[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 3555 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 3555
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 countries of concern.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 17, 2025
Mr. Cornyn (for himself, Ms. Cortez Masto, Mr. Scott of South Carolina,
Ms. Warren, and Mr. Sullivan) 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 countries of concern.
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 Act may be cited as the ``Comprehensive
Outbound Investment National Security Act of 2025''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; Table of contents.
TITLE I--GENERAL MATTERS
Sec. 101. Secretary defined.
Sec. 102. Severability.
Sec. 103. Authorization of appropriations.
Sec. 104. Sense of Congress.
Sec. 105. Termination.
TITLE II--IMPOSITION OF SANCTIONS
Sec. 201. Imposition of sanctions.
Sec. 202. Definitions.
Sec. 203. Exception relating to importation of goods.
TITLE III--PROHIBITION AND NOTIFICATION ON INVESTMENTS RELATING TO
COVERED NATIONAL SECURITY TRANSACTIONS
Sec. 301. Prohibition and notification on investments relating to
covered national security transactions.
TITLE IV--SECURITIES AND RELATED MATTERS
Sec. 401. Requirements relating to the Non-SDN Chinese Military-
Industrial Complex Companies List.
TITLE I--GENERAL MATTERS
SEC. 101. SECRETARY DEFINED.
Except as otherwise provided, in this Act, the term ``Secretary''
means the Secretary of the Treasury.
SEC. 102. SEVERABILITY.
If any provision of this Act or any amendment made by this Act, or
the application thereof, is held invalid, the validity of the remainder
of this Act or any amendment made by this Act and the application of
such provision to other persons and circumstances shall not be affected
thereby.
SEC. 103. 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 or any amendment
made by this Act, and to administer the provisions of this Act or any
amendment made 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 or any amendment made by 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 or any amendment made
by 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 or any amendment made by this Act.
SEC. 104. SENSE OF CONGRESS.
It is the sense of Congress that--
(1) due to the fact that there are countless known and
unknown entities in countries of concern, to include the
People's Republic of China (PRC), developing dual-use strategic
technologies that benefit a foreign adversary's military
modernization efforts, surveillance states, and human rights
abuses, restricting certain United States outbound investments
into these technologies in countries of concern is necessary to
prevent harm to United States national security and foreign
policy interests; and
(2) the President should therefore exercise the authorities
granted in this Act or any amendment made by this Act to
prevent countries of concern from exploiting United States
capital to undermine United States national security and
foreign policy interests.
SEC. 105. TERMINATION.
This Act and any amendment made by this Act shall cease to have any
force or effect on the date that is seven years after the date of the
enactment of this Act.
TITLE II--IMPOSITION OF SANCTIONS
SEC. 201. IMPOSITION OF SANCTIONS.
(a) In General.--The President may impose the sanctions described
in subsection (b) with respect to any foreign person determined 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
prohibit any United States person from investing in or purchasing
significant amounts of equity or debt instruments of a foreign person
that is determined to be a covered foreign person pursuant to
subsection (a).
(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--
(1) 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
(2) 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.--
(1) In general.--Not later than one year after the date of
the enactment of this Act, and annually thereafter for seven
years, the President shall submit to the appropriate
congressional committees a report that states whether any
foreign person on the Non-SDN Chinese Military-Industrial
Complex Companies List is a covered foreign person.
(2) Form.--The report required by paragraph (1) shall be
submitted in unclassified form, but may include a classified
annex.
(g) 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.
(h) Rule of Construction.--Nothing in this section may be construed
to limit the authority of the President to designate foreign persons
for the imposition of sanctions pursuant to any other provision of
Federal law, including the International Emergency Economic Powers Act
(50 U.S.C. 1701 et seq.).
SEC. 202. 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''
means the People's Republic of China, including the Hong Kong
and Macau Special Administrative Regions.
(3) Covered foreign person.--The term ``covered foreign
person'' means a foreign person--
(A) that is incorporated in, has a principal place
of business in, or is organized under the laws of a
country of concern;
(B) that is a member of the Central Committee of
the Chinese Communist Party or member of the political
leadership of a country of concern;
(C) that is the state or the government of a
country of concern, as well as any political
subdivision, agency, or instrumentality thereof;
(D) that is subject to the direction or control of
any entity described in subparagraphs (A) through (C);
or
(E) that is owned in the aggregate, directly or
indirectly, 50 percent or more by an entity or a group
of entities described in subparagraphs (A) through (C);
and
(F) 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 that is not a United States person.
(5) Knowingly.--The term ``knowingly'', with respect to
conduct, a circumstance, or a result, means that a person has
actual knowledge, or should have known, of the conduct, the
circumstance, or the result.
(6) 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.
(7) Person.--The term ``person'' means an individual or
entity.
(8) 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.
SEC. 203. EXCEPTION RELATING TO IMPORTATION OF GOODS.
(a) In General.--The authorities and requirements to impose
sanctions authorized under this Act shall not include the authority or
requirement to impose sanctions on the importation of goods.
(b) Good Defined.--In this section, the term ``good'' means any
article, natural or manmade substance, material, supply or manufactured
product, including inspection and test equipment, and excluding
technical data.
TITLE III--PROHIBITION AND NOTIFICATION ON INVESTMENTS RELATING TO
COVERED NATIONAL SECURITY TRANSACTIONS
SEC. 301. 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,
including its controlled foreign entities, from knowingly engaging in a
covered national security transaction in any prohibited technology.
``(b) Evasion.--Any action 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) Exemptions.--
``(1) National interest exemption.--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, or delegated to
the Secretary, in coordination with the Secretary of Commerce,
the Secretary of State, and, as appropriate, the heads of other
relevant Federal departments and agencies, to be in the
national interest of the United States.
``(2) Intelligence exemption.--Regulations issued under
subsection (e) shall not apply to any authorized intelligence
activities of the United States.
``(d) Congressional Notification.--The Secretary shall--
``(1) notify the appropriate congressional committees not
later than five business days after issuing an exemption under
subsection (c); and
``(2) include in such notification an identification of the
national interest justifying the use of the exemption, subject
to appropriate confidentiality and classification requirements.
``(e) Regulations.--
``(1) In general.--The Secretary, in consultation with the
Secretary of Commerce, the Secretary of State and, as
appropriate, the heads of other relevant Federal departments
and agencies, may issue or update existing regulations to carry
out this section subject to public notice and comment in
accordance with subchapter II of chapter 5 and chapter 7 of
title 5, United States Code, and not subject to the
requirements of section 709. The regulations issued pursuant to
this paragraph shall, as necessary, amend, terminate,
supersede, revoke, or streamline existing requirements in part
850 of title 31, Code of Federal Regulations (the Outbound
Investment Rule) and shall provide a reasonable timeframe for
compliance.
``(2) Non-binding feedback.--
``(A) In general.--The regulations issued under
paragraph (1) shall include a process under which a
person can request to receive non-binding feedback on a
confidential basis, or as anonymized guidance to the
public, 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; opportunity to cure.--
``(A) In general.--The regulations issued under
paragraph (1) shall account for whether a United States
person has self-identified and self-disclosed 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) Low-burden regulations.--In issuing regulations under
paragraph (1), the Secretary should 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.
``(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.
``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 itself or whose controlled foreign entity
knowingly 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, the Secretary of State, and, as
appropriate, the heads of other relevant Federal departments
and agencies, shall issue regulations to carry out this section
subject to public notice and comment in accordance with
subchapter II of chapter 5 and chapter 7 of title 5, United
States Code, and not subject to the requirements of section
709. The regulations issued pursuant to this paragraph shall as
necessary, amend, terminate, supersede, revoke, or streamline
existing requirements in part 850 of title 31, Code of Federal
Regulations (the Outbound Investment Rule) and shall provide a
reasonable timeframe for compliance.
``(2) Low-burden regulations.--In issuing regulations under
paragraph (1), the Secretary should 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.
``(3) 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.
``(4) Completeness of notification.--
``(A) In general.--The Secretary shall, upon
receipt of a notification under subsection (a),
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.
``(5) Identification of non-notified activity.--The
Secretary 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) 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 18 months after the date of
enactment of this title, and not less frequently than annually
thereafter, the Secretary, in consultation with the Secretary of
Commerce and, as appropriate, the heads of other relevant Federal
departments and agencies, shall submit to the appropriate congressional
committees a report, subject to appropriate confidentiality and
classification requirements, that--
``(1) lists all enforcement actions taken subject to the
existing regulations and regulations issued under section
801(e) and 802(b) 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;
``(C) the covered foreign person; and
``(D) the relevant United States person;
``(2) provides an assessment of the definition of the term
`prohibited technology' under existing regulations or
regulations issued under section 801(e) or 802(b) by--
``(A) identifying additional technologies 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, determined under
existing regulations or regulations issued pursuant to
801(e) 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) describing any removal of technologies from
the category of prohibited technology under existing
regulations or regulations issued under section 801(e)
during the reporting period 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 existing
regulations or regulations issued 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 of 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, by 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
United States dependence on countries of concern
regarding those technologies; and
``(C) the continuation, expansion, or modification
of the implementation and administration of this title.
``(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, or their designee, shall
each provide to the Committee on Banking, Housing, and Urban Affairs of
the Senate and the Committees on Foreign Affairs and 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 1 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 and notification requirement 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 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 regulations implementing
enactment of this title, the Secretary, in coordination 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 and
notification requirements pursuant to this title, for the
exclusive purpose of preventing the development 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
regulations implementing enactment of this title, and annually
thereafter for four years, the Secretary shall submit to the
appropriate congressional committees a report, subject to the
appropriate confidentiality and classification requirements, 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 that are
either engaged in a prohibited technology or a notifiable technology
pursuant to this title.
``(b) Modification Process.--The Secretary, in consultation with
the Secretary of Commerce, is authorized to establish a mechanism for a
covered foreign person to petition for their removal from or inclusion
in the publicly accessible, non-exhaustive database described in (a).
``(c) 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 or notifiable technology and should be included
in the database described in subsection (a), if any.
``(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, including the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.), or any other authority of
the President or the Congress under the Constitution of the United
States.
``SEC. 807. PENALTIES.
``(a) In General.--The regulations issued under section 801 or 802
shall provide for the imposition of civil penalties described in
subsection (b).
``(b) Penalties Described.--
``(1) Unlawful acts.--It shall be unlawful for a person to
violate, attempt to violate, conspire to violate, or cause a
violation of any order, regulation, notification requirement,
or prohibition issued under this title.
``(2) Civil penalty.--The Secretary may impose civil
penalties on any person who commits an unlawful act described
in paragraph (1) in amounts equivalent to amounts provided for
under section 206(b) of the International Emergency Economic
Powers Act (50 U.S.C. 1705(b)) for violations under that Act.
``(3) Divestment.--The Secretary may compel the divestment
of a covered national security transaction in a prohibited
technology determined to be in violation of section 801(a) or
regulations issued thereunder.
``(4) Relief.--The President may direct the Attorney
General of the United States to seek appropriate relief,
including divestment relief for violations of the prohibition
set forth in subsection 801(a), in the district courts of the
United States, in order to implement and enforce this title.
``SEC. 808. EXEMPTION FROM DISCLOSURE.
``(a) In General.--Except as provided in subsection (b), any
information or documentary material filed with the Secretary or the
Secretary's designee pursuant to this title 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.
``(b) Exceptions.--Subsection (a) shall not prohibit the disclosure
of the following, subject to appropriate confidentiality and
classification requirements:
``(1) Information relevant to any administrative or
judicial action or proceeding.
``(2) Information to Congress or any duly authorized
committee or subcommittee of Congress.
``(3) 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.
``(4) Identity of a covered foreign person in the public
database described in section 805.
``(5) Information that the parties have consented to be
disclosed to third parties.
``(6) Information gathered by the Secretary or the
Secretary's designee where the disclosure is determined to be
in the national security interest, which may include
publication of anonymized data.
``SEC. 809. DEFINITIONS.
``In this title:
``(1) Appropriate congressional committees.--Except as
provided in section 804(d), the term `appropriate congressional
committees' means--
``(A) the Committee on Financial Services, the
Committee on Foreign Affairs, 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'
means--
``(A) the People's Republic of China, including the
Hong Kong and Macau Special Administrative Regions;
``(B) the Republic of Cuba;
``(C) the Islamic Republic of Iran;
``(D) the Democratic People's Republic of Korea;
``(E) the Russian Federation; and
``(F) the Bolivarian Republic of Venezuela under
the regime of Nicolas Maduro Moros.
``(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 or is a member of the political
leadership of a country of concern;
``(C) is subject to the direction or control of a
country of concern, as defined by regulation, 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 a United
States person's direct or indirect--
``(i) acquisition of an equity interest or
contingent equity interest in a covered foreign
person that the United States person knows at
the time of the acquisition is a covered
foreign person;
``(ii) provision of a loan or similar debt
financing arrangement to a covered foreign
person that the United States person knows at
the time of the provision is a covered foreign
person, where such debt financing affords or
will afford the United States person an
interest in profits of the covered foreign
person, the right to appoint members of the
board of directors (or equivalent) of the
covered foreign person, or other comparable
financial or governance rights characteristic
of an equity investment but not typical of a
loan;
``(iii) entrance by such United States
person into a joint venture, wherever located,
that is formed with a person of a country of
concern, and that the subject United States
person knows at the time of entrance into the
joint venture that the joint venture will
engage, or plans to engage, in a prohibited
technology or notifiable technology;
``(iv) 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) acquisition, leasing, or other
development of operations, land, property, or
other assets in a country of concern that the
United States person knows at the time of such
acquisition, leasing, or other development will
result in, or that the United States person
plans 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 or notifiable technology;
``(vi) knowingly directing prohibited
transactions or notifiable 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;
``(vii) acquisition of a limited partner or
equivalent interest in a venture capital fund,
private equity fund, fund of funds, or other
pooled investment fund (in each case where the
fund is not a United States person) that the
United States person has knowledge at the time
of the acquisition likely will invest in a
person of a country of concern that is in one
of the notifiable technology or prohibited
technology sectors, and such fund undertakes a
transaction that would be a covered national
security transaction if undertaken by a United
States person; or
``(viii) any other transaction identified
by the Secretary, in consultation with the
appropriate congressional committees and
subject to public notice and comment in
accordance with subchapter II of chapter 5 and
chapter 7 of title 5, United States Code, and
not subject to the requirements of section 709,
that is contributing to the military,
intelligence, surveillance, or cyber-enabled
capabilities of a country of concern.
``(B) Exceptions and clarifications.--Subject to
regulations prescribed 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, or, if the
Secretary chooses to include it as an
exception from a covered national
security transaction, in a security
issued by a non-United States
investment company that is registered
with a foreign regulator with
comparable oversight standards and
regulatory jurisdiction to the
Securities and Exchange Commission as
determined by the Secretary of
Treasury;
``(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 a de
minimis amount, as determined
by the Secretary, 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 the effective date of
the regulations implementing this title;
``(vii) a transaction secondary to a
covered national security transaction,
including--
``(I) contractual arrangements (not
including contractual arrangements for
technology transfer or technical
knowledge transfer) 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
including, but not limited to, the
temporary acquisition of an equity
interest for the sole purpose of
facilitating 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,
subject to regulations prescribed by the Secretary--
``(i) the processing, settling, clearing,
or sending of payments and cash transactions;
``(ii) underwriting services, including the
temporary acquisition of an equity interest for
the sole purpose of facilitating 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' has the
meaning given that term in regulations prescribed in accordance
with this title.
``(6) Knowledge; know.--The terms `knowledge' or `know'
mean--
``(A) actual knowledge that a fact or circumstance
exists or is substantially certain to occur;
``(B) an awareness of a high probability of a fact
or circumstance's existence or future occurrence; or
``(C) reason to know of a fact or circumstance's
existence.
``(7) Notifiable technology.--
``(A) In general.--Subject to the regulations
prescribed in accordance with this title, the term
`notifiable technology' means a technology within the
following areas not already captured by the technical
thresholds specified by any regulations issued in
accordance with section 801:
``(i) Semiconductor technology and
microelectronics.
``(ii) Artificial intelligence systems.
``(iii) Quantum information technologies.
``(iv) High-performance computing and
supercomputing.
``(v) Hypersonic systems.
``(B) Updates.--The Secretary, in consultation with
the appropriate congressional committees and subject to
notice and comment in accordance with subchapter II of
chapter 5 and chapter 7 of title 5, United States Code,
and not subject to the requirements of section 709, may
prescribe regulations in accordance with this title
to--
``(i) define the technical parameters of
technologies described in subparagraph (A), as
reasonably needed for national security
purposes; or
``(ii) to add and define categories to the
list in subparagraph (A) that enable the
military, intelligence, surveillance, or cyber-
enabled capabilities of a country of concern.
``(8) 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.
``(9) Person.--The term `person' includes an individual,
corporation, partnership, association, or any other organized
group of persons, or legal successor or representative thereof,
or any State or local government or agency thereof.
``(10) Prohibited technology.--
``(A) In general.--Subject to the regulations
prescribed in accordance with this title, the term
`prohibited technology' means a technology within the
following areas, as specified by the regulations:
``(i) Advanced semiconductor technology and
microelectronics.
``(ii) Artificial intelligence systems.
``(iii) Quantum information technologies.
``(iv) High-performance computing and
supercomputing.
``(v) Hypersonic systems.
``(B) Updates.--The Secretary, in consultation with
the appropriate congressional committees and subject to
notice and comment in accordance with subchapter II of
chapter 5 and chapter 7 of title 5, United States Code,
and not subject to the requirements of section 709, may
prescribe regulations in accordance with this title
to--
``(i) define the technical parameters of
technologies described in subparagraph (A), as
reasonably needed for national security
purposes; or
``(ii) to add and define categories to the
list in subparagraph (A) that enable the
military, intelligence, surveillance, or cyber-
enabled capabilities of a country of concern.
``(11) Secretary.--Except as otherwise provided, the term
`Secretary' means the Secretary of the Treasury.
``(12) 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 IV--SECURITIES AND RELATED MATTERS
SEC. 401. REQUIREMENTS RELATING TO THE NON-SDN CHINESE MILITARY-
INDUSTRIAL COMPLEX COMPANIES LIST.
(a) Report.--
(1) In general.--Not later than two years after the date of
the enactment of this Act, and biennially thereafter for six
years, the President 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).
(D) Any PRC person listed on the Federal
Communications Commission's Covered List pursuant to
the Secure and Trusted Communications Networks Act of
2019 (47 U.S.C. 1601).
(E) Any PRC person listed on the Uyghur Forced
Labor Prevention Act Entity List pursuant to the Act
entitled ``An Act to ensure that goods made with forced
labor in the Xinjiang Uyghur Autonomous Region of the
People's Republic of China do not enter the United
States market, and for other purposes'', approved
December 23, 2021 (Public Law 117-78; 22 U.S.C. 6901
note) (commonly referred to as the ``Uyghur Forced
Labor Prevention Act'').
(2) Process required.--To prepare the reports required by
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 that 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 the 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 to the
Secretary for use in the report an overview of the criteria for
entity identification or listing on each respective list.
(b) 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).
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