[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6307 Introduced in House (IH)]
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118th CONGRESS
1st Session
H. R. 6307
To prohibit certain actions and require reporting to defend against the
economic and national security risks posed by foreign adversarial
blockchain networks, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 8, 2023
Mr. Nunn of Iowa (for himself and Ms. Spanberger) introduced the
following bill; which was referred to the Committee on Foreign Affairs,
and in addition to the Committees on Financial Services, Intelligence
(Permanent Select), 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 prohibit certain actions and require reporting to defend against the
economic and national security risks posed by foreign adversarial
blockchain networks, 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 ``Creating Legal Accountability for
Rogue Innovators and Technology Act of 2023'' or the ``CLARITY Act of
2023''.
SEC. 2. FINDINGS; SENSE OF CONGRESS.
(a) Findings.--Congress finds the following:
(1) Blockchain service activities by governments and
organizations that are adversaries of the United States can
create risks to the economic, national security and foreign
policy interests of the United States.
(2) The Blockchain-based Services Network of the People's
Republic of China, and unregulated, self-proclaimed ``supra-
national'' companies pose risks to the national security and
foreign policy interests of the United States.
(b) Sense of Congress.--It is the sense of Congress that the
development of a Federal Government strategy to protect the United
States from risks created from the Blockchain-based Services Network of
the People's Republic of China and other foreign adversarial blockchain
network infrastructure is essential to the national security and
economic security of the United States.
SEC. 3. PROHIBITIONS RELATING TO COVERED DISTRIBUTED LEDGER TECHNOLOGY
AND BLOCKCHAIN EQUIPMENT OR SERVICES.
(a) Prohibition on Acquisition.--No head of an executive agency may
acquire, or enter into, extend, or renew a contract or other agreement
for, any equipment, system, or service that uses covered distributed
ledger technology and blockchain equipment or services as a substantial
or essential component of, or critical technology as part of, such
equipment, system, or service.
(b) Prohibition on Loan and Grant Funds.--
(1) Prohibition.--No head of an executive agency may
obligate or expend loan or grant funds to acquire, or enter
into, extend, or renew a contract or other agreement for, an
equipment, system, or service described in subsection (a).
(2) Prioritization.--In implementing the prohibition under
paragraph (1), the heads of executive agencies administering
loan, grant, or subsidy programs, including the Secretary of
Homeland Security and the Secretary of Commerce, shall
prioritize available funding and technical support to assist
affected businesses, institutions, and organizations as is
reasonably necessary for those affected entities to transition
from covered distributed ledger technology and blockchain
equipment or services, to acquire replacement equipment and
services, and to ensure that communications service to users
and customers is sustained.
(c) Rule of Construction.--Nothing in subsection (a) or (b) shall
be construed to--
(1) prohibit the head of an executive agency from acquiring
from an entity, or entering into, extending, or renewing a
contract or other agreement with an entity for, a service that
connects to the facilities of a third party, such as blockchain
protocols, or interconnection arrangements; or
(2) cover wireless telecommunications equipment or third-
party validators that cannot route or redirect user data
traffic or permit visibility into any user data or packets that
such equipment transmits or otherwise handles.
(d) Effective Date.--The prohibitions under subsections (a) and (b)
shall take effect on the date that is 2 years after the date of the
enactment of this Act.
(e) Waiver Authority.--
(1) Executive agencies.--Except as provided in paragraph
(2), beginning on the effective date under subsection (d), the
head of an executive agency may, for a period of not more than
2 years per waiver, issue a waiver of the requirements under
subsection (a) with respect to an entity that requests such a
waiver. The waiver may be provided only if the entity seeking
the waiver--
(A) provides a compelling justification for the
additional time to implement the requirements under
such subsection, as determined by the head of the
executive agency; and
(B) submits to the head of the executive agency,
who shall not later than 30 days thereafter submit to
the appropriate congressional committees, a full and
complete laydown of the presences of covered
distributed ledger technology and blockchain equipment
or services in the entity's supply chain and a phase-
out plan to eliminate such covered distributed ledger
technology and blockchain equipment or services.
(2) Elements of the intelligence community.--Beginning on
the effective date under subsection (d), each head of an
element of the intelligence community may waive the
requirements under subsection (a) if such head determines the
waiver is in the national security interests of the United
States.
SEC. 4. REPORTS TO DEFEND AGAINST RISKS POSED BY COVERED DISTRIBUTED
LEDGER TECHNOLOGY AND BLOCKCHAIN EQUIPMENT OR SERVICES.
(a) In General.--Not later than 180 days after the date of the
enactment of this Act, and annually thereafter, the Secretary of the
Treasury, the Secretary of State, and the Director of National
Intelligence shall jointly, and in consultation with the officials
specified in subsection (b), submit to Congress a report that includes
the following:
(1) A description of interagency policies and procedures to
defend the United States financial markets, United States
sanctions, United States business interests in the People's
Republic of China, and global supply chains from the economic
and national security risks posed by covered distributed ledger
technology and blockchain equipment or services.
(2) A description of commercial and public administration
activities used by the Government of the People's Republic of
China and the Chinese Communist Party involving the entities
listed under subparagraphs (A) through (E) of section 7(2),
including militarization, industrialization, international
trade, and other commercial activity.
(3) An assessment of the foreign policy and national
security risks to the United States relating to transactions
using covered distributed ledger technology and blockchain
equipment or services, including circumvention of United States
and international sanctions, including through the Society for
Worldwide Interbank Financial Telecommunication (commonly known
as ``SWIFT'') payments system.
(4) An assessment of data collection, cybersecurity risks,
and the use of data that involves United States persons by the
Government of the People's Republic of China and the Chinese
Communist Party involving transactions relating to covered
distributed ledger technology and blockchain equipment or
services of the People's Republic of China.
(5) An assessment of the use of covered distributed ledger
technology and blockchain equipment or services to collect data
as part of the social credit system of the People's Republic of
China.
(6) An assessment of the impact and national security risks
of covered distributed ledger technology and blockchain
equipment or services on data collection, cross-border
payments, and economic integration, including with respect to
countries participating in the Belt and Road Initiative of the
People's Republic of China.
(7) An assessment of the impact of covered distributed
ledger technology and blockchain equipment or services on the
United States blockchain technology and distributed ledger
technology industries, to include an assessment of its
commercial adoption globally and its integration with other
smart city technologies in the United States and
internationally.
(8) An assessment of the technologies, system
architectures, and protocols underpinning covered distributed
ledger technology and blockchain equipment or services, and
recommendations with respect to strengthening export controls
for United States technologies relating to the development and
implementation of covered distributed ledger technology and
blockchain equipment or services.
(9) An assessment of the impact of covered distributed
ledger technology and blockchain equipment or services on
international illicit finance.
(10) An assessment of the impact of covered distributed
ledger technology and blockchain equipment or services on
global trade, investment, and other activities and how
increased use of covered distributed ledger technology and
blockchain equipment or services may affect the status and
future of the United States dollar as the world reserve
currency.
(11) An assessment of how covered distributed ledger
technology and blockchain equipment or services fit into the
national security and economic objectives of the People's
Republic of China and the Chinese Communist Party, along with
other foreign adversaries.
(12) An assessment of coordination between the United
States and allies of the United States with respect to the
national security risks and best practices relating to covered
distributed ledger technology and blockchain equipment or
services.
(13) Any other recommendations of the Secretary of
Treasury, the Secretary of State, or the Director of National
Intelligence regarding the foreign policy and national security
implications of covered distributed ledger technology and
blockchain equipment or services.
(b) Officials Specified.--The officials specified in this
subsection include the following:
(1) The Secretary of Defense.
(2) The Secretary of Commerce.
(3) The United States Trade Representative.
(4) The Attorney General.
(5) The Chairman of the Board of Governors of the Federal
Reserve System.
(6) The Director of the National Institute of Standards and
Technology and the Under Secretary of Commerce for Standards
and Technology.
(7) The Under Secretary of Commerce for Industry and
Security of the United States.
(c) Form.--Each report required by subsection (a) may be submitted
in classified form, but if so submitted shall include an unclassified
executive summary.
SEC. 5. RECOMMENDATIONS FOR CONGRESS.
Not later than 90 days after each date on which a report is
submitted under section 4, the Secretary of the Treasury, the Secretary
of State, and the Director of National Intelligence shall jointly
submit to Congress a set of recommendations that contain--
(1) a list of existing enforcement actions that may be used
to defend the United States from risks identified in the
report; and
(2) an action-item plan on steps Congress may take to
address such risks.
SEC. 6. REPORT ON MALIGN ENTITIES IN BLOCKCHAIN AND DISTRIBUTED LEDGER
TECHNOLOGY INDUSTRY.
(a) Report.--Not later than 180 days after the date of the
enactment of this Act, and annually thereafter, the Secretary of the
Treasury, the Secretary of State, and the Director of National
Intelligence shall jointly, and in consultation with the officials
specified in section 5(b), submit to Congress a report that includes
the following:
(1) A list of countries, proxies, firms, and technologies
that are malign in the blockchain and distributed ledger
technology industry.
(2) A description of what harms such countries, proxies,
firms, and technologies cause to United States interests and
sanctions enforcement, the use of the United States dollar, and
international anti-money laundering and countering the
financing of terrorism standards.
(3) A description of what mitigating strategies the United
States may use to counter such harms.
(4) Recommendations on how to add to or modify the list of
covered distributed ledger technology and blockchain equipment
or services in order to capture new networks that emerge from
foreign adversaries.
(b) Form.--The report required by subsection (a) may be submitted
in classified form, but if so submitted shall include an unclassified
executive summary.
SEC. 7. DEFINITIONS.
In this Act:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees''' means--
(A) the Committee on Banking, Housing, and Urban
Affairs, the Committee on Foreign Relations, and the
Committee on Homeland Security and Governmental Affairs
of the Senate; and
(B) the Committee on Financial Services, the
Committee on Foreign Affairs, the Committee on
Intelligence, and the Committee on Oversight and
Government Reform of the House of Representatives.
(2) Covered distributed ledger technology and blockchain
equipment or services.--The term ``covered distributed ledger
technology and blockchain equipment or services'' means
distributed ledger technology and blockchain equipment or
services of or originating from a foreign adversary, including
any of the following parent companies or subsidiaries thereof:
(A) The Blockchain-based Services Network.
(B) The Spartan Network.
(C) The Conflux Network.
(D) iFinex, Inc.
(E) Red Date Technology Co., Ltd.
(3) Executive agency.--The term ``executive agency'' has
the meaning given the term in section 133 of title 41, United
States Code.
(4) Foreign adversary.--The term ``foreign adversary'' has
the meaning given such term in section 7.2 of title 15, Code of
Federal Regulations.
(5) Intelligence community.--The term ``intelligence
community'' has the meaning given the term in section 3 of the
National Security Act of 1947 (50 U.S.C. 3003).
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