[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5016 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
2d Session
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
September 10, 2024
Mr. Casey introduced 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 Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Combat Chinese Economic Aggression
Act of 2024''.
SEC. 2. REVIEW BY COMMITTEE ON FOREIGN INVESTMENT IN THE UNITED STATES
OF INVESTMENTS IMPACTING ECONOMIC OR TECHNOLOGICAL
COMPETITIVENESS.
(a) In General.--Subsection (a)(4) of section 721 of the Defense
Production Act of 1950 (50 U.S.C. 4565) is amended--
(1) in subparagraph (A)--
(A) in clause (i), by striking ``; and'' and
inserting a semicolon;
(B) in clause (ii)--
(i) by striking ``clauses (ii) through
(v)'' and inserting ``any of clauses (ii)
through (iv) or clause (vii)''; and
(ii) by striking the period at the end and
inserting ``; and'';
(C) by adding at the end the following:
``(iii) any transaction described in clause
(v) or (vi) of subparagraph (B) proposed or
pending after the date of the enactment of this
clause.''; and
(2) in subparagraph (B)--
(A) by redesignating clause (v) as clause (vii);
and
(B) by inserting after clause (iv) the following:
``(v) Any other investment, subject to
regulations prescribed under subparagraph (D),
by a foreign person in a United States business
that could support the acquisition by a foreign
country of capabilities to attain technological
self-sufficiency or impair the economic and
technological competitiveness of the United
States, including--
``(I) an investment in a United
States business that has received
direct funding from, or has been
awarded a contract by, the Department
of Defense, the Department of Commerce,
the Department of Energy, or another
Federal agency; or
``(II) any other investment the
Committee determines, by regulation,
may provide to the foreign person
access to expertise, business networks,
or production methods critical to
maintaining the economic and
technological competitiveness of the
United States.
``(vi) Any other investment, subject to
regulations prescribed under subparagraph (D)--
``(I) in a United States business
that produces, designs, tests,
manufactures, fabricates, or develops
one or more critical technologies; and
``(II) by a foreign entity of
concern (as defined in section 9901 of
the William M. (Mac) Thornberry
National Defense Authorization Act for
Fiscal Year 2021 (15 U.S.C. 4651)) that
is organized under the laws of or
otherwise subject to the jurisdiction
of the People's Republic of China.''.
(b) Mandatory Declarations.--Section 721(b)(1)(C)(v)(IV) of the
Defense Production Act of 1950 (50 U.S.C. 4565(b)(1)(C)(v)(IV)) is
amended by adding at the end the following:
``(hh) Required
declarations for certain
transactions.--The parties to a
covered transaction shall
submit a declaration described
in subclause (I) with respect
to the transaction if--
``(AA) a foreign
person that is a party
to the transaction is a
national of the
People's Republic of
China or an entity
organized under the
laws of or otherwise
subject to the
jurisdiction of the
People's Republic of
China; or
``(BB) the
transaction is in the
metallurgy,
telecommunications,
energy, industrial gas,
chemicals, or
petrochemicals sector
or any other sector the
Secretary determines
appropriate for
purposes of this
item.''.
(c) Analysis by International Trade Administration.--Section
721(b)(1) of the Defense Production Act of 1950 (50 U.S.C. 4565(b)(1))
is amended by adding at the end the following:
``(I) Analysis by international trade
administration with respect to certain transactions.--
``(i) In general.--In the case of a review
of a covered transaction described in clause
(ii), the Secretary of Commerce, in
consultation with other members of the
Committee as appropriate, shall conduct an
analysis of--
``(I) the sector or industry in
which the United States business
involved in the transaction operates;
``(II) the cumulative control of,
or pattern of recent transactions by,
foreign persons, including, directly or
indirectly, foreign governments, in
that sector or industry; and
``(III) the effect of foreign
investment in that sector or industry
on the national security of the United
States.
``(ii) Transactions described.--A covered
transaction described in this clause is a
covered transaction--
``(I) described in clause (vi) or
(vii) of subsection (a)(4)(B); and
``(II) to which a foreign person
that is a national of the People's
Republic of China or an entity
organized under the laws of or
otherwise subject to the jurisdiction
of the People's Republic of China is a
party.''.
(d) Authorization of Appropriations.--There are authorized to be
appropriated for the Committee on Foreign Investment in the United
States such sums as may be necessary to carry out the amendments made
by this section.
SEC. 3. ENHANCED SECURITIES DISCLOSURE REQUIREMENTS.
(a) Definitions.--In this section:
(1) Commission.--The term ``Commission'' means the
Securities and Exchange Commission.
(2) Country of concern.--The term ``country of concern''--
(A) has the meaning given the term ``covered
nation'' in section 4872(d) of title 10, United States
Code; and
(B) includes a jurisdiction that the Commission, in
consultation with the Secretary of State and the
Secretary of the Treasury, determines to be subject to
the political and legal control of a covered nation, as
defined in section 4872(d) of title 10, United States
Code.
(3) Covered entity.--The term ``covered entity'' means an
entity or person that is required to file Form PF.
(4) Exempt reporting adviser.--The term ``exempt reporting
adviser'' means an investment adviser described in section
275.204-4(a) of title 17, Code of Federal Regulations, or any
successor regulation.
(5) Form adv.--The term ``Form ADV'' means the form
described in section 279.1 of title 17, Code of Federal
Regulations, or any successor regulation.
(6) Form pf.--The term ``Form PF'' means the form described
in section 279.9 of title 17, Code of Federal Regulations, or
any successor regulation.
(7) Private fund.--The term ``private fund'' has the
meaning given the term in section 202(a) of the Investment
Advisers Act of 1940 (15 U.S.C. 80b-2(a)).
(8) Private fund assets.--The term ``private fund assets''
has the meaning given the term in section 275.204(b)-1 of title
17, Code of Federal Regulations, or any successor regulation.
(b) Enhanced Disclosure Requirements for Advisers of Private
Funds.--
(1) Requirements.--
(A) In general.--Not later than 1 year after the
date of enactment of this Act, the Commission shall
amend Form PF and Form ADV, and the rules of the
Commission governing the submission of Form PF and Form
ADV, to, subject to subparagraph (B), require each
covered entity and each exempt reporting adviser to
annually disclose when submitting Form PF or Form ADV,
respectively, the total private fund assets in
countries of concern attributable to the private funds
advised by the covered entity or exempt reporting
adviser, as applicable, which shall be broken down by
the percentage of those assets in each country of
concern.
(B) Application.--For the purposes of subparagraph
(A), the Commission shall determine whether a private
fund asset is in a country of concern based on--
(i) the amount of capital that is invested
in an entity (including a subsidiary of an
entity)--
(I) that has a physical presence or
employees in that country of concern;
or
(II) the plurality of the sales of
which are from that country of concern;
and
(ii) the proportion of the total assets and
liabilities of an entity described in clause
(i) that are located in that country of
concern.
(2) Reporting by commission.--
(A) Publicly available reports.--
(i) In general.--Not later than 1 year
after the date on which the Commission makes
the amendments required under paragraph (1),
and not less frequently than annually
thereafter, the Commission shall prepare and
make publicly available a report containing a
list of covered entities and exempt reporting
advisers that, for the period covered by the
report, have disclosed more than 0 private fund
assets under Form PF or Form ADV (as amended
pursuant to that subsection) in at least 1
country of concern, which shall be aggregated
by the covered entity or exempt reporting
adviser making that disclosure.
(ii) Additional requirements.--Each report
prepared and made available by the Commission
under clause (i) shall--
(I) be aggregated by covered entity
or exempt reporting adviser; and
(II) include the percentage of
private fund assets disclosed by a
covered entity or exempt reporting
adviser, as applicable.
(B) Rule of construction.--Nothing in this
paragraph may be construed to permit the Commission to
make available any information that appears on Form PF
or Form ADV other than the information that is included
on Form PF or Form ADV as a result of the requirements
under paragraph (1).
(c) Exempted Transactions.--The Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.) is amended by inserting after section 13A (15
U.S.C. 78m-1) the following:
``SEC. 13B. DISCLOSURE REQUIREMENTS RELATING TO CERTAIN EXEMPTED
TRANSACTIONS.
``(a) Definitions.--In this section:
``(1) Beneficial owner.--The term `beneficial owner' means
a person that is determined to be a beneficial owner under
section 240.13d-3 of title 17, Code of Federal Regulations, or
any successor regulation.
``(2) Country of concern.--The term `country of concern'--
``(A) has the meaning given the term `covered
nation' in section 4872(d) of title 10, United States
Code; and
``(B) includes a jurisdiction that the Commission,
in consultation with the Secretary of State and the
Secretary of the Treasury, determines to be subject to
the political and legal control of a covered nation, as
defined in section 4872(d) of title 10, United States
Code.
``(3) Covered exempted transaction.--The term `covered
exempted transaction' means an offer or sale of a security that
is--
``(A) exempt from registration under section 5 of
the Securities Act of 1933 (15 U.S.C. 77e); and
``(B) structured or intended to comply with--
``(i) section 230.506(b) of title 17, Code
of Federal regulations, or any successor
regulation;
``(ii) sections 230.901, 230.902, and
230.903 of title 17, Code of Federal
Regulations, or any successor regulations; or
``(iii) section 230.144A of title 17, Code
of Federal Regulations, or any successor
regulation.
``(b) Requirement.--
``(1) In general.--Notwithstanding any other provision of
law, in the case of an issuer that conducts a covered exempted
transaction described in paragraph (2), that issuer shall
provide to the Commission, at such time and in such manner as
the Commission may prescribe, the following information:
``(A) The identity of the issuer.
``(B) The place of incorporation of the issuer.
``(C) Whether the issuer is associated with at
least 1 consolidated entity, the plurality of the
assets of which are in a country of concern.
``(D) Whether the issuer is associated with at
least 1 consolidated entity that is incorporated in a
country of concern.
``(E) The amount of securities sold pursuant to the
covered exempted transaction and the net proceeds to
the issuer.
``(F) The beneficial owners of the issuer.
``(G) The intended use of the proceeds from the
covered exempted transaction, including each country in
which the issuer intends to invest those proceeds,
which shall be broken down by the percentage of net
proceeds by industry within each such country.
``(H) The exemption the issuer relies on with
respect to the covered exempted transaction.
``(2) Particular covered exempted transaction described.--A
covered exempted transaction described in this paragraph is,
with respect to the issuer offering or selling the security
that is the subject of the covered exempted transaction, either
of the following instances:
``(A) An offer or sale of securities in an amount
that is not less than $25,000,000.
``(B) An offer or sale of a security such that the
offer or sale, together with all covered exempted
transactions by that issuer during the 1-year period
preceding the date on which the issuer offers or sells
the security, constitutes offers or sales in the
aggregate of an amount that is not less than
$50,000,000.
``(c) Authority To Revise and Promulgate Rules, Regulations, and
Forms.--The Commission shall, for the protection of investors and fair
and orderly markets--
``(1) revise and issue such rules, regulations, and forms
as may be necessary to carry out this section; and
``(2) issue rules to set conditions that limit the future
use of covered exempted transactions for issuers that do not
comply with the disclosure requirements of this section.
``(d) Applicability.--This section shall apply with respect to any
covered exempted transaction that occurs on or after the date that is 1
year after the date of enactment of this section.
``(e) Reports.--The Commission shall, on a quarterly basis, prepare
and make publicly available a report that includes all information
submitted by an issuer under this section during the quarter covered by
the report, if that issuer--
``(1) is--
``(A) incorporated in a country of concern; or
``(B) incorporated outside of a country of concern
and is associated with at least 1 consolidated entity--
``(i) the plurality of the assets of which
are in a country of concern; or
``(ii) that is incorporated in a country of
concern; or
``(2) discloses in a filing made pursuant to this section
that the issuer intends to invest the proceeds from a covered
exempted transaction in a country of concern.''.
SEC. 4. PROTECTION OF COVERED SECTORS.
The Defense Production Act of 1950 (50 U.S.C. 4501 et seq.) is
amended by adding at the end the following:
``TITLE VIII--PROTECTION OF COVERED SECTORS
``SEC. 801. DEFINITIONS.
``In this title:
``(1) Appropriate congressional committees.--The term
`appropriate congressional committees' means--
``(A) the Committee on Foreign Affairs, the
Committee on Financial Services, the Committee on Ways
and Means, the Committee on Appropriations, and the
Permanent Select Committee on Intelligence of the House
of Representatives; and
``(B) the Committee on Foreign Relations, the
Committee on Banking, Housing, and Urban Affairs, the
Committee on Finance, the Committee on Appropriations,
and the Select Committee on Intelligence of the Senate.
``(2) Country of concern.--The term `country of concern'
includes--
``(A) the Democratic People's Republic of North
Korea;
``(B) the People's Republic of China, including the
Hong Kong Special Administrative Region and the Macau
Special Administrative Region;
``(C) the Russian Federation;
``(D) the Islamic Republic of Iran; and
``(E) any other country that the President has
identified as engaging in a comprehensive, long-term
strategy that directs, facilitates, or otherwise
supports advancements in sensitive technologies and
products that are critical to the military,
intelligence, surveillance, or cyber-enabled
capabilities of the country to counter United States
capabilities in a way that threatens the national
security of the United States; and
``(F) any other country the President determines
necessary to ensure a country described in any of
subparagraphs (A) through (E) is unable to circumvent
the provisions of this title and the regulations issued
pursuant to this title.
``(3) Covered activity.--
``(A) In general.--Subject to such regulations as
may be prescribed in accordance with section 807, and
except as provided in subparagraph (B), the term
`covered activity' means any activity engaged in by a
United States person that involves--
``(i) an acquisition by such United States
person of an equity interest or contingent
equity interest, or monetary capital
contribution, in a covered foreign entity,
directly or indirectly, by contractual
commitment or otherwise;
``(ii) an arrangement for an interest held
by such United States person in the short- or
long-term debt obligations of a covered foreign
entity that includes governance rights that are
characteristic of an equity investment,
management, or other important rights;
``(iii) the establishment of a wholly owned
subsidiary in a country of concern, such as a
greenfield investment, for the purpose of
production, design, testing, manufacturing,
fabrication, or development related to one or
more covered sectors;
``(iv) the establishment by such United
States person of a joint venture in a country
of concern or with a covered foreign entity for
the purpose of production, design, testing,
manufacturing, fabrication, or research, or
other contractual or other commitments
involving a covered foreign entity to jointly
research and develop new innovation, including
through the transfer of capital or intellectual
property or other business proprietary
information; or
``(v) the acquisition by a United States
person with a covered foreign entity of--
``(I) operational cooperation, such
as through supply or support
arrangements;
``(II) the right to board
representation (as an observer, even if
limited, or as a member) or an
executive role (as may be defined
through regulation) in a covered
foreign entity;
``(III) the ability to direct or
influence such operational decisions as
may be defined through such
regulations;
``(IV) formal governance
representation in any operating
affiliate, such as a portfolio company,
of a covered foreign entity; or
``(V) a new relationship to share
or provide business services, such as
financial services, marketing services,
maintenance, or assembly functions; or
``(vi) knowingly directing transactions by
foreign persons that would constitute covered
activity if engaged in by a United States
person.
``(B) Exceptions.--The term `covered activity' does
not include--
``(i) any transaction the value of which
the President determines is de minimis, as
defined in regulations prescribed in accordance
with section 807;
``(ii) any category of transactions that
the President determines is in the national
interest of the United States, as may be
defined in regulations prescribed in accordance
with section 807;
``(iii) an investment in--
``(I) a publicly traded security
(as such term is defined in section
3(a)(10) of the Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)(10)));
``(II) an index fund, mutual fund,
exchange-traded fund, or a similar
instrument (including associated
derivatives) offered by an investment
company (as such term is defined in
section 3(a)(1) of the Investment
Company Act of 1940 (15 U.S.C. 80a-
3(a)(1))), or by a private investment
fund; or
``(III) a venture capital fund,
private equity fund, fund of funds, or
other pooled investment funds, as the
limited partner, in each case in which
the limited partner's contribution is
solely capital in a limited partnership
structure and--
``(aa) the limited partner
cannot make managerial
decisions, is not responsible
for any debts beyond its
investment, and does not have
the ability (formally or
informally) to influence or
participate in the fund's or a
covered foreign entity's
decision making or operations;
or
``(bb) the investment is
below a de minimis threshold to
be determined by the President;
``(iv) the acquisition of the equity or
other interest owned or held by a covered
foreign entity in an entity or assets located
outside of a country of concern in which the
United States person is acquiring all interests
in the entity or assets held by covered foreign
entity;
``(v) an intracompany transfer of funds
from a United States parent company to a
subsidiary located in a country of concern, as
specified in regulations prescribed in
accordance with section 807;
``(vi) a transaction made pursuant to a
binding, uncalled capital commitment entered
into before the date on which the regulations
prescribed in accordance with section 807 take
effect; or
``(vii) any ordinary or administrative
business transaction as may be defined in such
regulations.
``(4) Covered foreign entity.--Subject to regulations
prescribed in accordance with section 807, the term `covered
foreign entity' means the following:
``(A) Any entity that is incorporated in, has a
principal place of business in, or is organized under
the laws of a country of concern.
``(B) Any entity the equity securities of which are
traded in the ordinary course of business on one or
more exchanges in a country of concern.
``(C) Any agency or instrumentality of the
government of a country of concern.
``(D) Any entity in which any entity described in
subparagraph (A), (B), or (C) holds, individually or in
the aggregate, directly or indirectly, an ownership
interest of greater than 50 percent.
``(E) Any other entity that is not a United States
person and that meets such criteria as may be specified
by the President in such regulations prescribed in
accordance with section 807.
``(5) Covered sectors.--Subject to regulations prescribed
in accordance with section 807, the term `covered sectors'
includes sectors within the following areas:
``(A) Semiconductors and microelectronics.
``(B) Artificial intelligence.
``(C) Quantum information science and technology.
``(D) Hypersonics.
``(E) Satellite-based communications.
``(F) Networked laser scanning systems with both
military and civilian applications.
``(6) Lead agency.--The term `lead agency' means the
Federal agency to which the President delegates, pursuant to
section 802, the authorities provided under this title.
``(7) Party.--The term `party', with respect to an
activity, has the meaning given that term in regulations
prescribed in accordance with section 807.
``(8) United states person.--The term `United States
person' means--
``(A) an individual who is 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 any foreign branch of such an entity.
``SEC. 802. DELEGATION OF AUTHORITIES.
``Except as provided by section 808, the President may delegate the
authorities provided under this title to the head of any Federal agency
the President determines appropriate in order to carry out the
provisions of this title.
``SEC. 803. IDENTIFICATION OF CATEGORIES OF TECHNOLOGIES AND PRODUCTS
IN COVERED SECTORS THAT MAY POSE THREATS TO UNITED STATES
NATIONAL SECURITY.
``(a) In General.--Not later than one year after the date of the
enactment of this title, the President shall--
``(1) identify categories of technologies and products in
covered sectors that may pose an acute threat to the national
security of the United States if developed or acquired by a
country of concern; and
``(2) publish a list of the categories of technologies and
products identified under paragraph (1) in the Federal
Register.
``(b) Annual Updates.--Not later than one year after the
publication of the initial list required by subsection (a)(2), the
President shall--
``(1) review the categories of technologies and products on
that list; and
``(2) publish an updated list of the categories of
technologies and products in the Federal Register if the list
has changed.
``SEC. 804. PROHIBITION ON COVERED ACTIVITIES.
``(a) In General.--The President may, on or after the date on which
the initial list of categories of technologies and products is
published in the Federal Register under section 803(a), prescribe,
subject to public notice and comment, regulations to prohibit a United
States person from engaging, directly or indirectly, in a covered
activity involving a category of technologies and products on the list.
``(b) Elements.--Regulations prescribed under subsection (a) may--
``(1) require that a United States person take all
reasonable steps to prohibit and prevent any transaction by a
foreign entity under the control of the United States person
that would be a prohibited transaction if engaged in by a
United States person; and
``(2) exclude any transaction consisting of the acquisition
of an equity or other interest in an entity located outside a
country of concern, if the President has determined that the
government of the country in which that entity is established
or has its principal place of business has in place a program
for the restriction of certain activities involving countries
of concern that is comparable to the provisions provided for in
this title, after consideration of other relevant factors.
``SEC. 805. MANDATORY NOTIFICATION OF COVERED ACTIVITIES.
``(a) Mandatory Notification.--
``(1) In general.--Beginning on the date that is 90 days
after the date on which the initial list of categories of
technologies and products is published in the Federal Register
under section 803(a), a United States person engaging in a
covered activity described in paragraph (2), or that controls a
foreign entity engaging in an activity that would be a covered
activity described in paragraph (2) if engaged in by a United
States person, shall submit to the President a complete written
notification of the activity not later than 14 days after the
completion date of the activity.
``(2) Covered activities described.--A covered activity
described in this paragraph is a covered activity--
``(A) involving a category of technologies and
products on the list published under section 803; and
``(B) that is not prohibited pursuant to section
804.
``(3) Circulation of notification.--
``(A) In general.--The President shall, upon
receipt of a notification under paragraph (1), promptly
inspect the notification for completeness.
``(B) Incomplete notification.--If a notification
submitted under paragraph (1) is incomplete, the
President shall promptly inform the United States
person that submits the notification that the
notification is not complete and provide an explanation
for relevant material with respect to which the
notification is not complete.
``(4) Identification of non-notified activity.--The
President shall establish a process to identify a covered
activity described in paragraph (2) for which--
``(A) a notification is not submitted to the
President under paragraph (1); and
``(B) information is reasonably available.
``(b) Confidentiality of Information.--
``(1) In general.--Except as provided in paragraph (2), any
information or documentary material filed with the President or
the President's designee pursuant to this section shall be
exempt from disclosure under section 552(b)(3) of title 5,
United States Code, and no such information or documentary
material may be made public.
``(2) Exceptions.--Subject to appropriate confidentiality
and classification requirements, the exemption from disclosure
provided by paragraph (1) shall not prevent the disclosure of
the following:
``(A) Information relevant to any administrative or
judicial action or proceeding.
``(B) Information to Congress or any of the
appropriate committees or subcommittees of Congress.
``(C) Information important to national security
analysis or actions of the President to any domestic
governmental entity, or to any foreign governmental
entity of an ally or partner of the United States,
under the exclusive direction and authorization of the
President or the President's designee, only to the
extent necessary for national security purposes, and
subject to appropriate confidentiality and
classification requirements.
``(D) Information that the parties have consented
to be disclosed to third parties.
``(3) Applicability to congress.--Members of Congress, and
staff of either House of Congress or any committee of Congress,
are subject to the limitations on disclosure of information and
documentary material that are applicable under this subsection.
``SEC. 806. REPORTING REQUIREMENTS.
``(a) In General.--Not later than one year after the date on which
the regulations prescribed under section 807 take effect, and not less
frequently than annually thereafter, the President shall submit to the
appropriate congressional committees a report that--
``(1) lists all notifications submitted under section 805
during the year preceding submission of the report,
disaggregated by--
``(A) sector;
``(B) covered activity;
``(C) covered foreign entity; and
``(D) country of concern;
``(2) includes an assessment of whether to amend the
regulations, including whether to amend the definition of
`covered sectors' to enhance national security;
``(3) provides additional context and information regarding
trends in the sectors, the types of covered activity, and the
countries involved in those notifications, including--
``(A) the locations of the relevant covered foreign
entities; and
``(B) the countries in which the United States
persons, or foreign entities controlled by a United
States person, involved in relevant covered activities
are located;
``(4) includes an assessment of the effectiveness of
measures imposed under this title, including actions taken by
the President as a result of the insight gained from the
information contained in notifications submitted under section
805; and
``(5) makes recommendations for--
``(A) expanding existing Federal programs to
support the production or supply of technologies and
products in covered sectors in the United States,
including the potential of existing authorities to
address any related national security concerns; and
``(B) the continuation, expansion, or modification
of the implementation and administration of this title.
``(b) Form.--Each report required by this section shall be
submitted in unclassified form, but may include a classified annex.
``(c) Prohibition on Disclosure.--Information contained in a report
required by this section may be withheld from disclosure only to the
extent otherwise permitted by statute, except that all information
included pursuant to subsection (a)(1) shall be withheld from public
disclosure.
``SEC. 807. REQUIREMENT FOR REGULATIONS.
``(a) In General.--Not later than 180 days after the date on which
the initial list of categories of technologies and products is
published in the Federal Register pursuant to section 803(a), the
President shall prescribe regulations to carry out this title in
accordance with subchapter II of chapter 5 and chapter 7 of title 5
(commonly known as the `Administrative Procedure Act').
``(b) Elements.--Regulations prescribed to carry out this title
shall--
``(1) specify the types of activities that will be
considered to be covered activities, other than types of
activities described in section 801(3);
``(2) specify the technologies and products in covered
sectors with respect to which covered activities are prohibited
under section 804 or require a notification under section 805,
other than covered sectors specified in section 801(5);
``(3) provide for a process by which parties can ask
questions and get timely guidance as to whether a covered
activity is prohibited under section 804 or requires a
notification under section 805; and
``(4) clarify the terms used in this title, to maximize the
effectiveness of this title.
``(c) Public Notice and Comment.--Regulations issued pursuant to
subsection (a) shall be subject to public notice and comment.
``(d) Low-Burden Regulations.--In prescribing regulations under
this section, the President shall, to the extent practicable, structure
the regulations--
``(1) to minimize the cost and complexity of compliance for
affected parties;
``(2) to ensure the benefits of the regulations outweigh
their costs;
``(3) to adopt the least burdensome alternative that
achieves regulatory objectives;
``(4) to prioritize transparency and stakeholder
involvement in the process of prescribing the regulations; and
``(5) to provide for regular review and streamlining of
regulations prescribed pursuant to this title to reduce
redundancy and complexity.
``SEC. 808. MULTILATERAL ENGAGEMENT AND COORDINATION.
``(a) In General.--The Secretary of State and the head of the lead
agency, in coordination with the Secretary of Commerce, the United
States Trade Representative, the Director of National Intelligence, and
the heads of other relevant Federal agencies, as appropriate, should--
``(1) conduct bilateral and multilateral engagement with
the governments of countries that are allies and partners of
the United States to promote and increase coordination of
protocols and procedures to facilitate the effective
implementation of, and appropriate compliance with, the
prohibitions and notifications pursuant to this title;
``(2) upon adoption of protocols and procedures described
in paragraph (1), work with those governments to establish
mechanisms for sharing information, including trends, with
respect to such activities; and
``(3) work with and encourage the governments of certain
countries that are allies and partners of the United States to
develop similar mechanisms of their own.
``(b) Strategy for Multilateral Engagement and Coordination.--Not
later than 180 days after the date of the enactment of this title, the
Secretary of State and the head of the lead agency, in coordination
with the heads of other relevant Federal agencies, should--
``(1) develop a strategy to work with the governments of
countries that are allies and partners of the United States to
develop mechanisms that are comparable to the prohibitions and
notifications pursuant to this title; and
``(2) assess opportunities to provide technical assistance
to those countries with respect to the development of those
mechanisms.
``(c) Report.--Not later than one year after the date of the
enactment of this title, and annually thereafter for 4 years, the
Secretary of State shall submit to the appropriate congressional
committees a report that includes--
``(1) a discussion of any strategy developed pursuant to
subsection (b)(1), including key tools and objectives for the
development of comparable mechanisms by the governments of
countries that are allies and partners of the United States;
``(2) a list of countries that are allies and partners of
the United States to target for cooperation in developing their
own screening programs;
``(3) the status of the implementation and outcomes of the
strategy; and
``(4) a description of impediments to the establishment of
comparable mechanisms by governments of countries that are
allies and partners of the United States.
``SEC. 809. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated, for each of the first 2
fiscal years beginning on or after the date of the enactment of this
title, such sums as may be necessary to carry out this title, including
to provide outreach to industry and persons affected by this title.
Such amounts shall be derived from amounts otherwise authorized to be
appropriated to the President.
``SEC. 810. HIRING AUTHORITY.
``(a) In General.--The head of lead agency may appoint, without
regard to the provisions of sections 3309 through 3318 of title 5,
United States Code, not more than 25 candidates directly to positions
in the competitive service (as defined in section 2102 of that title)
in that agency.
``(b) Primary Responsibility.--The primary responsibility of
individuals in positions authorized under subsection (a) shall be to
administer this title.
``SEC. 811. PENALTIES AND ENFORCEMENT.
``(a) Unlawful Acts.--It shall be unlawful for a United States
person to violate, attempt to violate, conspire to violate, or cause a
violation of any license, order, regulation, or prohibition issued
under this title.
``(b) Civil Penalties.--
``(1) Penalties.--A civil penalty may be imposed on any
person who commits an unlawful act described in subsection (a)
in an amount not to exceed the greater of--
``(A) $5,000,000; or
``(B) an amount that is twice the amount of the
covered activity that is the basis of the violation
with respect to which the penalty is imposed.
``(c) Criminal Penalties.--A person who willfully commits,
willfully attempts to commit, or willfully conspires to commit, or aids
or abets in the commission of, an unlawful act described in subsection
(a) shall, upon conviction, be fined not more than $1,000,000, or if an
individual, may be imprisoned for not more than 20 years, or both.
``(d) Enforcement.--The Attorney General may seek appropriate
relief, including a temporary or permanent injunction, restraining
order, divestment relief, or other such other order as the Attorney
General may determine to be proper, in the district courts of the
United States in order to implement and enforce this title and any
regulation thereunder.
``SEC. 812. RULE OF CONSTRUCTION.
``Nothing in this title may be construed to--
``(1) restrain or deter United States activities abroad if
such activities do not pose a risk to the national security of
the United States; or
``(2) alter or negate the authority of the President under
any authority, process, regulation, investigation, enforcement
measure, or review provided by or established under any other
provision of Federal law, or any other authority of the
President or Congress under the Constitution of the United
States.
``SEC. 813. NATIONAL INTEREST WAIVER.
``(a) In General.--Subject to subsection (b), the President is
authorized to exempt from any applicable prohibition or notification
requirement under this title any activity determined by the President,
in consultation with the heads of relevant Federal agencies, as
appropriate, to be in the national interest of the United States.
``(b) Congressional Notification.--The President shall--
``(1) notify the appropriate congressional committees not
later than 48 hours after issuing a waiver under subsection
(a); and
``(2) include in such notification an identification of the
national interest justifying the use of the waiver.''.
SEC. 5. LIMITATION ON TRADE AUTHORITIES PROCEDURES RELATING TO
REQUIREMENTS ON CONTENT OF GOODS FROM NONMARKET ECONOMY
COUNTRIES.
Section 106(b) of the Bipartisan Congressional Trade Priorities and
Accountability Act of 2015 (19 U.S.C. 4205(b)) is amended by adding at
the end the following:
``(7) Limitations on procedures relating to origination of
content of goods from nonmarket economy countries.--
``(A) In general.--The trade authorities procedures
shall not apply to an implementing bill submitted with
respect to a trade agreement or trade agreements
entered into under section 103(b) unless the rules of
origin requirements under such agreement or
agreements--
``(i) with respect to rules of origin based
on value content of a good, require that, of
the content of a good qualifying for
preferential treatment under the agreement or
agreements that does not originate (as
specified in those rules) in a country that is
party to the agreement or agreements--
``(I) during the 5-year period
following the entry into force of the
agreement or agreements, not more than
20 percent of that content may
originate in a nonmarket economy
country; and
``(II) after the period specified
in subclause (I), not more than 10
percent of that content may originate
in a nonmarket economy country; and
``(ii) with respect to rules of origin that
are not based on value content of a good, are
consistent with the requirements under clause
(i) based on processing requirements or tariff
shifts as opposed to value content.
``(B) Nonmarket economy country defined.--In this
paragraph, the term `nonmarket economy country' has the
meaning given that term in section 771(18) of the
Tariff Act of 1930 (19 U.S.C. 1677(18)).''.
SEC. 6. STRATEGY AND OUTREACH ON RISKS POSED BY PEOPLE'S REPUBLIC OF
CHINA SMARTPORT TECHNOLOGY.
(a) Strategy and Outreach Required.--The Director of the National
Counterintelligence and Security Center shall develop a strategy and
conduct outreach to United States industry, including shipping
companies, port operators, and logistics firms, on the risks of
smartport technology of the People's Republic of China and other
related risks posed by entities of the People's Republic of China,
including LOGINK, China Ocean Shipping Company, Limited (COSCO), China
Communications Construction Company, Limited (CCCC), China Media Group
(CMG), and Shanghai Zhenhua Heavy Industries Company Limited (ZPMC), to
the national security of the United States, the security of United
States supply chains, and commercial activity, including with respect
to delays, interruption, and lockout of access to systems and
technologies that enable the free flow of commerce.
(b) Consistency With Executive Orders and Other Statutory
Authorities.--The Director shall carry out subsection (a) in a manner
that is consistent with the following:
(1) Part 6 of title 33, Code of Federal Regulations, as
amended by Executive Order 14116 (89 Fed. Reg. 13971; relating
to amending regulations relating to the safeguarding of
vessels, harbors, ports, and waterfront facilities of the
United States).
(2) Executive Order 14017 (86 Fed. Reg. 11849; relating to
America's supply chains), or successor order.
(3) Section 825 of the National Defense Authorization Act
for Fiscal Year 2024 (Public Law 118-31).
(c) Coordination.--The Director shall carry out subsection (a) in
coordination with the Commandant of the U.S. Coast Guard, the Director
of the Federal Bureau of Investigation, the Commander of the Office of
Naval Intelligence, and such other heads of Federal agencies as the
Director considers appropriate.
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