[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1053 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 1053
To protect the national security of the United States by imposing
sanctions with respect to certain persons of the People's Republic of
China and prohibiting and requiring notifications with respect to
certain investments by United States persons in the People's Republic
of China, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 13, 2025
Mr. Cornyn (for himself, Ms. Cortez Masto, Mr. Scott of South Carolina,
Mr. Schumer, Mr. Sullivan, Ms. Warren, Mr. Hagerty, Mr. Kim, Mr.
Ricketts, Ms. Slotkin, Mr. Banks, Mr. Bennet, Mr. McCormick, and Mr.
Fetterman) introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To protect the national security of the United States by imposing
sanctions with respect to certain persons of the People's Republic of
China and prohibiting and requiring notifications with respect to
certain investments by United States persons in 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; TABLE OF CONTENTS.
(a) Short Title.--This title may be cited as the ``Foreign
Investment Guardrails to Help Thwart China Act of 2025'' or ``FIGHT
China Act of 2025''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Secretary defined.
Sec. 3. Severability.
Sec. 4. Authorization of appropriations.
Sec. 5. Termination.
TITLE I--IMPOSITION OF SANCTIONS
Sec. 101. Imposition of sanctions.
Sec. 102. Definitions.
TITLE II--PROHIBITION AND NOTIFICATION ON INVESTMENTS RELATING TO
COVERED NATIONAL SECURITY TRANSACTIONS
Sec. 201. Prohibition and notification on investments relating to
covered national security transactions.
TITLE III--SECURITIES AND RELATED MATTERS
Sec. 301. Requirements relating to the Non-SDN Chinese Military-
Industrial Complex Companies List.
SEC. 2. SECRETARY DEFINED.
Except as otherwise provided, in this Act, the term ``Secretary''
means the Secretary of the Treasury.
SEC. 3. SEVERABILITY.
If any provision of this Act, or the application thereof, is held
invalid, the validity of the remainder of this Act and the application
of such provision to other persons and circumstances shall not be
affected thereby.
SEC. 4. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There is authorized to be appropriated
$150,000,000 to the Department of the Treasury, out of which amounts
may be transferred to the Department of Commerce to jointly conduct
outreach to industry and persons affected by this Act, for each of the
first two fiscal years beginning on or after the date of the enactment
of this Act, to carry out this Act.
(b) Hiring Authority.--
(1) By the president.--The President may appoint, without
regard to the provisions of sections 3309 through 3318 of title
5, United States Code, not more than 15 individuals directly to
positions in the competitive service (as defined in section
2102 of that title) to carry out this Act.
(2) By agencies.--The Secretary and the Secretary of
Commerce may appoint, without regard to the provisions of
sections 3309 through 3318 of title 5, United States Code,
individuals directly to positions in the competitive service
(as defined in section 2102 of that title) of the Department of
the Treasury and the Department of Commerce, respectively, to
carry out this Act.
SEC. 5. TERMINATION.
This Act shall cease to have any force or effect on the date on
which the Secretary of Commerce revises section 791.4 of title 15, Code
of Federal Regulations, to remove the People's Republic of China from
the list of foreign adversaries contained in such section.
TITLE I--IMPOSITION OF SANCTIONS
SEC. 101. IMPOSITION OF SANCTIONS.
(a) In General.--The President may impose the sanctions described
in subsection (b) with respect to any foreign person determined by the
Secretary, in consultation with the Secretary of State, to be a covered
foreign person.
(b) Sanctions Described.--The President may exercise all of the
powers granted to the President under the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.) to the extent necessary to
block and prohibit all transactions in property and interests in
property of a foreign person that is determined to be a covered foreign
person pursuant to subsection (a) 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.
(c) 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) shall apply to any person who violates, attempts to
violate, conspires to violate, or causes a violation of any prohibition
of this section, or an order or regulation prescribed under this
section, to the same extent that such penalties apply to a person that
commits an unlawful act described in section 206(a) of such Act (50
U.S.C. 1705(a)).
(d) Exception for Intelligence and Law Enforcement Activities.--
Sanctions under this section shall not apply with respect 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.
(e) Exception for United States Government Activities.--Nothing in
this section shall prohibit transactions for the conduct of the
official business of the Federal Government by employees, grantees, or
contractors thereof.
(f) Report to Congress.--Not later than 365 days after the date of
the enactment of this Act, and annually thereafter for 7 years, the
Secretary shall submit to the appropriate congressional committees a
report that--
(1) states whether each foreign person on the Non-SDN
Chinese Military-Industrial Complex Companies List is a covered
foreign person; and
(2) shall be submitted in unclassified form, but may
include a classified annex.
(g) Consideration of Certain Information in Imposing Sanctions.--In
determining whether a foreign person is a covered foreign person, the
President--
(1) may consider credible information obtained by other
countries, nongovernmental organizations, or the appropriate
congressional committees that relates to the foreign person;
and
(2) may consider any other information that the Secretary
deems relevant.
(h) Administrative Provisions.--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
this section.
(i) Delegation.--The President shall delegate the authorities
granted by this section to the Secretary.
SEC. 102. DEFINITIONS.
In this title:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Financial Services and the
Committee on Foreign Affairs of the House of
Representatives; and
(B) the Committee on Banking, Housing, and Urban
Affairs and the Committee on Foreign Relations of the
Senate.
(2) Country of concern.--The term ``country of concern''--
(A) means the People's Republic of China; and
(B) includes the Hong Kong Special Administrative
Region and the Macau Special Administrative Region.
(3) Covered foreign person.--The term ``covered foreign
person'' means a foreign person--
(A)(i) that is incorporated in, has a principal
place of business in, or is organized under the laws of
a country of concern;
(ii) the equity securities of which are primarily
traded in the ordinary course of business on one or
more exchanges in a country of concern;
(iii) that is a member of the Central Committee of
the Chinese Communist Party;
(iv) that is the state or the government of a
country of concern, as well as any political
subdivision, agency, or instrumentality thereof;
(v) that is subject to the direction or control of
any entity described in clause (i), (ii), (iii), or
(iv); or
(vi) that is owned in the aggregate, directly or
indirectly, 50 percent or more by an entity or a group
of entities described in clause (i), (ii), (iii), or
(iv); and
(B) that knowingly engaged in significant
operations in the defense and related materiel sector
or the surveillance technology sector of the economy of
a country of concern.
(4) Foreign person.--The term ``foreign person'' means a
person, country, state, or government (and any political
subdivision, agency, or instrumentality thereof) that is not a
United States person.
(5) Non-SDN chinese military-industrial complex companies
list.--The term ``Non-SDN Chinese Military-Industrial Complex
Companies List'' means the list maintained by the Office of
Foreign Assets Control of the Department of the Treasury under
Executive Order 13959, as amended by Executive Order 14032 (50
U.S.C. 1701 note; relating to addressing the threat from
securities investments that finance certain companies of the
People's Republic of China), or any successor order.
(6) United states person.--The term ``United States
person'' means--
(A) any 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 any foreign branch of such an
entity); or
(C) any person in the United States.
TITLE II--PROHIBITION AND NOTIFICATION ON INVESTMENTS RELATING TO
COVERED NATIONAL SECURITY TRANSACTIONS
SEC. 201. PROHIBITION AND NOTIFICATION ON INVESTMENTS RELATING TO
COVERED NATIONAL SECURITY TRANSACTIONS.
The Defense Production Act of 1950 (50 U.S.C. 4501 et seq.) is
amended by adding at the end the following:
``TITLE VIII--PROHIBITION AND NOTIFICATION ON INVESTMENTS RELATING TO
COVERED NATIONAL SECURITY TRANSACTIONS
``SEC. 801. PROHIBITION ON INVESTMENTS.
``(a) In General.--The Secretary may prohibit, in accordance with
regulations issued under subsection (e), a United States person from
knowingly engaging in a covered national security transaction in a
prohibited technology.
``(b) Evasion.--Any transaction by a United States person or within
the United States that evades or avoids, has the purpose of evading or
avoiding, causes a violation of, or attempts to violate the prohibition
set forth in subsection (a) is prohibited.
``(c) Waiver.--Subject to subsection (d), the Secretary is
authorized to exempt from the prohibition set forth in subsection (a)
any activity determined by the President, in consultation with the
Secretary, the Secretary of Commerce and, as appropriate, the heads of
other relevant Federal departments and agencies, to be in the national
interest of the United States.
``(d) Congressional Notification.--The Secretary shall--
``(1) notify the appropriate congressional committees not
later than 5 business days after issuing a waiver under
subsection (c); and
``(2) include in such notification an identification of the
national interest justifying the use of the waiver.
``(e) Regulations.--
``(1) In general.--The Secretary, in consultation with the
Secretary of Commerce and, as appropriate, the heads of other
relevant Federal departments and agencies, may issue
regulations to carry out this section in accordance with
subchapter II of chapter 5 and chapter 7 of title 5, United
States Code (commonly known as `Administrative Procedure Act').
``(2) Non-binding feedback.--
``(A) In general.--The regulations issued under
paragraph (1) shall include a process under which a
person can request non-binding feedback on a
confidential basis as to whether a transaction would
constitute a covered national security transaction in a
prohibited technology.
``(B) Authority to limit frivolous feedback
requests.--In establishing the process required by
subparagraph (A), the Secretary may prescribe
limitations on requests for feedback identified as
frivolous for purposes of this subsection.
``(3) Notice and opportunity to cure.--
``(A) In general.--The regulations issued under
paragraph (1) shall account for whether a United States
person has self-identified a violation of the
prohibition set forth in subsection (a) in determining
the legal consequences of that violation.
``(B) Self-disclosure letters.--The regulations
issued under paragraph (1) shall dictate the form and
content of a letter of self-disclosure, which shall
include relevant facts about the violation, why the
United States person believes its activity to have
violated the prohibition set forth in subsection (a),
and a proposal for mitigation of the harm of such
action.
``(4) Public notice and comment.--The regulations issued
under paragraph (1) shall be subject to public notice and
comment.
``(5) Low-burden regulations.--In issuing regulations under
paragraph (1), the Secretary shall balance the priority of
protecting the national security interest of the United States
while, to the extent practicable--
``(A) minimizing the cost and complexity of
compliance for affected parties, including the
duplication of reporting requirements under current
regulations;
``(B) adopting the least burdensome alternative
that achieves regulatory objectives; and
``(C) prioritizing transparency and stakeholder
involvement in the process of issuing the rules.
``(6) Penalties.--
``(A) In general.--The regulations issued under
paragraph (1) shall provide for the imposition of civil
penalties described in subparagraph (B) for violations
of the prohibition set forth in subsection (a).
``(B) Penalties described.--
``(i) Unlawful acts.--It shall be unlawful
for a person to violate, attempt to violate,
conspire to violate, or cause a violation of
any license, order, regulation, notification
requirement, or prohibition issued under this
section.
``(ii) Civil penalty.--The Secretary may
impose a civil penalty on any person who
commits an unlawful act described in clause (i)
in an amount not to exceed the greater of--
``(I) $250,000; or
``(II) an amount that is twice the
amount of the transaction that is the
basis of the violation with respect to
which the penalty is imposed.
``(iii) Divestment.--The Secretary may
compel the divestment of a covered national
security transaction in a prohibited technology
determined to be in violation of this title.
``(iv) Relief.--The President may direct
the Attorney General of the United States to
seek appropriate relief, including divestment
relief, in the district courts of the United
States, in order to implement and enforce this
title.
``(7) Burden of proof.--In accordance with section 556(d)
of title 5, United States Code, in an enforcement action for a
violation of the prohibition set forth in subsection (a), the
burden of proof shall be upon the Secretary.
``SEC. 802. NOTIFICATION ON INVESTMENTS.
``(a) Mandatory Notification.--Not later than 450 days after the
date of the enactment of this title, the Secretary shall issue
regulations prescribed in accordance with subsection (b), to require a
United States person that engages in a covered national security
transaction in a prohibited technology (unless the Secretary has
exercised the authority provided by section 801(a) to prohibit
knowingly engaging in such covered national security transaction) or a
notifiable technology to submit to the Secretary a written notification
of the transaction not later than 30 days after the completion date of
the transaction.
``(b) Regulations.--
``(1) In general.--Not later than 450 days after the date
of the enactment of this title, the Secretary, in consultation
with the Secretary of Commerce and, as appropriate, the heads
of other relevant Federal departments and agencies, shall issue
regulations to carry out this section in accordance with
subchapter II of chapter 5 and chapter 7 of title 5, United
States Code (commonly known as `Administrative Procedure Act').
``(2) Public notice and comment.--The regulations issued
under paragraph (1) shall be subject to public notice and
comment.
``(3) Low-burden regulations.--In issuing regulations under
paragraph (1), the Secretary shall balance the priority of
protecting the national security interest of the United States
while, to the extent practicable--
``(A) minimizing the cost and complexity of
compliance for affected parties, including the
duplication of reporting requirements under current
regulation;
``(B) adopting the least burdensome alternative
that achieves regulatory objectives; and
``(C) prioritizing transparency and stakeholder
involvement in the process of issuing the rules.
``(4) Penalties.--
``(A) In general.--The regulations issued under
paragraph (1) shall provide for the imposition of civil
penalties described in subparagraph (B) for violations
of the notification requirement set forth in subsection
(a).
``(B) Penalties described.--
``(i) Unlawful acts.--It shall be unlawful
for a person to violate, attempt to violate,
conspire to violate, or cause a violation of
any license, order, regulation, notification
requirement, or prohibition issued under this
section.
``(ii) Civil penalty.--A civil penalty may
be imposed on any person who commits an
unlawful act described in clause (i) in an
amount not to exceed the greater of--
``(I) $250,000; or
``(II) an amount that is twice the
amount of the transaction that is the
basis of the violation with respect to
which the penalty is imposed.
``(5) Burden of proof.--In accordance with section 556(d)
of title 5, United States Code, in an enforcement action for a
violation of the prohibition set forth in subsection (a), the
burden of proof shall be upon the Secretary.
``(6) Completeness of notification.--
``(A) In general.--The Secretary shall, upon
receipt of a notification under subsection (a), and in
consultation with the Secretary of Commerce, promptly
inspect the notification for completeness.
``(B) Incomplete notifications.--If a notification
submitted under subsection (a) is incomplete, the
Secretary shall promptly inform the United States
person that submits the notification that the
notification is not complete and provide an explanation
of relevant material respects in which the notification
is not complete.
``(7) Identification of non-notified activity.--The
Secretary, in coordination with the Secretary of Commerce,
shall establish a process to identify covered national security
transactions in a prohibited technology or a notifiable
technology for which--
``(A) a notification is not submitted to the
Secretary under subsection (a); and
``(B) information is reasonably available.
``(c) Confidentiality of Information.--
``(1) In general.--Except as provided in paragraph (2), any
information or documentary material filed with the Secretary
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 by any
government agency or Member of Congress.
``(2) Exceptions.--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 provided to Congress or any of
the appropriate congressional committees.
``(C) Information important to the national
security analysis or actions of the Secretary to any
domestic governmental entity, or to any foreign
governmental entity of an ally or partner of the United
States, under the direction and authorization of the
Secretary, 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.
``(E) Information where the disclosure of such
information is determined by the Secretary to be in the
national security interest.
``(d) Inapplicability.--If the Secretary prohibits a covered
national security transaction in a prohibited technology under section
801, the requirements of this section shall not apply with respect to
the covered national security transaction.
``SEC. 803. REPORT.
``(a) In General.--Not later than one year after the date on which
the regulations issued under section 801(e) take effect, and not less
frequently than annually thereafter for 7 years, the Secretary, in
consultation with the Secretary of Commerce, shall submit to the
appropriate congressional committees a report that--
``(1) lists all enforcement actions taken subject to the
regulations during the year preceding submission of the report,
which includes, with respect to each such action, a description
of--
``(A) the prohibited technology or notifiable
technology;
``(B) the covered national security transaction;
and
``(C) the covered foreign person;
``(2) provides an assessment of whether Congress should
amend the definition of the term `prohibited technology' by--
``(A) identifying additional technologies, not
currently listed as a prohibited technology, that the
Secretary, in consultation with the Secretary of
Commerce and, as applicable, the Secretary of Defense,
the Secretary of State, the Secretary of Energy, the
Director of National Intelligence, and the heads of any
other relevant Federal agencies, determines may pose an
acute threat to the national security of the United
States if developed or acquired by a country of
concern;
``(B) explaining why each technology identified in
subparagraph (A) may pose an acute threat to the
national security of the United States if developed or
acquired by a country of concern; and
``(C) recommending the repeal of technologies from
the category of prohibited technology to the extent
that the technologies no longer pose an acute threat to
the national security of the United States if developed
or acquired by a country of concern;
``(3) lists all notifications submitted under section 802
during the year preceding submission of the report and
includes, with respect to each such notification--
``(A) basic information on each party to the
covered national security transaction with respect to
which the notification was submitted; and
``(B) the nature of the covered national security
transaction that was the subject to the notification,
including the elements of the covered national security
transaction that necessitated a notification;
``(4) includes a summary of those notifications,
disaggregated by prohibited technology, notifiable technology,
by covered national security transaction, and by country of
concern;
``(5) provides additional context and information regarding
trends in the prohibited technology, notifiable technology, the
types of covered national security transaction, and the
countries involved in those notifications; and
``(6) assesses the overall impact of those notifications,
including recommendations for--
``(A) expanding existing Federal programs to
support the production or supply of prohibited
technologies or notifiable technologies in the United
States, including the potential of existing authorities
to address any related national security concerns;
``(B) investments needed to enhance prohibited
technologies or notifiable technologies and reduce
dependence on countries of concern regarding those
technologies; and
``(C) the continuation, expansion, or modification
of the implementation and administration of this title,
including recommendations with respect to whether the
definition of the term `country of concern' under
section 807(2) should be amended to add or remove
countries.
``(b) Consideration of Certain Information.--In preparing the
report pursuant to subsection (a), the Secretary--
``(1) shall consider information provided jointly by the
chairperson and ranking member of any of the appropriate
congressional committees;
``(2) may consider credible information obtained by other
countries and nongovernmental organizations that monitor the
military, surveillance, intelligence, or technology
capabilities of a country of concern; and
``(3) may consider any other information that the Secretary
deems relevant.
``(c) Form of Report.--Each report required by this section shall
be submitted in unclassified form, but may include a classified annex.
``(d) Testimony Required.--Not later than one year after the date
of the enactment of this title, and annually thereafter for five years,
the Secretary and the Secretary of Commerce shall each provide to the
Committee on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives
testimony with respect to the national security threats relating to
investments by United States persons in countries of concern and
broader international capital flows.
``(e) Requests by Appropriate Congressional Committees.--
``(1) In general.--After receiving a request that meets the
requirements of paragraph (2) with respect to whether a
technology should be included in the amendments as described in
subsection (a)(2), the Secretary shall, in preparing the report
pursuant to subsection (a)--
``(A) determine if that technology may pose an
acute threat to the national security of the United
States if developed or acquired by a country of
concern; and
``(B) include in the report pursuant to subsection
(a) an explanation with respect to that determination
that includes--
``(i) a statement of whether or not the
technology, as determined by the Secretary, may
pose an acute threat to the national security
of the United States if developed or acquired
by a country of concern; and
``(ii) if the Secretary determines that--
``(I) the technology may pose an
acute threat to the national security
of the United States if developed or
acquired by a country of concern, an
explanation for such determination and
a recommendation whether that
technology should be named a prohibited
technology or a notifiable technology;
and
``(II) the technology would not
pose an acute threat to the national
security of the United States if
developed or acquired by a country of
concern, an explanation for such
determination.
``(2) Requirements.--A request under paragraph (1) with
respect to whether a technology may pose an acute threat to the
national security of the United States if developed or acquired
by a country of concern shall be submitted to the Secretary in
writing jointly by the chairperson and ranking member of one or
more of the appropriate congressional committees.
``SEC. 804. MULTILATERAL ENGAGEMENT AND COORDINATION.
``(a) Authorities.--The Secretary, in coordination with the
Secretary of State, the Secretary of Commerce, and the heads of other
relevant Federal agencies, 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 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 countries
that are allies and partners of the United States to develop
similar mechanisms of their own, for the exclusive purpose of
preventing the development or acquisition of prohibited
technologies by a country of concern.
``(b) Strategy for Multilateral Engagement and Coordination.--Not
later than 180 days after the date of the enactment of this title, the
Secretary, in consultation with the Secretary of State, the Secretary
of Commerce, and 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
pursuant to this title, for the exclusive purpose of preventing
the development and acquisition of prohibited technologies by a
country of concern; 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 four years, the
Secretary 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
allies and partners of the United States;
``(2) a list of partner and allied countries to target for
cooperation in developing their own prohibitions;
``(3) the status of the strategy's implementation and
outcomes; and
``(4) a description of impediments to the establishment of
comparable mechanisms by governments of allies and partners of
the United States.
``(d) Appropriate Congressional Committees Defined.--In this
section, the term `appropriate congressional committees' means--
``(1) the Committee on Foreign Relations and the Committee
on Banking, Housing, and Urban Affairs of the Senate; and
``(2) the Committee on Foreign Affairs and the Committee on
Financial Services of the House of Representatives.
``SEC. 805. PUBLIC DATABASE OF COVERED FOREIGN PERSONS.
``(a) In General.--The Secretary, in consultation with the
Secretary of Commerce, may establish a publicly accessible, non-
exhaustive database that identifies covered foreign persons in a
prohibited technology pursuant to this title.
``(b) Confidentiality of Evidence.--The Secretary shall establish a
mechanism for the public, including Congress, stakeholders, investors,
and nongovernmental organizations, to submit evidence on a confidential
basis regarding whether a foreign person is a covered foreign person in
a prohibited technology and should be included in the database
described in subsection (a), if any.
``(c) Exemption From Disclosure.--
``(1) In general.--Except as provided in paragraph (2), any
information or documentary material filed with the Secretary
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 (other
than the identity of a covered foreign person in accordance
with subsection (b)).
``(2) Exceptions.--Paragraph (1) shall not prohibit the
disclosure of the following:
``(A) Information relevant to any administrative or
judicial action or proceeding.
``(B) Information to Congress or any duly
authorized committee or subcommittee of Congress.
``(C) Information important to the national
security analysis or actions of the Secretary to any
domestic governmental entity, or to any foreign
governmental entity of a United States ally or partner,
under the exclusive direction and authorization of the
Secretary, 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.
``(d) Rule of Construction.--The database described in subsection
(a), if any, shall not be considered to be an exhaustive or
comprehensive list of covered foreign persons for the purposes of this
title.
``SEC. 806. RULE OF CONSTRUCTION.
``Nothing in this title may be construed to 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 the Congress under the Constitution of the United States.
``SEC. 807. DEFINITIONS.
``In this title:
``(1) Appropriate congressional committees.--Except as
provided by section 804(d), the term `appropriate congressional
committees' means--
``(A) the Committee on Financial Services, the
Committee on Foreign Affairs, the Committee on Energy
and Commerce, and the Committee on Appropriations of
the House of Representatives; and
``(B) the Committee on Banking, Housing, and Urban
Affairs and the Committee on Appropriations of the
Senate.
``(2) Country of concern.--The term `country of concern'--
``(A) means the People's Republic of China; and
``(B) includes the Hong Kong Special Administrative
Region and the Macau Special Administrative Region.
``(3) Covered foreign person.--Subject to regulations
prescribed in accordance with this title, the term `covered
foreign person' means a foreign person that--
``(A) is incorporated in, has a principal place of
business in, or is organized under the laws of a
country of concern;
``(B) is a member of the Central Committee of the
Chinese Communist Party;
``(C) is subject to the direction or control of a
country of concern, an entity described in subparagraph
(A) or (B), or the state or the government of a country
of concern (including any political subdivision,
agency, or instrumentality thereof); or
``(D) is owned in the aggregate, directly or
indirectly, 50 percent or more by a country of concern,
an entity described in subparagraph (A) or (B), or the
state or the government of a country of concern
(including any political subdivision, agency, or
instrumentality thereof).
``(4) Covered national security transaction.--
``(A) In general.--Subject to such regulations as
may be issued in accordance with this title, the term
`covered national security transaction' means any
activity engaged in by a United States person that
involves--
``(i) the acquisition of an equity interest
or contingent equity interest in a covered
foreign person;
``(ii) the provision of a loan or similar
debt financing arrangement to a covered foreign
person, where such debt financing--
``(I) is convertible to an equity
interest; or
``(II) affords or will afford the
United States person the right to make
management decisions with respect to or
on behalf of a covered foreign person
or the right to appoint members of the
board of directors (or equivalent) of
the covered foreign person;
``(iii) the entrance by such United States
person into a joint venture with a covered
foreign person;
``(iv) the conversion of a contingent
equity interest (or interest equivalent to a
contingent equity interest) or conversion of
debt to an equity interest in a covered foreign
person;
``(v) the acquisition, leasing, or other
development of operations, land, property, or
other assets in a country of concern that will
result in, or that the United States person
intends to result in--
``(I) the establishment of a
covered foreign person; or
``(II) the engagement of a person
of a country of concern in a prohibited
technology where it was not previously
engaged in such prohibited technology;
``(vi) knowingly directing transactions by
foreign persons that the United States person
has knowledge at the time of the transaction
would constitute an activity described in
clause (i), (ii), (iii), (iv), or (v), if
engaged in by a United States person; or
``(vii) the acquisition of a limited
partner or equivalent interest in a venture
capital fund, private equity fund, fund of
funds, or other pooled investment fund that the
United States person has knowledge at the time
of the acquisition, intends to engage in an
activity described in clause (i), (ii), (iii),
(iv), (v), or (vi).
``(B) Exceptions.--Subject to notice and comment
regulations prescribed in consultation with Congress
and in accordance with this title, the term `covered
national security transaction' does not include--
``(i) any transaction the value of which
the Secretary determines is de minimis;
``(ii) any category of transactions that
the Secretary determines is in the national
interest of the United States;
``(iii) an investment--
``(I) in a security (as defined in
section 3(a) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a))) that is
traded on an exchange or the over-the-
counter market in any jurisdiction;
``(II) in a security issued by an
investment company (as defined in
section 3 of the Investment Company Act
of 1940 (15 U.S.C. 80a-3)) that is
registered with the Securities and
Exchange Commission;
``(III) made as a limited partner
or equivalent in a venture capital
fund, private equity fund, fund of
funds, or other pooled investment fund
(other than as described in subclause
(II)) where--
``(aa) the limited partner
or equivalent's committed
capital is not more than
$2,000,000, aggregated across
any investment and co-
investment vehicles of the
fund; or
``(bb) the limited partner
or equivalent has secured a
binding contractual assurance
that its capital in the fund
will not be used to engage in a
transaction that would be a
covered national security
transaction if engaged in by a
United States person; or
``(IV) in a derivative of a
security described under subclause (I),
(II), or (III);
``(iv) any ancillary transaction undertaken
by a financial institution (as defined in
section 5312 of title 31, United States Code);
``(v) the acquisition by a United States
person of the equity or other interest owned or
held by a covered foreign person in an entity
or assets located outside of a country of
concern in which the United States person is
acquiring the totality of the interest in the
entity held by the covered foreign person;
``(vi) an intracompany transfer of funds,
as defined in regulations prescribed in
accordance with this title, from a United
States parent company to a subsidiary located
in a country of concern or a transaction that,
but for this clause, would be a covered
national security transaction between a United
States person and its controlled foreign person
that supports operations that are not covered
national security transactions or that
maintains covered national security
transactions that the controlled foreign person
was engaged in prior to January 2, 2025;
``(vii) a transaction secondary to a
covered national security transaction,
including--
``(I) contractual arrangements or
the procurement of material inputs for
any covered national security
transaction (such as raw materials);
``(II) bank lending;
``(III) the processing, clearing,
or sending of payments by a bank;
``(IV) underwriting services;
``(V) debt rating services;
``(VI) prime brokerage;
``(VII) global custody;
``(VIII) equity research or
analysis; or
``(IX) other similar services;
``(viii) any ordinary or administrative
business transaction as may be defined in such
regulations; or
``(ix) any transaction completed before the
date of the enactment of this title.
``(C) Ancillary transaction defined.--In this
paragraph, the term `ancillary transaction' means--
``(i) the processing, settling, clearing,
or sending of payments and cash transactions;
``(ii) underwriting services;
``(iii) credit rating services; and
``(iv) other services ordinarily incident
to and part of the provision of financial
services, such as opening deposit accounts,
direct custody services, foreign exchange
services, remittances services, and safe
deposit services.
``(5) Foreign person.--The term `foreign person' means a
person that is not a United States person.
``(6) Notifiable technology.--
``(A) In general.--The term `notifiable technology'
means a technology with respect to which a covered
foreign person--
``(i) designs any advanced integrated
circuit that is not covered under paragraph
(8)(A)(iii);
``(ii) fabricates any integrated circuit
that is not covered under paragraph (8)(A)(iv);
``(iii) packages any integrated circuit
that is not covered under paragraph (8)(A)(v);
or
``(iv) develops any artificial intelligence
system that is not covered under clause (vii),
(viii), (ix), or (xvi) of paragraph (8)(A), and
that is--
``(I) designed to be used for--
``(aa) any military end use
(such as for weapons targeting,
target identification, combat
simulation, military vehicle or
weapons control, military
decision-making, weapons design
(including chemical,
biological, radiological, or
nuclear weapons), or combat
system logistics and
maintenance); or
``(bb) any government
intelligence or mass-
surveillance end use (such as
through incorporation of
features such as mining text,
audio, or video, image
recognition, location tracking,
or surreptitious listening
devices);
``(II) intended by the covered
foreign person or joint venture to be
used for--
``(aa) cybersecurity
applications;
``(bb) digital forensics
tools;
``(cc) penetration testing
tools; or
``(dd) control of robotic
systems; or
``(III) trained using a quantity of
computing power greater than 10\23\
computational operations (such as
integer or floating-point operations).
``(B) Updates.--The Secretary, in consultation with
Congress, may prescribe regulations in accordance with
this title to refine the technical parameters of
technologies described in subparagraph (A) as
reasonably needed for national security purposes or to
add or remove categories to or from the list in
subparagraph (A).
``(7) Party.--The term `party', with respect to a covered
national security transaction, has the meaning given that term
in regulations prescribed in accordance with this title.
``(8) Prohibited technology.--
``(A) In general.--The term `prohibited technology'
means a technology with respect to which a covered
foreign person--
``(i) develops or produces any design
automation software for the design of
integrated circuits or advanced packaging;
``(ii) develops or produces any--
``(I) electronic design automation
software for the design of integrated
circuits or advanced packaging;
``(II) front-end semiconductor
fabrication equipment designed for the
volume fabrication of integrated
circuits, including equipment used in
the production stages from a blank
wafer or substrate to a completed wafer
or substrate; or
``(III) equipment for performing
volume advanced packaging;
``(iii) designs any integrated circuit
designs that meet or exceed the specifications
set in Export Control Classification Number
(ECCN) 3A090 in Supplement No. 1 to the Export
Administration Regulations, or integrated
circuits designed for operation at or below 4.5
Kelvin;
``(iv) fabricates integrated circuits that
are--
``(I) logic integrated circuits
using a non-planar transistor
architecture or with a technology node
of 16/14 nanometers or less, including
fully depleted silicon-on-insulator
(FDSOI) integrated circuits;
``(II) NOT-AND (NAND) memory
integrated circuits with 128 layers or
more;
``(III) dynamic random-access
memory (DRAM) integrated circuits using
a technology node of 18 nanometer half-
pitch or less;
``(IV) integrated circuits
manufactured from a gallium-based
compound semiconductor;
``(V) integrated circuits using
graphene transistors or carbon
nanotubes; or
``(VI) integrated circuits designed
for operation at or below 4.5 Kelvin;
``(v) packages any integrated circuit using
advanced packaging techniques;
``(vi) develops, designs, or produces any
commodity, material, software, or technology
designed exclusively for use in or with extreme
ultraviolet lithography fabrication equipment;
``(vii) develops, designs, or produces any
artificial intelligence models trained with at
least 10\25\ floating point operations;
``(viii) develops, designs, or produces any
artificial intelligence models that rely upon
or utilize advanced integrated circuits that
meet or exceed the specifications set in Export
Control Classification Number (ECCN) 3A090 in
Supplement No. 1 to the Export Administration
Regulations;
``(ix) develops, designs, or produces any
artificial intelligence models designed for use
by the Government of the People's Republic of
China, its special administrative regions, or
its agencies and instrumentalities;
``(x) develops a quantum computer or
produces any critical components required to
produce a quantum computer such as a dilution
refrigerator or two-stage pulse tube
cryocooler;
``(xi) develops or produces any quantum
sensing platform designed for, or which the
relevant covered foreign person intends to be
used for, any military, government
intelligence, or mass-surveillance end use;
``(xii) develops or produces quantum
networks or quantum communication systems
designed for or intended to be used for--
``(I) networking to scale up the
capabilities of quantum computers, such
as for the purposes of breaking or
compromising encryption;
``(II) secure communications, such
as quantum key distribution; or
``(III) any other application that
has any military, government
intelligence, or mass-surveillance end
use;
``(xiii) develops, designs, or produces
materials, components, avionics, flight
control, propulsion, Global Positioning System
(GPS), data relay, and target detection systems
designed for use in hypersonic systems or
capable of sustainable operations above 1,000
degrees Celsius;
``(xiv) develops, installs, sells, or
produces any supercomputer enabled by advanced
integrated circuits that can provide
theoretical compute capacity of 100 or more
double-precision (64-bit) petaflops or 200 or
more single-precision (32-bit) petaflops of
processing power within a 41,600 cubic foot or
smaller envelope;
``(xv) develops, designs, or produces any
other technologies in the advanced
semiconductors and microelectronics sector, the
artificial intelligence sector, the high-
performance computing and supercomputing
sector, the hypersonic missiles sector, or the
quantum information science and technology
sector that are--
``(I) defense articles or defense
services included on the United States
Munitions List set forth in the
International Traffic in Arms
Regulations under subchapter M of
chapter I of title 22, Code of Federal
Regulations;
``(II) specially designed and
prepared nuclear equipment, parts or
components, materials, software, or
technologies covered by part 810 of
title 10, Code of Federal Regulations
(relating to assistance to foreign
atomic energy activities);
``(III) nuclear facilities,
equipment, or materials covered by part
110 of title 10, Code of Federal
Regulations (relating to export and
import of nuclear equipment and
material); or
``(IV) emerging or foundational
technologies controlled pursuant to
section 1758 of the Export Control
Reform Act of 2018 (50 U.S.C. 4817); or
``(xvi) develops any artificial
intelligence system that is designed to be
exclusively used for, or which the relevant
covered foreign person intends to be used for,
any--
``(I) military end use (such as for
weapons targeting, target
identification, combat simulation,
military vehicle or weapon control,
military decision-making, weapons
design (including chemical, biological,
radiological, or nuclear weapons), or
combat system logistics and
maintenance); or
``(II) government intelligence or
mass-surveillance end (such as through
incorporation of features such as
mining text, audio, or video, image
recognition, location tracking, or
surreptitious listening devices).
``(B) Updates.--The Secretary, in consultation with
Congress, may prescribe regulations in accordance with
this title to make updates to the technical parameters
of technologies described in subparagraph (A) as
reasonably needed for national security purposes.
``(9) Secretary.--Except as otherwise provided, the term
`Secretary' means the Secretary of the Treasury.
``(10) United states person.--The term `United States
person' means--
``(A) any 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 any foreign branch of such an
entity); or
``(C) any person in the United States.''.
TITLE III--SECURITIES AND RELATED MATTERS
SEC. 301. REQUIREMENTS RELATING TO THE NON-SDN CHINESE MILITARY-
INDUSTRIAL COMPLEX COMPANIES LIST.
(a) Report.--
(1) In general.--Not later than 365 days after the date of
the enactment of this Act, and biennially thereafter for 6
years, the Secretary shall submit to the appropriate
congressional committees a report that states whether any of
the following foreign persons qualifies for inclusion on the
Non-SDN Chinese Military-Industrial Complex Companies List:
(A) Any PRC person listed on the Military End-User
List (Supplement No. 7 to part 744 of the Export
Administration Regulations).
(B) Any PRC person listed pursuant to section 1260H
of the William M. (Mac) Thornberry National Defense
Authorization Act for Fiscal Year 2021 (10 U.S.C. 113
note).
(C) Any PRC person listed on the Department of
Commerce's Entity List (Supplement No. 4 to part 744 of
the Export Administration Regulations).
(2) Process required.--To prepare the reports under
paragraph (1), the President shall establish a process under
which the Federal agencies responsible for administering the
lists described in subparagraphs (A), (B), and (C) of paragraph
(1) shall share with each other all relevant information that
led to the identification of the entities described in such
lists.
(3) Risk-based prioritization framework.--In making the
initial determinations under paragraph (1), the Secretary may
establish a risk-based prioritization framework factoring in
prioritization of entity review submitted to the Secretary by
the Federal agencies administering the lists described in
subparagraphs (A), (B), and (C) of paragraph (1).
(4) Annual reports to the appropriate congressional
committees.--The report under paragraph (1) may summarize
findings concerning entities previously reviewed pursuant to
this section and do not necessitate additional review by the
Secretary.
(5) Matters to be included.--The Secretary shall include in
the report required by paragraph (1) an overview of the
criteria required for listing on Non-SDN Chinese Military-
Industrial Complex Companies List. The heads of the Federal
agencies administering the lists described in subparagraphs
(A), (B), and (C) of paragraph (1) shall provide an overview of
the criteria for entity identification or listing on each
respective list.
(b) Requirement for Divestment.--
(1) In general.--The President shall promulgate rules that
prohibit a United States person from knowingly holding
securities of entities on the Non-SDN Chinese Military-
Industrial Complex Companies List, after the date that is 365
days after the date of enactment of this Act.
(2) Authorization.--The prohibitions on investment imposed
under paragraph (1) shall not apply to a transaction in a
security that is entered into on or before the date that is 365
days after the date of enactment of this Act by a United States
person, if such transaction is entered into solely to divest of
the security.
(c) Waiver.--
(1) In general.--The President may establish a process
under which the requirements of subsection (b) shall not apply
if the President determines to do so is necessary to protect
the national security or foreign policy objectives of the
United States.
(2) Case-by-case requirement.--Determinations under
paragraph (1) shall be issued on a case-by-case basis for each
entity on the Non-SDN Chinese Military-Industrial Complex
Companies List.
(3) Notice and briefing.--The President shall notify the
appropriate congressional committees in writing in advance of
issuing a determination under paragraph (1) and shall provide a
substantive briefing on the determination to the appropriate
congressional committees within 30 days of issuing a
determination.
(d) Definitions.--In this section:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Financial Services and the
Committee on Foreign Affairs of the House of
Representatives; and
(B) the Committee on Banking, Housing, and Urban
Affairs of the Senate.
(2) Country of concern.--The term ``country of concern''--
(A) means the People's Republic of China; and
(B) includes the Hong Kong Special Administrative
Region and the Macau Special Administrative Region.
(3) Non-SDN chinese military-industrial complex companies
list.--The term ``Non-SDN Chinese Military-Industrial Complex
Companies List'' means the list maintained by the Office of
Foreign Assets Control of the Department of the Treasury under
Executive Order 13959, as amended by Executive Order 14032 (50
U.S.C. 1701 note; relating to addressing the threat from
securities investments that finance certain companies of the
People's Republic of China), and any successor order.
(4) PRC person.--The term ``PRC person'' means a foreign
person that--
(A) is incorporated in a principal place of
business in, or is organized under the laws of, a
country of concern;
(B) is a member of the Central Committee of the
Chinese Communist Party;
(C) is the state or the government of a country of
concern, as well as any political subdivision, agency,
or instrumentality thereof; or
(D) is owned in the aggregate, directly or
indirectly, 50 percent or more by an entity or a group
of entities described in subparagraph (A), (B), or (C).
<all>