118 HR 1368 IH: Deter PRC Support to the Russian War Effort Act
U.S. House of Representatives
2023-03-03
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I
118th CONGRESS
1st Session
H. R. 1368
IN THE HOUSE OF REPRESENTATIVES
March 3, 2023
Mr. Schiff (for himself, Ms. Titus, Mr. Quigley, Mr. Phillips, Ms. Garcia of Texas, Mr. Vicente Gonzalez of Texas, Mr. Crow, Ms. McCollum, Mr. Case, Mr. Swalwell, Ms. Wild, Mr. Krishnamoorthi, Mr. Kildee, and Ms. Tokuda) introduced the following bill; which was referred to the Committee on Foreign Affairs, and in addition to the Committees on the Judiciary, Financial Services, Ways and Means, and Oversight and Accountability, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
A BILL
To impose sanctions with respect to the transfer of arms and related materiel by the People’s Republic of China to the Russian Federation or the evasion or circumvention of United States sanctions or multilateral sanctions by the People’s Republic of China with respect to the Russian Federation, and for other purposes.
1.

Short title
This Act may be cited as the “Deter PRC Support to the Russian War Effort Act”.
2.

Findings
Congress finds the following:
(1)
The People’s Republic of China (in this section referred to as the “PRC”) and the Russian Federation have, in recent years, forged a closer relationship, based largely on their shared interest in challenging the rules-based international order, in an attempt to reshape that order into one that is more welcoming to their authoritarian systems of government.
(2)
The rhetoric of the PRC’s leaders, including Xi Jinping, who called for the unification “by force” of Taiwan with the People’s Republic of China, mirrors the Russian Federation’s justification for invading Ukraine, poses a danger to international peace and security and the agreed to status quo on Taiwan in the Three Communiques exchanged between Beijing and Washington, and should be condemned by the international community.
(3)
On February 24, 2022, Russia launched an unprovoked and unjustified full-scale invasion of Ukraine, and in addition, the United Nation has reported more than 7,800,000 Ukrainian refugees forced to flee across Europe and more than 5,000,000 internally displaced in Ukraine since Russia's invasion began.
(4)
The PRC’s Foreign Ministry spokesperson refused to categorize Russia’s attacks as an “invasion” or “war” and referred repeatedly to the Russian Federation’s statements on Ukraine, including reiterating criticisms of the North Atlantic Treaty Organization (NATO) and blaming the United States for starting the conflict.
(5)
Since Russia’s full-scale invasion of Ukraine, the Biden Administration has imposed several tranches of sanctions on Putin’s Russia.
(6)
On February 22, 2022, President Biden issued Executive Order 14065, which blocks property of certain persons and prohibits certain transactions with respect to continued Russian efforts to undermine the sovereignty and territorial integrity of Ukraine, and expands the scope of the national emergency declared in Executive Order 13660 of March 6, 2014, Executive Order 13661 of March 16, 2014, and Executive Order 13662 of March 20, 2014, and takes additional steps with respect to Executive Order 13685 of December 19, 2014, and Executive Order 13849 of September 20, 2018, finding that the Russian Federation’s purported recognition of the so-called Donetsk People’s Republic (DNR) or Luhansk People’s Republic (LNR) regions of Ukraine contradicts Russia’s commitments under the Minsk agreements and further threatens the peace, stability, sovereignty, and territorial integrity of Ukraine, and thereby constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States.
(7)
On March 8, 2022, President Biden issued Executive Order 14066, which prohibits certain imports and new investments with respect to continued Russian Federation efforts to undermine the sovereignty and territorial integrity of Ukraine, and expands the scope of the national emergency declared in Executive Order 14024 of April 15, 2021, and takes additional steps with respect to Executive Order 14039 of August 20, 2021, finding that the Russian Federation’s unjustified, unprovoked, unyielding, and unconscionable war against Ukraine, including its recent further invasion in violation of international law, including the United Nations Charter, further threatens the peace, stability, sovereignty, and territorial integrity of Ukraine, and thereby constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States.
(8)
On March 11, 2022, President Biden issued Executive Order 14068, which further prohibits certain imports and new investments with respect to continued Russian Federation efforts to undermine the sovereignty and territorial integrity of Ukraine, and takes additional steps with respect to the national emergency declared in Executive Order 14024 of April 15, 2021, and Executive Order 14039 of August 20, 2021, and expanded by Executive Order 14066 of March 8, 2022.
(9)
On April 6, 2022, President Biden issued Executive Order 14071, prohibiting new investment and certain services to the Russian Federation in response to continued Russian Federation aggression, and takes additional steps with respect to the national emergency declared in Executive Order 14024 of April 15, 2021, expanded by Executive Order 14066 of March 8, 2022, and relied on for additional steps taken in Executive Order 14039 of August 20, 2021, and Executive Order 14068 of March 11, 2022.
(10)
In March 2022, as the Biden Administration continued to increase pressure on Putin’s regime through rollouts of the aforementioned sanctions, the head of the PRC’s banking and insurance regulator said the PRC will not participate in the sanctions regime Western nations imposed on Russia and “will continue to maintain normal economic, trade and financial exchanges” with Russia despite its aggression against Ukraine.
(11)
Indeed, that same month, according to PRC customs data, Russia bought 9,950 metric tons of alumina from the PRC, which is nearly 10 times more than what it purchased in the same period a year earlier. The PRC’s first-quarter exports of alumina to Russia are nearly six times the volume of all of 2021, suggesting the PRC may find new ways of providing support to Russia.
(12)
On June 28, 2022, the U.S. Department of Commerce, Bureau of Industry and Security, added five Chinese companies to the Entity List, in response to their continued support to Russia's military efforts since the imposition of export controls in response to Russia's invasion of Ukraine.
(13)
In December 2022, the PRC’s foreign minister stated his country would “deepen strategic mutual trust and mutually beneficial cooperation” with Russia, and trade between the countries has continued to grow.
(14)
As of February 2023, reports based on customs records indicate Chinese state-owned and private companies have exported parts and equipment to sanctioned Russian entities that could be facilitating Putin’s war. This includes shipments of helicopter equipment, jamming technology, drones, and jet-fighter parts to sanctioned Russian government-owned defense firms.
(15)
On February 18, 2023, the Secretary of State publicly stated that Chinese companies were already providing non-lethal support to Russia’s war effort and the PRC was considering providing lethal support, including weapons and ammunition.
3.

Sense of Congress
It is the sense of Congress that—
(1)
Russia’s military invasion of Ukraine and the war crimes and human rights violations committed by the Kremlin, Russia’s military, and Russia’s intelligence and security services against the people of Ukraine should be strongly condemned;
(2)
any country or entity that provides material support for Russia’s invasion is furthering Russia’s unlawful belligerence and committing of war crimes;
(3)
Chinese Government officials and individuals and entities associated with People’s Republic of China that assist the Russian Federation, including Russian Government officials or individuals or entities associated with the Russian Federation, by providing material support or in evading sanctions imposed following the Russian Federation’s invasion of Ukraine are, in so doing, supporting the Russian Federation’s unprovoked attack on Ukraine and the Ukrainian people, including alleged war crimes committed by Russian Armed Forces against civilians;
(4)
the President should continue to seek unity with European and other key partners and to uphold sanctions that continue to impose costs on Putin’s regime and deplete the Russian Federation’s war chest;
(5)
the President should impose sanctions with respect to those sectors and individuals and entities of the Russian Federation, including Russian Government officials, that are evading sanctions imposed by the United States and allied nations following Russia’s invasion of Ukraine; and
(6)
the President should encourage other European countries and key partners to enact legislation that is similar to the provisions of this Act.
4.

Sanctions with respect to the transfer of arms and related materiel by China to Russia
(a)

Imposition of sanctions
(1)

In general
The President is authorized to impose on a PRC person one or more of the sanctions described in subsection (b) if the President determines that such person has, on or after the date of the enactment of this Act, knowingly—
(A)
exported, transferred, or otherwise provided to Russia financial, material, or technological support that contributes materially to the ability of the Government of Russia to undertake military action in Ukraine, such as—
(i)
acquiring chemical, biological, or nuclear weapons or related technologies;
(ii)
acquiring ballistic or cruise missile capabilities;
(iii)
acquiring advanced conventional weapons;
(iv)
acquiring significant defense articles, defense services, or defense information (as such terms are defined under the Arms Export Control Act (22 U.S.C. 2751 et seq.)); or
(v)
acquiring items designated by the President for purposes of the United States Munitions List under section 38(a)(1) of the Arms Export Control Act (22 U.S.C. 2778(a)(1)); or
(B)
facilitated or assisted in the evasion or circumvention of United States sanctions or multilateral sanctions with respect to the Russia.
(2)

Applicability to other PRC persons
The sanctions described in subsection (b) may also be imposed on any PRC person that—
(A)
is a successor entity to a PRC person described in paragraph (1); or
(B)
is owned or controlled by, or has acted for or on behalf of, a PRC person described in paragraph (1) and has engaged in a sanctionable activity described in such paragraph.
(b)

Sanctions described
The sanctions described in this subsection are the following:
(1)

Blocking of property
The President shall exercise all powers granted by the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (except that the requirements of section 202 of such Act (50 U.S.C. 1701) shall not apply) to the extent necessary 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 are or come within the possession or control of a United States person.
(2)

Inadmissibility of certain individuals
(A)

Ineligibility for visas and admission to the United States
An individual determined by the President to be a person described in subsection (a) is—
(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
An individual determined by the President to be a person described in subsection (a) is subject to the following:
(i)
Revocation of any visa or other entry documentation regardless of when the visa or other entry documentation is or was issued.
(ii)
A revocation under clause (i) shall cancel any other valid visa or entry documentation that is in the person’s possession in accordance with section 221(i) of the Immigration and Nationality Act.
(3)

Other sanctions
(A)

Export-import bank assistance for exports
The President may direct the Export-Import Bank of the United States not to give approval to the issuance of any guarantee, insurance, extension of credit, or participation in the extension of credit in connection with the export of any goods or services to the person.
(B)

Loans from united states financial institutions
The President may prohibit any United States financial institution from making loans or providing credits to the person in any 12-month period unless the person is engaged in activities to relieve human suffering and the loans or credits are provided for such activities.
(C)

Loans from international financial institutions
The President should direct the United States Executive Director to each international financial institution to use the voice and vote of the United States to oppose any loan from the international financial institution that would benefit the person.
(D)

Prohibitions on financial institutions
The following prohibitions may be imposed against the person if that person is a financial institution:
(i)

Prohibition on designation as primary dealer
Neither the Board of Governors of the Federal Reserve System nor the Federal Reserve Bank of New York may designate, or permit the continuation of any prior designation of, the financial institution as a primary dealer in United States Government debt instruments.
(ii)

Prohibition on service as a repository of government funds
The financial institution may not serve as agent of the United States Government or serve as repository for United States Government funds.
(E)

Procurement sanction
The United States Government may not procure, or enter into any contract for the procurement of, any goods or services from the person.
(F)

Foreign exchange
The President may, pursuant to such regulations as the President may prescribe, prohibit any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which the person has any interest.
(G)

Banking transactions
The President may, 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.
(H)

Property transactions
The President may, pursuant to such regulations as the President may prescribe, prohibit any other person from—
(i)
acquiring, holding, withholding, using, transferring, withdrawing, transporting, importing, or exporting any property that is subject to the jurisdiction of the United States and with respect to which the person has any interest;
(ii)
dealing in or exercising any right, power, or privilege with respect to such property; or
(iii)
conducting any transaction involving such property.
(I)

Ban on investment in equity or debt of person
The President may, pursuant to such regulations or guidelines as the President may prescribe, prohibit any United States person from investing in or purchasing significant amounts of equity or debt instruments of the person.
(J)

Exclusion of corporate officers
The President may 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.
(K)

Sanctions on principal executive officers
The President may impose on the principal executive officer or officers of the person, or on persons performing similar functions and with similar authorities as such officer or officers, any of the sanctions under this subsection.
(c)

Exceptions
(1)

Exception for intelligence activities
Sanctions under this section shall not apply to any activity subject to the reporting requirements under title V of the National Security Act of 1947 (50 U.S.C. 3091 et seq.) or any authorized intelligence activities of the United States.
(2)

Exception to comply with international obligations and for law enforcement activities
Sanctions under subsection (b)(2) shall not apply with respect to an alien if admitting or paroling the alien into the United States is necessary—
(A)
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, or other applicable international obligations; or
(B)
to carry out or assist law enforcement activity in the United States.
(3)

Exception relating to importation of goods
(A)

In general
The authority to block and prohibit all transactions in all property and interests in property under subsection (b)(1) shall not include the authority to impose sanctions on the importation of goods.
(B)

Good defined
In this paragraph, the term “good” means any article, natural or man-made substance, material, supply or manufactured product, including inspection and test equipment and excluding technical data.
(d)

Waiver
The President may waive the application of sanctions under subsection (b) with respect to a PRC person described in subsection (a) if the President determines that such a waiver is in the national interest of the United States.
(e)

Implementation; penalties
(1)

Implementation
The President may exercise all authorities provided under sections 203 and 205 of the International Emergency Economic Powers Act (50 U.S.C. 1702 and 1704) to carry out the purposes of this section.
(2)

Penalties
The penalties provided for in subsections (b) and (c) of section 206 of the International Emergency Economic Powers Act (50 U.S.C. 1705) may apply to a person that violates, attempts to violate, or conspires to violate, or causes a violation of, subsection (a) of this section, or an order or regulation prescribed under either such subsection, to the same extent that such penalties apply to a person that commits an unlawful act described in section 206(a) of the International Emergency Economic Powers Act.
(f)

Definitions
In this section:
(1)

China
The term “China” means the People’s Republic of China.
(2)

Financial, material, or technological support
The term “financial, material, or technological support” has the meaning given such term in section 542.304 of title 31, Code of Federal Regulations (or any corresponding similar regulation or ruling).
(3)

PRC person
The term “PRC person”—
(A)
means—
(i)
any citizen or national of China; or
(ii)
any entity organized under the laws of China or any jurisdiction within China; and
(B)
includes the Government of China, the Chinese Communist Party, and any Chinese State-owned enterprise.
(4)

International financial institution
The term “international financial institution” has the meaning given that term in section 1701(c) of the International Financial Institutions Act (22 U.S.C. 262r(c)).
(5)

Russia
The term “Russia” means the Russian Federation.
(6)

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; or
(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.
5.

Sunset
The provisions of this Act shall take effect on the date of the enactment of this Act, and such provisions, including any sanctions or penalties imposed under this Act, shall terminate on the earlier of—
(1)
the date on which the President determines the conflict in Ukraine has ended; or
(2)
the date that is 2 years after such date of enactment.