Text: S.945 — 116th Congress (2019-2020)All Information (Except Text)

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Public Law No: 116-222 (12/18/2020)

 
[116th Congress Public Law 222]
[From the U.S. Government Publishing Office]



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Public Law 116-222
116th Congress

                                 An Act


 
 To amend the Sarbanes-Oxley Act of 2002 to require certain issuers to 
disclose to the Securities and Exchange Commission information regarding 
    foreign jurisdictions that prevent the Public Company Accounting 
  Oversight Board from performing inspections under that Act, and for 
          other purposes. <<NOTE: Dec. 18, 2020 -  [S. 945]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Holding Foreign 
Companies Accountable Act.>> 
SECTION 1. <<NOTE: 15 USC 7201 note.>>  SHORT TITLE.

    This Act may be cited as the ``Holding Foreign Companies Accountable 
Act''.
SEC. 2. DISCLOSURE REQUIREMENT.

    Section 104 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7214) is 
amended by adding at the end the following:
    ``(i) Disclosure Regarding Foreign Jurisdictions That Prevent 
Inspections.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `covered issuer' means an issuer that 
                is required to file reports under section 13 or 15(d) of 
                the Securities Exchange Act of 1934 (15 U.S.C. 78m, 
                78o(d)); and
                    ``(B) the term `non-inspection year' means, with 
                respect to a covered issuer, a year--
                          ``(i) during which the Commission identifies 
                      the covered issuer under paragraph (2)(A) with 
                      respect to every report described in subparagraph 
                      (A) filed by the covered issuer during that year; 
                      and
                          ``(ii) that begins after the date of enactment 
                      of this subsection.
            ``(2) Disclosure to commission.--The Commission shall--
                    ``(A) identify each covered issuer that, with 
                respect to the preparation of the audit report on the 
                financial statement of the covered issuer that is 
                included in a report described in paragraph (1)(A) filed 
                by the covered issuer, retains a registered public 
                accounting firm that has a branch or office that--
                          ``(i) is located in a foreign jurisdiction; 
                      and
                          ``(ii) the Board is unable to inspect or 
                      investigate completely because of a position taken 
                      by an authority in the foreign jurisdiction 
                      described in clause (i), as determined by the 
                      Board; and
                    ``(B) <<NOTE: Records.>>  require each covered 
                issuer identified under subparagraph (A) to, in 
                accordance with the rules issued by the Commission under 
                paragraph (4), submit to the

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                Commission documentation that establishes that the 
                covered issuer is not owned or controlled by a 
                governmental entity in the foreign jurisdiction 
                described in subparagraph (A)(i).
            ``(3) <<NOTE: Determinations. Certifications.>>  Trading 
        prohibition after 3 years of non-inspections.--
                    ``(A) In general.--If the Commission determines that 
                a covered issuer has 3 consecutive non-inspection years, 
                the Commission shall prohibit the securities of the 
                covered issuer from being traded--
                          ``(i) on a national securities exchange; or
                          ``(ii) through any other method that is within 
                      the jurisdiction of the Commission to regulate, 
                      including through the method of trading that is 
                      commonly referred to as the `over-the-counter' 
                      trading of securities.
                    ``(B) Removal of initial prohibition.--If, after the 
                Commission imposes a prohibition on a covered issuer 
                under subparagraph (A), the covered issuer certifies to 
                the Commission that the covered issuer has retained a 
                registered public accounting firm that the Board has 
                inspected under this section to the satisfaction of the 
                Commission, the Commission shall end that prohibition.
                    ``(C) Recurrence of non-inspection years.--If, after 
                the Commission ends a prohibition under subparagraph (B) 
                or (D) with respect to a covered issuer, the Commission 
                determines that the covered issuer has a non-inspection 
                year, the Commission shall prohibit the securities of 
                the covered issuer from being traded--
                          ``(i) on a national securities exchange; or
                          ``(ii) through any other method that is within 
                      the jurisdiction of the Commission to regulate, 
                      including through the method of trading that is 
                      commonly referred to as the `over-the-counter' 
                      trading of securities.
                    ``(D) <<NOTE: Time period.>>  Removal of subsequent 
                prohibition.--If, after the end of the 5-year period 
                beginning on the date on which the Commission imposes a 
                prohibition on a covered issuer under subparagraph (C), 
                the covered issuer certifies to the Commission that the 
                covered issuer will retain a registered public 
                accounting firm that the Board is able to inspect under 
                this section, the Commission shall end that prohibition.
            ``(4) <<NOTE: Deadline.>>  Rules.--Not later than 90 days 
        after the date of enactment of this subsection, the Commission 
        shall issue rules that establish the manner and form in which a 
        covered issuer shall make a submission required under paragraph 
        (2)(B).''.
SEC. 3. <<NOTE: 15 USC 7214a.>>  ADDITIONAL DISCLOSURE.

    (a) Definitions.--In this section--
            (1) the term ``audit report'' has the meaning given the term 
        in section 2(a) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
        7201(a));
            (2) the term ``Commission'' means the Securities and 
        Exchange Commission;
            (3) the term ``covered form''--
                    (A) means--

[[Page 134 STAT. 1065]]

                          (i) the form described in section 249.310 of 
                      title 17, Code of Federal Regulations, or any 
                      successor regulation; and
                          (ii) the form described in section 249.220f of 
                      title 17, Code of Federal Regulations, or any 
                      successor regulation; and
                    (B) includes a form that--
                          (i) is the equivalent of, or substantially 
                      similar to, the form described in clause (i) or 
                      (ii) of subparagraph (A); and
                          (ii) a foreign issuer files with the 
                      Commission under the Securities Exchange Act of 
                      1934 (15 U.S.C. 78a et seq.) or rules issued under 
                      that Act;
            (4) the terms ``covered issuer'' and ``non-inspection year'' 
        have the meanings given the terms in subsection (i)(1) of 
        section 104 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7214), 
        as added by section 2 of this Act; and
            (5) the term ``foreign issuer'' has the meaning given the 
        term in section 240.3b-4 of title 17, Code of Federal 
        Regulations, or any successor regulation.

    (b) Requirement.--Each covered issuer that is a foreign issuer and 
for which, during a non-inspection year with respect to the covered 
issuer, a registered public accounting firm described in subsection 
(i)(2)(A) of section 104 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7214), as added by section 2 of this Act, has prepared an audit report 
shall disclose in each covered form filed by that issuer that covers 
such a non-inspection year--
            (1) that, during the period covered by the covered form, 
        such a registered public accounting firm has prepared an audit 
        report for the issuer;
            (2) the percentage of the shares of the issuer owned by 
        governmental entities in the foreign jurisdiction in which the 
        issuer is incorporated or otherwise organized;
            (3) whether governmental entities in the applicable foreign 
        jurisdiction with respect to that registered public accounting 
        firm have a controlling financial interest with respect to the 
        issuer;
            (4) the name of each official of the Chinese Communist Party 
        who is a member of the board of directors of--
                    (A) the issuer; or
                    (B) the operating entity with respect to the issuer; 
                and
            (5) whether the articles of incorporation of the issuer (or 
        equivalent organizing document) contains any charter of the

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        Chinese Communist Party, including the text of any such charter.

    Approved December 18, 2020.

LEGISLATIVE HISTORY--S. 945:
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CONGRESSIONAL RECORD, Vol. 166 (2020):
            May 20, considered and passed Senate.
            Dec. 2, considered and passed House.

                                  <all>

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