from Freedom
House's Freedom in the World Index.
(2) Taiwan practices and enshrines in law a free market and
entrepreneurial economy and consistently achieves exceedingly
high scores in the Heritage Foundation's Index of Economic
Freedom.
(3) Taiwan's government and political culture cherish
individual rights and the protection of ethnic minorities, and
do so through respect for the rule of law.
(4) Taiwan's democracy, free market economy, and cultural,
industrial, and scientific achievements have made it a model
for the world as it contributes greatly to the peace,
prosperity, and well-being of the United States and all other
countries that trade and cooperate with Taiwan despite the
constraints on trade and cooperation resulting from the threats
and intimidation by the Communist Party of China against
countries that seek relations with Taiwan.
(5) Section 2(b) of the Taiwan Relations Act (22 U.S.C.
3301(b)) asserts that it is the policy of the United States--
(A) ``to declare that peace and stability in the
area are in the political, security, and economic
interests of the United States, and are matters of
international concern'';
(B) ``to make clear that the United States decision
to establish diplomatic relations with the People's
Republic of China rests upon the expectation that the
future of Taiwan will be determined by peaceful
means'';
(C) ``to consider any effort to determine the
future of Taiwan by other than peaceful means,
including by boycotts or embargoes, a threat to the
peace and security of the Western Pacific area and of
grave concern to the United States''; and
(D) ``to maintain the capacity of the United States
to resist any resort to force or other forms of
coercion that would jeopardize the security, or the
social or economic system, of the people on Taiwan''.
(6) The Chinese Communist Party, especially under the
leadership of General Secretary Xi Jinping, threatens Taiwan in
terms of national security, trade, and its relationships with
countries and international organizations.
(7) Such threats are designed to intimidate Taiwan into
submission to Communist Party rule and to cause other countries
and international organizations to shun Taiwan and cut off
relations with it.
(8) General Secretary Xi and the Communist Party have made
clear their intention to take Taiwan by force if they so
choose, and they demonstrate that intention with increased
provocative and dangerous actions threatening the peace against
Taiwan in the Taiwan Straits.
(9) Supporting Taiwan's defense against such increasingly
imminent threats is a vital interest of the United States for
the sake of the national security of the United States and
allies of the United States in the region, and the preservation
of democracy, free market economics, and the rules and norms of
the international order.
(10) The peace and stability of the entire Pacific region
and the countries in that region require that Taiwan not be
subjected to the rule of the Communist Party of China.
(11) The credibility of the avowal of the United States to
defend the principles of the United States and the principles
the international order is built upon require a policy that can
and will deter and thwart any attempt by the Communist Party of
China to dominate Taiwan by coercion.
SEC. 3. STATEMENT OF POLICY.
It is the policy of the United States to sever all financial
transactions between the United States and the People's Republic of
China, including any and all public or private entities in the People's
Republic of China, if the Government of the People's Republic of China
or any forces subject to the control of that Government--
(1) engage in armed aggression against Taiwan;
(2) invade the territory of Taiwan, including the mainland
of Taiwan and any territories under its control, without regard
to whether those territories are inhabited or not;
(3) blockade by sea or air the mainland of Taiwan or
territories under its control; or
(4) attempt to change the status of Taiwan or its
government by force or coercive actions.
SEC. 4. DEFINITIONS.
In this Act:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Banking, Housing, and Urban
Affairs and the Committee on Finance of the Senate; and
(B) the Committee on Financial Services and the
Committee on Ways and Means of the House of
Representatives.
(2) Chinese military company.--The term ``Chinese military
company'' means an entity on the most recent list required to
be submitted under section 1260H of the William M. (Mac)
Thornberry National Defense Authorization Act for Fiscal Year
2021 (Public Law 116-283).
(3) Chinese person.--The term ``Chinese person'' means--
(A) an individual who is a citizen or national of
the People's Republic of China; or
(B) an entity organized under the laws of the
People's Republic of China or otherwise subject to the
jurisdiction of the Government of the People's Republic
of China.
(4) Financial institution.--The term ``financial
institution'' means a financial institution specified in
subparagraph (A), (B), (C), (D), (E), (F), (G), (H), (I), (J),
(K), (M), (N), (P), (R), (T), (Y), or (Z) of section 5312(a)(2)
of title 31, United States Code.
(5) Foreign financial institution.--The term ``foreign
financial institution'' has the meaning given that term in
section 1010.605 of title 31, Code of Federal Regulations (or
any corresponding similar regulation or ruling).
(6) Issuer; security.--The terms ``issuer'' and
``security'' have the meanings given those terms in section
3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c).
(7) National securities exchange.--The term ``national
securities exchange'' means an exchange registered as a
national securities exchange in accordance with section 6 of
the Securities Exchange Act of 1934 (15 U.S.C. 78f).
(8) Triggering event.--The term ``triggering event'' means
any attempt by the Government of the People's Republic of China
or any forces subject to the control of that Government to
subject Taiwan to the control of the People's Republic of
China, including though any of the following acts:
(A) Engaging in armed aggression against Taiwan.
(B) Invading the territory of Taiwan, including the
mainland of Taiwan and any territories under its
control, without regard to whether those territories
are inhabited or not.
(C) Blockading by sea or air the mainland of Taiwan
or territories under its control.
(D) Attempt to change the status of Taiwan or its
government by force or coercive actions.
(9) United states person.--The term ``United States
person'' means--
(A) a United States citizen or an alien lawfully
admitted for permanent residence to the United States;
(B) an entity organized under the laws of the
United States or of any jurisdiction within the United
States, including a foreign branch of such an entity;
or
(C) any person in the United States.
SEC. 5. IMPOSITION OF SANCTIONS WITH RESPECT TO CHINESE PERSONS
RESPONSIBLE FOR AGGRESSION AGAINST TAIWAN.
(a) Initial Imposition of Sanctions.--On and after the date that is
30 days after a triggering event, the President shall impose the
sanctions described in subsection (b) with respect to any Chinese
person, including any senior official of the Government of the People's
Republic of China, that the President determines participates in a
triggering event.
(b) Sanctions Described.--The sanctions to be imposed with respect
to a person described in subsection (a) are the following:
(1) Blocking of property.--
(A) In general.--The President shall exercise all
of the powers granted by the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.) to block
and prohibit all transactions in all property and
interests in property of the person if such property
and interests in property are in the United States,
come within the United States, or come within the
possession or control of a United States person.
(B) Inapplicability of national emergency
requirement.--The requirements of section 202 of the
International Emergency Economic Powers Act (50 U.S.C.
1701) shall not apply for purposes of subparagraph (A).
(2) Ineligibility for visas, admission, or parole.--
(A) Visas, admission, or parole.--In the case of an
alien, the alien shall be--
(i) inadmissible to the United States;
(ii) ineligible to receive a visa or other
documentation to enter the United States; and
(iii) otherwise ineligible to be admitted
or paroled into the United States or to receive
any other benefit under the Immigration and
Nationality Act (8 U.S.C. 1101 et seq.).
(B) Current visas revoked.--
(i) In general.--An alien described in
subparagraph (A) shall be subject to revocation
of any visa or other entry documentation
regardless of when the visa or other entry
documentation is or was issued.
(ii) Immediate effect.--A revocation under
clause (i) shall--
(I) take effect immediately; and
(II) cancel any other valid visa or
entry documentation that is in the
alien's possession.
(3) Exclusion of corporate officers.--The President shall
direct the Secretary of State to deny a visa to, and the
Secretary of Homeland Security to exclude from the United
States, any alien that the President determines is a corporate
officer or principal of, or a shareholder with a controlling
interest in, the person.
(4) Export sanction.--The President may order the United
States Government not to issue any specific license and not to
grant any other specific permission or authority to export any
goods or technology to the person under--
(A) the Export Control Reform Act of 2018 (50
U.S.C. 4801 et seq.); or
(B) any other statute that requires the prior
review and approval of the United States Government as
a condition for the export or reexport of goods or
services.
(5) Inclusion on entity list.--The President shall include
the entity on the entity list maintained by the Bureau of
Industry and Security of the Department of Commerce and set
forth in Supplement No. 4 to part 744 of the Export
Administration Regulations, for activities contrary to the
national security or foreign policy interests of the United
States.
(6) Ban on investment in equity or debt of sanctioned
person.--The President shall, pursuant to such regulations or
guidelines as the President may prescribe, prohibit any United
States person from investing in or purchasing equity or debt
instruments of the person.
(7) Banking transactions.--The President shall, pursuant to
such regulations as the President may prescribe, prohibit any
transfers of credit or payments between financial institutions
or by, through, or to any financial institution, to the extent
that such transfers or payments are subject to the jurisdiction
of the United States and involve any interest of the person.
(8) Correspondent and payable-through accounts.--In the
case of a foreign financial institution, the President may
prohibit the opening, and prohibit or impose strict conditions
on the maintaining, in the United States of a correspondent
account or a payable-through account by the foreign financial
institution.
(c) Exceptions.--
(1) Exception for intelligence, law enforcement, and
national security activities.--Sanctions under this section
shall not apply to any authorized intelligence, law
enforcement, or national security activities of the United
States.
(2) Compliance with united nations headquarters
agreement.--Paragraphs (2) and (3) of subsection (b) shall not
apply with respect to the admission of an alien to the United
States if such admission is necessary to permit the United
States to comply with the Agreement regarding the Headquarters
of the United Nations, signed at Lake Success, June 26, 1947,
and entered into force, November 21, 1947, between the United
Nations and the United States.
(d) Definitions.--In this section:
(1) Account; correspondent account; payable-through
account.--The terms ``account'', ``correspondent account'', and
``payable-through account'' have the meanings given those terms
in section 5318A of title 31, United States Code.
(2) Admission; admitted; alien.--The terms ``admission'',
``admitted'', and ``alien'' have the meanings given those terms
in section 101 of the Immigration and Nationality Act (8 U.S.C.
1101).
SEC. 6. PROHIBITION ON LISTING OF CHINESE ENTITIES ON UNITED STATES
SECURITIES EXCHANGES.
(a) In General.--The Securities and Exchange Commission shall
prohibit the securities of an issuer described in subsection (b) from
being traded on a national securities exchange on or after the date
that is 60 days after a triggering event.
(b) Issuers Described.--An issuer described in this subsection is
an issuer that is--
(1) a Chinese person;
(2) owned or controlled by a Chinese person; or
(3) a successor entity to a person described in paragraph
(1) or (2).
SEC. 7. PROHIBITION ON TRANSACTIONS IN SECURITIES OF CHINESE MILITARY
COMPANIES.
(a) In General.--Beginning on the date that is 60 days after a
triggering event, any transaction by any United States person or within
the United States in any security of an issuer described in subsection
(b), or any instrument that is derivative of or designed to provide
investment exposure to any such security, is prohibited.
(b) Issuers Described.--An issuer described in this subsection (b)
is an issuer that is--
(1) a Chinese military company;
(2) owned or controlled by a Chinese military company; or
(3) a successor entity to a Chinese military company.
SEC. 8. PROHIBITION ON TRANSACTIONS WITH CERTAIN CHINESE SOFTWARE
COMPANIES.
(a) In General.--Beginning on the date that is 30 days after a
triggering event, any transaction by a United States person or within
the United States with any person described in subsection (b) is
prohibited.
(b) Persons Described.--A person described in this subsection is a
person that--
(1) the Secretary of Commerce determines develops or
controls a software application described in subsection (c); or
(2) is owned or controlled by a person described in
paragraph (1).
(c) Software Applications Specified.--A software application
described in this subsection is any of the following:
(1) Alipay.
(2) CamScanner.
(3) QQ Wallet.
(4) SHAREit.
(5) Tencent QQ.
(6) VMate.
(7) WeChat Pay.
(8) WPS Office.
(9) Any other connected software application--
(A) providing digital e-wallet platforms or digital
financial messaging systems;
(B) developed or operated by a Chinese person; and
(C) determined by the Secretary of Commerce to pose
an unacceptable risk to the national security, foreign
policy, or economy of the United States.
(d) Connected Software Application Defined.--In this section, the
term ``connected software application'' means software, a software
program, or group of software programs, designed--
(1) to be used by an end user on an end-point computing
device and to collect, process, or transmit data via the
internet as an integral part of its functionality; or
(2) to facilitate international financial transactions,
digital e-wallet services, digital currency transactions,
mobile payments, or international financial messaging services.
SEC. 9. IMPOSITION OF SANCTIONS WITH RESPECT TO INTERNATIONAL FINANCIAL
MESSAGING SYSTEMS.
If, on or after the date that is 60 days after the triggering
action, a global financial communications services provider has not
terminated the provision of financial communications services to, and
the enabling and facilitation of access to such services for, the
Central Bank of China and any foreign financial institution subject to
sanctions under this Act, the President shall impose sanctions pursuant
to the International Emergency Economic Powers Act (50 U.S.C. 1701 et
seq.) with respect to the financial communications services provider
and the directors of, and shareholders with a significant interest in,
the provider.
SEC. 10. PROHIBITION ON TRANSACTIONS RELATING TO DIGITAL CURRENCY
ISSUED BY THE PEOPLE'S REPUBLIC OF CHINA.
Any transaction by a United States person or within the United
States related to, providing financing for, and otherwise dealing in,
any digital currency, digital coin, or digital token, that was issued
by, for, or on behalf of the Government of the People's Republic of
China on or after the date that is 30 days after a triggering event, is
prohibited.
SEC. 11. IMPLEMENTATION; PENALTIES.
(a) Implementation.--The President shall exercise all authorities
provided to the President under sections 203 and 205 of the
International Emergency Economic Powers Act (50 U.S.C. 1702 and 1704)
to carry out this Act.
(b) Penalties.--A person that violates, attempts to violate,
conspires to violate, or causes a violation of this Act or any
regulation, license, or order issued to carry out this Act shall be
subject to the penalties set forth in subsections (b) and (c) of
section 206 of the International Emergency Economic Powers Act (50
U.S.C. 1705) to the same extent as a person that commits an unlawful
act described in subsection (a) of that section.
SEC. 12. EXCEPTION RELATING TO IMPORTATION OF GOODS.
(a) In General.--The authority or a requirement to impose sanctions
or a prohibition under this Act shall not include the authority or a
requirement to impose sanctions or a prohibition on the importation of
goods.
(b) Good Defined.--In this section, the term ``good'' means any
article, natural or manmade substance, material, supply, or
manufactured product, including inspection and test equipment, and
excluding technical data.
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