[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4836 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 4836

  To provide for the application of certain measures to the People's 
Republic of China in response to the illegal sale, transfer, or misuse 
  of certain controlled goods, services, or technology, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 12, 2000

 Mr. Pallone introduced the following bill; which was referred to the 
Committee on International Relations, and in addition to the Committee 
on Rules, for a period to be subsequently determined by the Speaker, in 
   each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
  To provide for the application of certain measures to the People's 
Republic of China in response to the illegal sale, transfer, or misuse 
  of certain controlled goods, services, or technology, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``China Nonproliferation Act''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Advanced conventional weapons.--The term ``advanced 
        conventional weapons'' includes--
                    (A) long-range precision-guided munitions, fuel air 
                explosives, cruise missiles, low observability aircraft 
                or vessels, other radar evading aircraft or vessels, 
                advanced military aircraft, military satellites, 
                electromagnetic weapons, and laser weapons;
                    (B) advanced command, control, and communications 
                systems, electronic warfare systems, and intelligence 
                collection systems; and
                    (C) such other items or systems as the President 
                may, by regulation, determine necessary for purposes of 
                this title.
            (2) Goods and technology.--The terms ``goods'' and 
        ``technology'' mean--
                    (A) any article, natural or manmade substance, 
                material, supply, or manufactured product, including 
                inspection and test equipment; and
                    (B) any information and know-how (whether in 
                tangible form, such as models, prototypes, drawings, 
                sketches, diagrams, blueprints, or manuals, or in 
                intangible form, such as training or technical 
                services) that can be used to design, produce, 
                manufacture, utilize, improve the performance of or 
                reconstruct goods, including computer software and 
                technical data.
            (3) Person.--The term ``person'' means--
                    (A) any United States or People's Republic of China 
                individual, partnership, corporation, or other form of 
                association, or any of their successor entities, 
                parents, or subsidiaries;
                    (B) any other nongovernmental entity, organization, 
                or group, that is organized under the laws of the 
                United States or the People's Republic of China or has 
                its principal place of business in the United States or 
                the People's Republic of China;
                    (C) any governmental entity of the People's 
                Republic of China operating as a business enterprise; 
                and
                    (D) any successor, subunit, or subsidiary of any 
                entity described in subparagraphs (A) through (C).
            (4) Proliferation activity.--The term ``proliferation 
        activity'' means the activity described in section 3(a)(1).
            (5) State-owned enterprise of the people's republic of 
        china.--
                    (A) In general.--The term ``state-owned enterprise 
                of the People's Republic of China'' means a person who 
                is affiliated with or wholly owned, controlled, or 
                subsidized by the Government of the People's Republic 
                of China or the People's Liberation Army and whose 
                means of production, products, and revenues are owned 
                or controlled by a central or provincial government 
                authority. A person shall be considered to be state-
                owned if--
                            (i) the person's assets are primarily owned 
                        by a central or provincial government 
                        authority;
                            (ii) a substantial proportion of the 
                        person's profits are required to be submitted 
                        to a central or provincial government 
                        authority;
                            (iii) the person's production, purchases of 
                        inputs, and sales of output, in whole or in 
                        part, are subject to state, sectoral, or 
                        regional plans; or
                            (iv) a license issued by a government 
                        authority classifies the person as state-owned.
                    (B) Exception.--Any person that--
                            (i) is a qualified foreign joint venture or 
                        is licensed by a governmental authority as a 
                        collective, cooperative, or private enterprise; 
                        or
                            (ii) is wholly owned by a foreign person,
                shall not be considered to be state-owned.
                    (C) Qualified foreign joint venture.--The term 
                ``qualified foreign joint venture'' means any person--
                            (i) which is registered and licensed in the 
                        agency or department of the Government of the 
                        People's Republic of China concerned with 
                        foreign economic relations and trade as an 
                        equity, cooperative, contractual joint venture, 
                        or joint stock company with foreign investment;
                            (ii) in which the foreign investor partner 
                        and a person of the People's Republic of China 
                        share profits and losses and jointly manage the 
                        venture;
                            (iii) in which the foreign investor partner 
                        holds or controls at least 25 percent of the 
                        investment and the foreign investor partner is 
                        not substantially owned or controlled by a 
state-owned enterprise of the People's Republic of China;
                            (iv) in which the foreign investor partner 
                        is not a person of a country the government of 
                        which the Secretary of State has determined 
                        under section 6(j) of the Export Administration 
                        Act of 1979 (50 U.S.C. App. 2405(j)) to have 
                        repeatedly provided support for acts of 
                        international terrorism; and
                            (v) which does not use state-owned 
                        enterprises of the People's Republic of China 
                        to export its goods or services.
            (6) United states assistance.--The term ``United States 
        assistance'' means--
                    (A) any assistance under the Foreign Assistance Act 
                of 1961, other than urgent humanitarian assistance or 
                medicine;
                    (B) sales and assistance under the Arms Export 
                Control Act;
                    (C) financing by the Commodity Credit Corporation 
                for export sales of agricultural commodities; and
                    (D) financing under the Export-Import Bank Act.

SEC. 3. REPORTS ON PROLIFERATION BY PEOPLE'S REPUBLIC OF CHINA.

    (a) Reports.--
            (1) In general.--The President shall, at the times 
        specified in subsection (b), submit to the Committee on 
        International Relations of the House of Representatives, the 
        Committee on Foreign Relations of the Senate, the Committee on 
        Armed Services of the Senate, the Select Committee on 
        Intelligence of the Senate, and the Committee on Governmental 
        Affairs of the Senate, a report identifying every person with 
        respect to whom there is credible information indicating that 
        that person, on or after January 1, 2000, transferred, 
        retransferred, sold, misused, or diverted from, or within, the 
        People's Republic of China to a foreign person or national of 
        the People's Republic of China involved in the development or 
        acquisition of nuclear, chemical, or biological weapons or 
        ballistic or cruise missiles--
                    (A) goods, services, or technology listed on--
                            (i) the Nuclear Suppliers Group Guidelines 
                        for the Export of Nuclear Material, Equipment 
                        and Technology (published by the International 
                        Atomic Energy Agency as Information Circular 
                        INFCIRC/254/Rev. 3/Part 1, and subsequent 
                        revisions) and Guidelines for Transfers of 
                        Nuclear-Related Dual-Use Equipment, Material, 
                        and Related Technology (published by the 
                        International Atomic Energy Agency as 
                        Information Circular INFCIRC/254/Rev. 3/ Part 
                        2, and subsequent revisions);
                            (ii) the Missile Technology Control Regime 
                        Equipment and Technology Annex of June 11, 
                        1996, and subsequent revisions;
                            (iii) the lists of items and substances 
                        relating to biological and chemical weapons the 
                        export of which is controlled by the Australia 
                        Group;
                            (iv) the Schedules of the Convention on the 
                        Prohibition of the Development, Production, 
                        Stockpiling and Use of Chemical Weapons and on 
                        Their Destruction, including chemicals, 
                        precursors, and other substances; or
                            (v) the Wassenaar Arrangement list of Dual 
                        Use Goods and Technologies and Munitions list 
                        of July 12, 1996, and subsequent revisions; or
                    (B) goods, services, or technology not listed on 
                any list identified in subparagraph (A) but which 
                nevertheless would be, if the goods, services, or 
                technology were United States goods, services, or 
                technology, prohibited or controlled for export to the 
                People's Republic of China, or any tier IV countries as 
                defined by the Bureau of Export Administration of the 
                Department of Commerce, and that have the potential to 
                make a contribution to the development, improvement, or 
                production of nuclear, biological, or chemical weapons, 
                or of ballistic or cruise missile systems, or advanced 
                conventional weapons or munitions.
            (2) Action by persons identified.--The President shall 
        include in the report information on any action taken by a 
        person identified in a prior annual report under this 
        subsection that establishes that the person has discontinued, 
        rectified, or mitigated a prior proliferation activity 
        identified under this Act.
            (3) Action by president.--The President shall include in 
        the report information on actions taken by the President under 
        sections 4 and 5, in response to proliferation activities 
        conducted by persons identified in this section. The President 
        shall include in the report information on any determinations 
        made under section 7. If the President fails to exercise the 
        authority under sections 4 and 5, or if the President makes a 
        determination under section 7, with respect to a person 
        identified in a report submitted pursuant to this section, the 
        President shall include that information and the reasons 
        therefore in the report required under this section.
            (4) Other information.--In addition to the information 
        required by paragraphs (1) through (3), the President shall 
        include in the report information on--
                    (A) noncompliance with any international 
                nonproliferation treaties, agreements, arrangements, or 
                commitments (verbal, written, or otherwise) by the 
                People's Republic of China, including the Missile 
                Technology Control Regime and the annexes to that 
                Regime;
                    (B) noncompliance with United States export control 
                laws, Executive orders, regulations, or export license 
                conditions by the People's Republic of China;
                    (C) the performance of the Department of Commerce 
                in licensing, regulating, and controlling the export of 
                dual-use technology to the People's Republic of China, 
                including the number and type of post-shipment 
                verifications conducted and enforcement actions taken;
                    (D) the threats to the security interests of the 
                United States, or the security interests of its allies 
                resulting from--
                            (i) proliferation activities on the part of 
                        the People's Republic of China or persons 
                        identified in reports submitted under this 
                        section;
                            (ii) the transfer or sale to the Government 
                        of, or persons within the People's Republic of 
                        China of dual-use technologies and goods listed 
                        on the Commerce Control List;
                            (iii) the misuse or diversion by the 
                        People's Republic of China of dual-use 
                        technology; and
                            (iv) the transfer or sale of goods, 
                        services, or technology identified by the 
                        Director of Central Intelligence as having a 
                        significant potential to make a contribution to 
                        the development, improvement, or production of 
                        nuclear, biological, or chemical weapons, or of 
ballistic or cruise missile systems, or advanced conventional weapons 
or munitions; and
                    (E) transfers to persons of the People's Republic 
                of China of technology under arms control and 
                nonproliferation agreements and opportunities for the 
                People's Republic of China to engage in proliferation 
                activities under agreements such as Nuclear 
                Nonproliferation Treaty, Chemical Weapons Convention, 
                Comprehensive Test Ban Treaty, and Biological Weapons 
                Convention.
    (b) Timing of Reports.--The reports required under subsection (a) 
shall be submitted no later than 90 days after the date of enactment of 
this Act, and on June 1 of each year thereafter.
    (c) Exceptions.--Any person who--
            (1) has engaged in the transfer, sale, or misuse of any 
        goods, services, or technology on behalf of, or in concert 
        with, the Government of the United States; or
            (2) has transferred, retransferred, or sold such goods, 
        services, or technology in a manner fully consistent with all 
        applicable international nonproliferation treaties, agreements, 
        and commitments with respect to which the People's Republic of 
        China is a party,
is not required to be identified on account of that transfer in any 
report submitted under this section, except to the degree that credible 
information indicates that the particular transfer, sale, or misuse may 
have continued, or been larger, more significant, or different in 
nature than permitted on behalf of the Government of the United States 
or under such international nonproliferation treaty or agreement.
    (d) Submission in Classified Form.--Reports shall be submitted in 
unclassified form, with classified annexes as necessary.

SEC. 4. APPLICATION OF MANDATORY MEASURES TO CERTAIN PERSONS.

    (a) Application of Measures.--Subject to section 7, the President 
shall apply with respect to each person identified in a report 
submitted pursuant to section 3(a), for such period of time as the 
President may determine but not less than one year, all of the measures 
described in subsection (b).
    (b) Description of Measures.--The measures referred to in 
subsection (a) are the following:
            (1) Executive order no. 12938 prohibitions.--Imposition of 
        the measures set forth in subsections (b) and (c) of section 4 
        of Executive Order No. 12938.
            (2) Arms export.--Prohibition on United States Government 
        transfers or sales to such person of any item on the United 
        States Munitions List as in effect on August 8, 1995, and 
        termination of all sales and after-sale servicing to such 
        person of any defense articles, defense services, or design and 
        construction services under the Arms Export Control Act.
            (3) Dual-use export prohibition.--Denial of licenses, 
        suspension of existing licenses, and termination of all 
        transfers or sales and after-sale servicing for the transfer to 
        such person of any item the export of which is controlled under 
        the Export Administration Act of 1979 (as extended pursuant to 
        the International Emergency Economic Powers Act) or the Export 
        Administration regulations.
            (4) Procurement sanction.--Prohibition on the United States 
        Government procuring, or entering into any contract for the 
        procurement of, any goods or services from such person.
            (5) United states assistance prohibition.--Prohibition on 
        the provision of United States assistance in the form of 
        grants, loans, credits, guarantees, or otherwise, to such 
        person.
            (6) Suspension of agreements.--Immediate suspension of any 
        agreements or efforts for the co-development or co-production 
        with such person of any item on the United States Munitions 
        List.
    (c) Effective Date of Measures.--Each measure imposed pursuant to 
subsection (a) shall take effect with respect to such person 30 days 
after the date that the report identifying the person is submitted to 
Congress.
    (d) Publication in Federal Register.--Notice of the imposition of 
the measure described in subsection (b) to a person identified pursuant 
to section 3(a) shall be published in the Federal Register, unless the 
President determines that doing so would threaten the national security 
or intelligence interests of the United States.
    (e) Duration of Measures.--Each measure imposed under this section 
shall apply for a period of at least 12 months following the imposition 
of the measure and shall cease to apply only if the President 
determines and certifies to Congress that--
            (1) credible information indicates that the person with 
        respect to whom the determination was made under section 3(a) 
        has ceased the activities for which the measure was imposed;
            (2) credible information indicates that the person has 
        taken reasonable steps to rectify the violation; and
            (3) the President has received reasonable assurances from 
        the person that such person will not engage in similar 
        activities in the future.

SEC. 5. APPLICATION OF ADDITIONAL MEASURES DIRECTED AT THE GOVERNMENT 
              OF THE PEOPLE'S REPUBLIC OF CHINA.

    (a) In General.--In addition to the mandatory measures described in 
section 4 applied against persons identified pursuant to section 3(a), 
the President shall apply additional measures as follows against the 
People's Republic of China:
            (1) Tier 1 measures.--The President shall apply one or more 
        of the measures listed in tier 1 that are not in effect under 
        this or any other Act or Executive order with respect to the 
        People's Republic of China in conjunction with, and at the same 
        time, as the mandatory measures applied against the person 
        under section 4.
            (2) Tier 2 measures.--If, one year after the measures 
        described in section 4 are imposed, the proliferation 
        activities upon which the measures were based are not rectified 
        as described in section 4(e), or the person has engaged in 
        additional proliferation activities, the President shall 
        continue to apply the measures described in section 4, any tier 
        1 measure in effect, and shall also impose one or more tier 2 
        measures not in effect under this or any other Act or Executive 
        order with respect to the People's Republic of China.
            (3) Tier 3 measures.--If 2 years after the measures 
        described in section 4 are imposed, the proliferation 
        activities upon which the measures were based are not rectified 
        as described in section 4(e), or the person has engaged in 
        additional proliferation activities, the President shall 
        continue to apply the measures described in section 4, any tier 
        1 or tier 2 measures in effect, and shall also impose one or 
more tier 3 measures not in effect under this or any other Act or 
Executive order with respect to the People's Republic of China.
    (b) Definition of Tier 1, Tier 2, and Tier 3 Measures.--
            (1) Tier 1 measure.--The term ``tier 1 measure'' includes 
        any or all of the following:
                    (A) Suspension of all military-to-military contacts 
                and exchanges between the People's Republic of China 
                and the United States.
                    (B) Suspension of all United States assistance to 
                the People's Republic of China by the United States 
                Government.
                    (C) Prohibition on United States bank loans or bond 
                offerings in United States markets on the part of any 
                national of the People's Republic of China or any 
                state-owned enterprise of the People's Republic of 
                China.
                    (D) Prohibition on the transfer or sale or after-
                sale servicing, including the provision of replacement 
                parts, to the People's Republic of China or any 
                national of the People's Republic of China of any item 
                on the United States Munitions List and suspension of 
                any agreement with the People's Republic of China or 
                any national of the People's Republic of China or any 
                state-owned enterprise of the People's Republic of 
                China for the co-development or co-production of any 
                item on the United States Munitions List.
            (2) Tier 2 measure.--The term ``tier 2 measure'' includes 
        any or all of the following:
                    (A) Suspension of all scientific, academic, and 
                technical exchanges between the People's Republic of 
                China and the United States.
                    (B) Direction of the Export-Import Bank of the 
                United States not to approve the issuance of any 
                guarantees, insurance, extension of credit, or 
                participation in the extension of credit to the 
                People's Republic of China.
                    (C) Denial of access to the capital markets of the 
                United States by all state-owned enterprises of the 
                People's Republic of China.
                    (D) Prohibition on the transfer or sale to the 
                People's Republic of China or any national of the 
                People's Republic of China of any item on the Commerce 
                Control List that is controlled for national security 
                purposes and prohibition of after-sale servicing, 
                including the provision of replacement parts for such 
                items.
            (3) Tier 3 measure.--The term ``tier 3 measure'' includes 
        any or all of the following:
                    (A) Prohibition on procurement by the United States 
                Government or entering into any contract for the 
                procurement of, any goods or services from the People's 
                Republic of China or any national of the People's 
                Republic of China.
                    (B) Designation of the People's Republic of China 
                in a country tier under the Export Administration 
                Regulations that is higher than the country tier in 
                effect.
                    (C) Denial of access to the capital markets of the 
                United States by any company owned or controlled by 
                nationals of the People's Republic of China.
                    (D) Prohibition on the transfer or sale to the 
                People's Republic of China or any national of the 
                People's Republic of China of any item on the Commerce 
                Control List and prohibition of after-sale servicing, 
                including replacement parts for such items.

SEC. 6. PROCEDURES FOR CONGRESSIONAL REVIEW.

    (a) Written Justification.--Any notification submitted by the 
President under section 3 indicating that the President is not imposing 
a measure or exercising authority under section 4 or 5 or that the 
President is making a determination under section 7 shall include a 
written justification describing in detail the facts and circumstances 
relating specifically to the person identified in a report submitted 
pursuant to section 3(a) that supports the President's decision not to 
exercise the authority of section 4 or section 5 or the President's 
decision to make a determination under section 7 with respect to that 
person.
    (b) Congressional Action.--If Congress receives a notification 
described in section 3 and does not agree with the justification 
described in subsection (a), the appropriate measure shall be imposed 
with respect to the person identified in the notification if a joint 
resolution described in this section is enacted into law.
    (c) Joint Resolution.--
            (1) Definition.--For purposes of this section, a joint 
        resolution means a resolution introduced by any Member of 
        Congress after the date the notification described in section 3 
        is received, the resolving clause of which contains only the 
        following: ``That Congress does not agree with the 
        justification contained in the notification submitted by the 
        President pursuant to the China Nonproliferation Act on 
        ______________ and that the President shall exercise the 
        mandatory measures under section 4 of the Act and one or all of 
        the tier ____ measures under that Act.''; with the first blank 
        space being filled with the appropriate date and the second 
        blank space being filled with the appropriate tier.
            (2) Referral to committee.--
                    (A) Senate.--A joint resolution introduced in the 
                Senate shall be referred to the Committee on Foreign 
                Relations of the Senate.
                    (B) House of representatives.--A joint resolution 
                introduced in the House of Representatives shall be 
                referred to the Committee on International Relations of 
                the House of Representatives.
                    (C) Reporting.--A joint resolution may not be 
                reported before the 8th day after the date on which the 
                joint resolution is introduced.
            (3) Discharge of committee.--If the committee to which a 
        joint resolution is referred in either House has not reported 
        the joint resolution (or an identical joint resolution) at the 
        end of 15 calendar days during which that House is in 
session after the date on which the joint resolution is introduced--
                    (A) the committee shall be deemed to be discharged 
                from further consideration of the joint resolution; and
                    (B) the joint resolution shall be placed on the 
                appropriate calendar of that House.
            (4) Floor consideration.--
                    (A) In general.--
                            (i) Motion to proceed to consideration.--
                        When the committee to which a joint resolution 
                        is referred in either House has reported, or 
                        has been deemed to be discharged (under 
                        paragraph (3)) from further consideration of, a 
                        joint resolution--
                                    (I) it is at any time thereafter in 
                                order (even though a previous motion to 
                                the same effect has been disagreed to) 
                                for any Member of that House to move to 
                                proceed to the consideration of the 
                                joint resolution; and
                                    (II) all points of order against 
                                the joint resolution (and against 
                                consideration of the joint resolution) 
                                are waived.
                            (ii) Treatment of motion.--A motion under 
                        clause (i)--
                                    (I) is privileged in the Senate and 
                                is highly privileged in the House of 
                                Representatives;
                                    (II) is not debatable; and
                                    (III) is not subject to amendment, 
                                a motion to postpone, or a motion to 
                                proceed to the consideration of other 
                                business.
                            (iii) No motion to reconsider.--A motion to 
                        reconsider the vote by which a motion under 
                        clause (i) is agreed to or disagreed to shall 
                        not be in order.
                            (iv) Agreement to motion.--If a motion 
                        under clause (i) is agreed to, the joint 
                        resolution shall remain the unfinished business 
                        of the House until the House disposes of the 
                        joint resolution.
                    (B) Debate.--
                            (i) Time.--Debate on a joint resolution, 
                        and on all debatable motions and appeals in 
                        connection with consideration of a joint 
                        resolution, shall be limited to not more than 
                        10 hours, which shall be divided equally 
                        between those favoring and those opposing the 
                        joint resolution. A motion further to limit 
                        debate is in order and not debatable.
                            (ii) Amendments and motions out of order.--
                        An amendment to a joint resolution, a motion to 
                        postpone, to proceed to the consideration of 
                        other business, or to recommit such a joint 
                        resolution, or a motion to reconsider the vote 
                        by which such a joint resolution is agreed to 
                        or disagreed to is not in order.
                    (C) Vote on final passage.--A vote on final passage 
                of the joint resolution shall be taken in each House on 
                or before the close of the 15th calendar day during 
                which that House is in session after the resolution is 
                reported by the committee of that House to which it was 
                referred, or after the committee has been discharged 
                from further consideration of the resolution.
                    (D) Rulings of the chair of procedure.--Appeals 
                from the decisions of the Chair relating to the 
                application of the rules of either House to the 
                procedure relating to a joint resolution shall be 
                decided without debate.
            (5) Coordination with action by other house.--
                    (A) In general.--If, before the passage by 1 House 
                of a joint resolution of that House, that House 
                receives from the other House a joint resolution, the 
                procedures stated in this paragraph shall apply.
                    (B) No referral.--The joint resolution of the other 
                House shall not be referred to a committee.
                    (C) Procedure.--With respect to a joint resolution 
                of the House receiving the joint resolution--
                            (i) the procedure in that House shall be 
                        the same as if no joint resolution had been 
                        received from the other House; but
                            (ii) the vote on final passage shall be on 
                        the joint resolution of the other House.
            (6) Rules of the senate and the house of representatives.--
        This subsection is enacted by Congress--
                    (A) as an exercise of the rulemaking power of the 
                Senate and the House of Representatives, respectively; 
                and
                            (i) is deemed a part of the rules of each 
                        House, respectively, but applicable only with 
                        respect to the procedure to be followed in that 
                        House in the case of a joint resolution; and
                            (ii) supersedes other rules only to the 
                        extent that the subsection is inconsistent with 
                        those rules; and
                    (B) with full recognition of the constitutional 
                right of either House to change the rules (so far as 
                the rules relate to the procedure of that House) at any 
                time, in the same manner and to the same extent as in 
                the case of any other rule of that House.

SEC. 7. DETERMINATION EXEMPTING PERSON OR THE PEOPLE'S REPUBLIC OF 
              CHINA FROM SECTIONS 4 AND 5.

    (a) In General.--Sections 4 and 5 shall not apply to a person or to 
the People's Republic of China 15 days after the President reports to 
the Committee on International Relations of the House of 
Representatives, the Committee on Foreign Relations of the Senate, the 
Committee on Armed Services of the Senate, the Select Committee on 
Intelligence of the Senate, and the Committee on Governmental Affairs 
of the Senate, that the President has determined, on the basis of 
information provided by that person, or otherwise obtained by the 
President, that--
            (1) the person did not, on or after January 1, 2000, 
        knowingly transfer to or export from the People's Republic of 
        China the goods, services, or technology the apparent transfer 
        or export of which caused that person to be identified in a 
        report submitted pursuant to section 3(a);
            (2) the person is subject to the primary jurisdiction of a 
        government that is an adherent to one or more relevant 
        nonproliferation regimes, the person was identified in a report 
        submitted pursuant to section 3(a) with respect to a transfer 
        of goods, services, or technology described in section 3(a)(1), 
        and such transfer was made consistent with the guidelines and 
        parameters of all such relevant regimes of which such 
        government is an adherent; or
            (3) it is important to the national security of the United 
        States not to apply the provisions of section 4 or 5.
    (b) Opportunity To Provide Information.--Congress urges the 
President--
            (1) in every appropriate case, to contact in a timely 
        fashion each person identified in each report submitted 
        pursuant to section 3(a), or the government with primary 
        jurisdiction over such person, in order to afford such person 
        or government, the opportunity to provide explanatory, 
        exculpatory, or other additional information with respect to 
        the transfer that caused such person to be identified in a 
        report submitted pursuant to section 3(a); and
            (2) to exercise the authority in subsection (a) in all 
        cases where information obtained from a foreign person 
        identified in a report submitted pursuant to section 3(a), or 
        from the government with primary jurisdiction over such person, 
        establishes that the exercise of such authority is warranted.
    (c) Submission in Classified Form.--The determination and report of 
the President under subsection (a) should be submitted in unclassified 
form, with classified annexes as necessary.

SEC. 8. NOTIFICATION TO SECURITIES COMMISSION OF INCLUSION IN REPORT.

    (a) Definitions.--In this section, the following definitions shall 
apply:
            (1) Commission.--The term ``Commission'' means the 
        Securities and Exchange Commission.
            (2) Registered national securities association.--The term 
        ``registered national securities association'' means an 
        association registered under section 15A(b) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78o-3(b)).
            (3) Registered national securities exchange.--The term 
        ``registered national securities exchange'' means a national 
        securities exchange registered under 6 of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78f).
            (4) Registration statement.--The term ``registration 
        statement'' has the same meaning as in section 2 of the 
        Securities Act of 1933 (15 U.S.C. 77b).
            (5) Securities laws.--The terms ``securities laws'' and 
        ``security'' have the same meanings as in section 3 of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c).
    (b) Notification to the Commission.--Each report prepared by the 
President under section 3 shall be transmitted to the Commission at the 
times specified in section 3(b).
    (c) Regulations.--Not later than 6 months after the date of 
enactment of this Act, the Commission shall promulgate regulations--
            (1) to ensure that securities investors are notified of the 
        identity of any person included in a report prepared by the 
        President under section 3, the securities of which are listed, 
        or authorized for listing, on a registered national securities 
        exchange (or tier or segment thereof) or by a registered 
        national securities association; and
            (2) to require each person included in a report of the 
        President under section 3 to provide notice of such inclusion 
        in each written report, statement, or other filing or notice 
        required from that person under the securities laws, 
        including--
                    (A) any registration statement;
                    (B) any annual or quarterly report, statement, or 
                other filing or notice;
                    (C) any proxy, consent, authorization, information 
                statement, or other notice required to be sent to 
                shareholders with respect to any security registered 
                pursuant to the securities laws;
                    (D) any report, statement, or other filing or 
                notice required in connection with an initial public 
                offering; and
                    (E) any report, statement, or other filing required 
                in connection with a merger, acquisition, tender offer, 
                or similar transaction.
                                 <all>