[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3508 Introduced in House (IH)]

<DOC>






116th CONGRESS
  1st Session
                                H. R. 3508

 To impose sanctions with respect to the People's Republic of China in 
 relation to activities in the South China Sea and the East China Sea, 
                        and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 26, 2019

 Mr. Gallagher (for himself and Mr. Panetta) introduced the following 
 bill; which was referred to the Committee on Foreign Affairs, and in 
addition to the Committees on the Judiciary, Financial Services, Armed 
  Services, and Transportation and Infrastructure, 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 impose sanctions with respect to the People's Republic of China in 
 relation to activities in the South China Sea and the East China Sea, 
                        and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``South China Sea 
and East China Sea Sanctions Act of 2019''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
Sec. 4. Policy of the United States with respect to the South China Sea 
                            and the East China Sea.
Sec. 5. Sense of Congress with respect to the South China Sea and the 
                            East China Sea.
Sec. 6. Sanctions with respect to Chinese persons responsible for 
                            China's activities in the South China Sea 
                            and the East China Sea.
Sec. 7. Determinations and report on Chinese companies active in the 
                            South China Sea and the East China Sea.
Sec. 8. Prohibition against documents portraying the South China Sea or 
                            the East China Sea as part of China.
Sec. 9. Prohibition on facilitating certain investments in the South 
                            China Sea or the East China Sea.
Sec. 10. Department of Justice affirmation of non-recognition of 
                            annexation.
Sec. 11. Non-recognition of Chinese sovereignty over the South China 
                            Sea or the East China Sea.
Sec. 12. Prohibition on certain assistance to countries that recognize 
                            Chinese sovereignty over the South China 
                            Sea or the East China Sea.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) According to the Asia-Pacific Maritime Security 
        Strategy issued by the Department of Defense in August 2015, 
        ``Although the United States takes no position on competing 
        sovereignty claims to land features in the region, all such 
        claims must be based upon land (which in the case of islands 
        means naturally formed areas of land that are above water at 
        high tide), and all maritime claims must derive from such land 
        in accordance with international law.''.
            (2) According to the annual report of the Department of 
        Defense to Congress on the military power of the People's 
        Republic of China submitted in April 2016, ``Throughout 2015, 
        China continued to assert sovereignty claims over features in 
        the East and South China Seas. In the East China Sea, China 
        continued to use maritime law enforcement ships and aircraft to 
        patrol near the Senkaku (Diaoyu) Islands in order to challenge 
        Japan's claim. In the South China Sea, China paused its land 
        reclamation effort in the Spratly Islands in late 2015 after 
        adding more than 3,200 acres of land to the seven features it 
        occupies in the archipelago. Although these artificial islands 
        do not provide China with any additional territorial or 
        maritime rights within the South China Sea, China will be able 
        to use them as persistent civil-military bases to enhance its 
        long-term presence in the South China Sea significantly.''.
            (3) On May 30, 2015, at the Shangri-la Dialogue of the 
        International Institute for Strategic Studies, Secretary of 
        Defense Ashton Carter stated that ``with its actions in the 
        South China Sea, China is out of step with both the 
        international rules and norms that underscore the Asia-
        Pacific's security architecture, and the regional consensus 
        that favors diplomacy and opposes coercion''.
            (4) On July 24, 2015, Admiral Harry Harris, Jr., noted at a 
        forum in Colorado that each year more than $5,300,000,000,000 
        in global sea-based trade passes through the South China Sea.
            (5) On June 4, 2016, at the Shangri-la Dialogue, Secretary 
        of Defense Ashton Carter stated: ``[T]he United States will 
        stand with regional partners to uphold core principles, like 
        freedom of navigation and overflight and the peaceful 
        resolution of disputes through legal means and in accordance 
        with international law. As I affirmed here last year, and 
        America's Freedom of Navigation Operations in the South China 
        Sea have demonstrated, the United States will continue to fly, 
        sail and operate wherever international law allows, so that 
        everyone in the region can do the same.''.
            (6) On July 12, 2016, the Permanent Court of Arbitration's 
        Tribunal organized pursuant to the United Nations Convention on 
        the Law of the Sea issued its unanimous award in the 
        arbitration instituted by Republic of the Philippines against 
        the People's Republic of China. The Tribunal noted that its 
        award is final and binding under that Convention.
            (7) Also according to the award, the Tribunal ``concluded 
        that, to the extent China had historical rights to resources in 
        the waters of the South China Sea, such rights were 
        extinguished to the extent they were incompatible with the 
        exclusive economic zones provided for in the Convention. The 
        Tribunal concluded that there was no legal basis for China to 
        claim historic rights to resources within the sea areas falling 
        within the `nine-dash line'.''.
            (8) Also according to the award, the Tribunal ``held that 
        the Spratly Islands cannot generate maritime zones collectively 
        as a unit. Having found that none of the features claimed by 
        China was capable of generating an exclusive economic zone, the 
        Tribunal found that it could--without delimiting a boundary--
        declare that certain sea areas are within the exclusive 
        economic zone of the Philippines, because those areas are not 
        overlapped by any possible entitlement of China.''.
            (9) Also according to the award, the Tribunal ``found that 
        China had violated the Philippines' sovereign rights in its 
        exclusive economic zone by (a) interfering with Philippine 
        fishing and petroleum exploration, (b) constructing artificial 
        islands, and (c) failing to prevent Chinese fishermen from 
        fishing in the zone. The Tribunal also held that fishermen from 
        the Philippines (like those from China) had traditional fishing 
        rights at Scarborough Shoal and that China had interfered with 
        these rights in restricting access. The Tribunal further held 
        that Chinese law enforcement vessels had unlawfully created a 
        serious risk of collision when they physically obstructed 
        Philippine vessels.''.
            (10) On July 12, 2016, the Ministry of Foreign Affairs of 
        the People's Republic of China issued a statement that China 
        ``declares that the [Tribunal] award is null and void and has 
        no binding force. China neither accepts nor recognizes it. . . 
        . China's territorial sovereignty and maritime rights and 
        interests in the South China Sea shall under no circumstances 
        be affected by those awards. China opposes and will never 
        accept any claim or action based on those awards.''.
            (11) On July 12, 2016, the Government of the People's 
        Republic of China issued the fifth statement in the name of 
        that Government since 1979 that--
                    (A) stated that the People's Republic of China has 
                sovereignty over the 4 rocks and shoals in the South 
                China Sea;
                    (B) claims internal waters, territorial seas, 
                contiguous zones, one or more exclusive economic zones, 
                and a continental shelf based on that sovereignty 
                claim; and
                    (C) continues to claim historic rights in the South 
                China Sea.
            (12) On July 12, 2016, Assistant Secretary of State and 
        Department of State Spokesperson John Kirby noted that the 
        ``United States strongly supports the rule of law. We support 
        efforts to resolve territorial and maritime disputes in the 
        South China Sea peacefully, including through arbitration. . . 
        . we urge all claimants to avoid provocative statements or 
        actions. This decision can and should serve as a new 
        opportunity to renew efforts to address maritime disputes 
        peacefully.''.
            (13) On July 13, 2016, the Vice Foreign Minister of the 
        People's Republic of China, Liu Zhenmin, said that declaring an 
        air defense identification zone in the South China Sea would 
        depend on the threat China faces and stated that ``[i]f our 
        security is threatened, we of course have the right to set it 
        up''.
            (14) On July 18, 2016, the People's Liberation Army Air 
        Force of the People's Republic of China stated that it had 
        conducted a ``combat air patrol'' over the South China Sea and 
        that it would become ``regular practice'' in the future. A 
        spokesperson stated that the People's Liberation Army Air Force 
        ``will firmly defend national sovereignty, security and 
        maritime interests, safeguard regional peace and stability, and 
        cope with various threats and challenges''.
            (15) On August 2, 2016, the Supreme People's Court of the 
        People's Republic of China issued a judicial interpretation 
        that people caught illegally fishing in Chinese waters could be 
        jailed for up to one year.
            (16) In the Agreement concerning the Ryukyu Islands and the 
        Daito Islands with Related Arrangements, signed at Washington 
        and Tokyo June 17, 1971 (23 UST 446), between the United States 
        and Japan (commonly referred to as the ``Okinawa Reversion 
        Treaty''), the United States agreed to apply the Treaty of 
        Mutual Cooperation and Security, with Agreed Minute and 
        Exchanges of Notes (11 UST 1632), signed at Washington January 
        19, 1961, between the United States and Japan, to the area 
        covered by the Okinawa Reversion Treaty, including the Senkaku 
        Islands.
            (17) In April 2014, President Barack Obama stated, ``The 
        policy of the United States is clear--the Senkaku Islands are 
        administered by Japan and therefore fall within the scope of 
        Article 5 of the U.S.-Japan Treaty of Mutual Cooperation and 
        Security. And we oppose any unilateral attempts to undermine 
        Japan's administration of these islands.''.
            (18) In February 2017, President Donald Trump and Japanese 
        Prime Minister Shinzo Abe issued a joint statement that 
        ``affirmed that Article V of the U.S.-Japan Treaty of Mutual 
        Cooperation and Security covers the Senkaku Islands''.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Account; correspondent account; payable-through 
        account.--The terms ``account'', ``correspondent account'', and 
        ``payable-through account'' have the meanings given those terms 
        in section 5318A of title 31, United States Code.
            (2) Alien.--The term ``alien'' has the meaning given that 
        term in section 101(a) of the Immigration and Nationality Act 
        (8 U.S.C. 1101(a)).
            (3) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Foreign Relations, the 
                Committee on Armed Services, the Committee on Banking, 
                Housing, and Urban Affairs, and the Select Committee on 
                Intelligence of the Senate; and
                    (B) the Committee on Foreign Affairs, the Committee 
                on Armed Services, the Committee on Financial Services, 
                and the Permanent Select Committee on Intelligence of 
                the House of Representatives.
            (4) Chinese person.--The term ``Chinese person'' means--
                    (A) an individual who is a citizen or national of 
                the People's Republic of China; or
                    (B) an entity organized under the laws of the 
                People's Republic of China or otherwise subject to the 
                jurisdiction of the Government of the People's Republic 
                of China.
            (5) Financial institution.--The term ``financial 
        institution'' means a financial institution specified in 
        subparagraph (A), (B), (C), (D), (E), (F), (G), (H), (I), (J), 
        (K), (M), (N), (P), (R), (T), (Y), or (Z) of section 5312(a)(2) 
        of title 31, United States Code.
            (6) Foreign financial institution.--The term ``foreign 
        financial institution'' has the meaning given that term in 
        section 1010.605 of title 31, Code of Federal Regulations (or 
        any corresponding similar regulation or ruling).
            (7) 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.
            (8) Person.--The term ``person'' means any individual or 
        entity.
            (9) United states person.--The term ``United States 
        person'' means--
                    (A) a United States citizen or an alien lawfully 
                admitted for permanent residence to the United States; 
                or
                    (B) an entity organized under the laws of the 
                United States or of any jurisdiction within the United 
                States, including a foreign branch of such an entity.

SEC. 4. POLICY OF THE UNITED STATES WITH RESPECT TO THE SOUTH CHINA SEA 
              AND THE EAST CHINA SEA.

    It is the policy of the United States--
            (1) to support the principle that disputes between 
        countries should be resolved peacefully consistent with 
        international law;
            (2) to reaffirm its unwavering commitment and support for 
        allies and partners in the Asia-Pacific region, including 
        longstanding United States policy--
                    (A) regarding Article V of the Mutual Defense 
                Treaty, signed at Washington August 30, 1951 (3 UST 
                3947), between the United States and the Philippines; 
                and
                    (B) that Article V of the Mutual Defense Assistance 
                Agreement, with Annexes, signed at Tokyo March 8, 1954 
                (5 UST 661), between the United States and Japan, 
                applies to the Senkaku Islands, which are administered 
                by Japan; and
            (3) to support the principle of freedom of navigation and 
        overflight and to continue to use the sea and airspace wherever 
        international law allows.

SEC. 5. SENSE OF CONGRESS WITH RESPECT TO THE SOUTH CHINA SEA AND THE 
              EAST CHINA SEA.

    It is the sense of Congress that--
            (1) the United States--
                    (A) opposes all claims in the maritime domains that 
                impinge on the rights, freedoms, and lawful use of the 
                seas that belong to all countries;
                    (B) opposes unilateral actions by the government of 
                any country seeking to change the status quo in the 
                South China Sea through the use of coercion, 
                intimidation, or military force;
                    (C) opposes actions by the government of any 
                country to interfere in any way in the free use of 
                waters and airspace in the South China Sea or East 
                China Sea;
                    (D) opposes actions by the government of any 
                country to prevent any other country from exercising 
                its sovereign rights to the resources of the exclusive 
                economic zone and continental shelf by making claims 
                that have no support in international law; and
                    (E) upholds the principle that territorial and 
                maritime claims, including with respect to territorial 
                waters or territorial seas, must be derived from land 
                features and otherwise comport with international law;
            (2) the People's Republic of China should not continue to 
        pursue illegitimate claims and to militarize an area that is 
        essential to global security;
            (3) the United States should--
                    (A) continue and expand freedom of navigation 
                operations and overflights;
                    (B) reconsider the traditional policy of not taking 
                a position on individual claims; and
                    (C) respond to provocations by the People's 
                Republic of China with commensurate actions that impose 
                costs on any attempts to undermine security in the 
                region;
            (4) the Senkaku Islands are covered by Article V of the 
        Mutual Defense Assistance Agreement, with Annexes, signed at 
        Tokyo March 8, 1954 (5 UST 661), between the United States and 
        Japan; and
            (5) the United States should firmly oppose any unilateral 
        actions by the People's Republic of China that seek to 
        undermine Japan's control of the Senkaku Islands.

SEC. 6. SANCTIONS WITH RESPECT TO CHINESE PERSONS RESPONSIBLE FOR 
              CHINA'S ACTIVITIES IN THE SOUTH CHINA SEA AND THE EAST 
              CHINA SEA.

    (a) Initial Imposition of Sanctions.--On and after the date that is 
60 days after the date of the enactment of this Act, the President 
shall impose the sanctions described in subsection (b) with respect 
to--
            (1) any Chinese person that contributes to construction or 
        development projects, including land reclamation, island-
        making, lighthouse construction, building of base stations for 
        mobile communications services, building of electricity and 
        fuel supply facilities, or civil infrastructure projects, in 
        areas of the South China Sea contested by one or more members 
        of the Association of Southeast Asian Nations;
            (2) any Chinese person that is responsible for or complicit 
        in, or has engaged in, directly or indirectly, actions or 
        policies that threaten the peace, security, or stability of 
        areas of the South China Sea contested by one or more members 
        of the Association of Southeast Asian Nations or areas of the 
        East China Sea administered by Japan or the Republic of Korea, 
        including through the use of vessels and aircraft to impose the 
        sovereignty of the People's Republic of China in those areas;
            (3) any Chinese person that engages, or attempts to engage, 
        in an activity or transaction that materially contributes to, 
        or poses a risk of materially contributing to, an activity 
        described in paragraph (1) or (2); and
            (4) any person that--
                    (A) is owned or controlled by a person described in 
                paragraph (1), (2), or (3);
                    (B) is acting for or on behalf of such a person; or
                    (C) provides, or attempts to provide--
                            (i) financial, material, technological, or 
                        other support to a person described in 
                        paragraph (1), (2), or (3); or
                            (ii) goods or services in support of an 
                        activity described in paragraph (1), (2), or 
                        (3).
    (b) Sanctions Described.--
            (1) Blocking of property.--The President shall block and 
        prohibit, in accordance with the International Emergency 
        Economic Powers Act (50 U.S.C. 1701 et seq.), all transactions 
        in all property and interests in property of any person subject 
        to subsection (a) if such property and interests in property 
        are in the United States, come within the United States, or are 
        or come within the possession or control of a United States 
        person.
            (2) Exclusion from united states.--The Secretary of State 
        shall deny a visa to, and the Secretary of Homeland Security 
        shall exclude from the United States, any person subject to 
        subsection (a) that is an alien.
            (3) Current visa revoked.--The issuing consular officer, 
        the Secretary of State, or the Secretary of Homeland Security 
        (or a designee of one of such Secretaries) shall revoke any 
        visa or other entry documentation issued to any person subject 
        to subsection (a) that is an alien, regardless of when issued. 
        The revocation shall take effect immediately and shall 
        automatically cancel any other valid visa or entry 
        documentation that is in the alien's possession.
    (c) Exceptions; Penalties.--
            (1) Inapplicability of national emergency requirement.--The 
        requirements of section 202 of the International Emergency 
        Economic Powers Act (50 U.S.C. 1701) shall not apply for 
        purposes of subsection (b)(1).
            (2) Compliance with united nations headquarters 
        agreement.--Paragraphs (2) and (3) of subsection (b) shall not 
        apply if admission of an alien to the United States is 
        necessary to permit the United States to comply with the 
        Agreement regarding the Headquarters of the United Nations, 
        signed at Lake Success June 26, 1947, and entered into force 
        November 21, 1947, between the United Nations and the United 
        States.
            (3) 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 a person 
        that violates, attempts to violate, conspires to violate, or 
        causes a violation of regulations prescribed under subsection 
        (b)(1) to the same extent that such penalties apply to a person 
        that commits an unlawful act described in subsection (a) of 
        such section 206.
    (d) Additional Imposition of Sanctions.--
            (1) In general.--The President shall prohibit the opening, 
        and prohibit or impose strict conditions on the maintaining, in 
        the United States of a correspondent account or a payable-
        through account by a foreign financial institution that the 
        President determines knowingly, on or after the date that is 60 
        days after the date of the enactment of this Act, conducts or 
        facilitates a significant financial transaction for a person 
        subject to subsection (a) if the Director of National 
        Intelligence determines that the Government of the People's 
        Republic of China has--
                    (A) declared an air defense identification zone 
                over any part of the South China Sea;
                    (B) initiated reclamation work at another disputed 
                location in the South China Sea, such as at Scarborough 
                Shoal;
                    (C) seized control of Second Thomas Shoal;
                    (D) deployed surface-to-air missiles to any of the 
                artificial islands the People's Republic of China has 
                built in the Spratly Island chain, including Fiery 
                Cross, Mischief, or Subi Reefs;
                    (E) established territorial baselines around the 
                Spratly Island chain;
                    (F) increased harassment of Philippine vessels; or
                    (G) increased provocative actions against the 
                Japanese Coast Guard or Maritime Self-Defense Force or 
                United States forces in the East China Sea.
            (2) Report.--
                    (A) In general.--The determination of the Director 
                of National Intelligence referred to in paragraph (1) 
                shall be submitted in a report to the President and the 
                appropriate congressional committees.
                    (B) Form of report.--The report required by 
                subparagraph (A) shall be submitted in unclassified 
                form, but may include a classified annex.

SEC. 7. DETERMINATIONS AND REPORT ON CHINESE COMPANIES ACTIVE IN THE 
              SOUTH CHINA SEA AND THE EAST CHINA SEA.

    (a) In General.--The Secretary of State shall submit to the 
appropriate congressional committees a report that identifies each 
Chinese person the Secretary determines is engaged in the activities 
described in section 6(a).
    (b) Consideration.--In preparing the report required under 
subsection (a), the Secretary shall make specific findings with respect 
to whether each of the following persons is involved in the activities 
described in section 6(a):
            (1) CCCC Tianjin Dredging Co., Ltd.
            (2) CCCC Dredging (Group) Company, Ltd.
            (3) China Communications Construction Company (CCCC), Ltd.
            (4) China Petroleum Corporation (Sinopec Group).
            (5) China Mobile.
            (6) China Telecom.
            (7) China Southern Power Grid.
            (8) CNFC Guangzhou Harbor Engineering Company.
            (9) Zhanjiang South Project Construction Bureau.
            (10) Hubei Jiangtian Construction Group.
            (11) China Harbour Engineering Company (CHEC).
            (12) Guangdong Navigation Group (GNG) Ocean Shipping.
            (13) Shanghai Leading Energy Shipping.
            (14) China National Offshore Oil Corporation (CNOOC).
            (15) China Oilfield Services Limited (COSL).
            (16) China Precision Machinery Import/Export Corporation 
        (CPMIEC).
            (17) China Aerospace Science and Industry Corporation 
        (CASIC).
            (18) Aviation Industry Corporation of China (AVIC).
            (19) Shenyang Aircraft Corporation.
            (20) Shaanxi Aircraft Corporation.
            (21) China Ocean Shipping (Group) Company (COSCO).
            (22) China Southern Airlines.
            (23) Zhan Chaoying.
            (24) Sany Group.
            (25) Chinese persons affiliated with any of the entities 
        specified in paragraphs (1) through (24).
    (c) Submission and Form.--
            (1) Submission.--The report required by subsection (a) 
        shall be submitted not later than 60 days after the date of the 
        enactment of this Act and every 180 days thereafter until the 
        date that is 3 years after such date of enactment.
            (2) Form.--The report required by subsection (a) shall be 
        submitted in unclassified form, but may include a classified 
        annex if the Secretary determines it is necessary for the 
        national security interests of the United States to do so.
            (3) Public availability.--The Secretary shall publish the 
        unclassified part of the report required by subsection (a) on a 
        publicly available website of the Department of State.

SEC. 8. PROHIBITION AGAINST DOCUMENTS PORTRAYING THE SOUTH CHINA SEA OR 
              THE EAST CHINA SEA AS PART OF CHINA.

    The Government Publishing Office may not publish any map, document, 
record, electronic resource, or other paper of the United States (other 
than materials relating to hearings held by committees of Congress or 
internal work product of a Federal agency) portraying or otherwise 
indicating that it is the position of the United States that the 
territory or airspace in the South China Sea contested by one or more 
members of the Association of Southeast Asian Nations or the territory 
or airspace of areas of the East China Sea administered by Japan or the 
Republic of Korea is part of the territory or airspace of the People's 
Republic of China.

SEC. 9. PROHIBITION ON FACILITATING CERTAIN INVESTMENTS IN THE SOUTH 
              CHINA SEA OR THE EAST CHINA SEA.

    (a) In General.--No United States person may take any action to 
approve, facilitate, finance, or guarantee any investment, provide 
insurance, or underwriting in the South China Sea or the East China Sea 
that involves any person with respect to which sanctions are imposed 
under section 6(a).
    (b) Enforcement.--The Secretary of the Treasury, in consultation 
with the Secretary of State, is authorized to take such actions, 
including the promulgation of such rules and regulations, as may be 
necessary to carry out the purposes of this section.
    (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 a person that violates, attempts to 
violate, conspires to violate, or causes a violation of regulations 
prescribed under this section to the same extent that such penalties 
apply to a person that commits an unlawful act described in subsection 
(a) of such section 206.
    (d) Exception.--Subsection (a) shall not apply with respect to 
humanitarian assistance, disaster assistance, or emergency food 
assistance.

SEC. 10. DEPARTMENT OF JUSTICE AFFIRMATION OF NON-RECOGNITION OF 
              ANNEXATION.

    In any matter before any United States court, upon request of the 
court or any party to the matter, the Attorney General shall affirm the 
United States policy of not recognizing the de jure or de facto 
sovereignty of the People's Republic of China over territory or 
airspace contested by one or more members of the Association of 
Southeast Asian Nations in the South China Sea or the territory or 
airspace of areas of the East China Sea administered by Japan or the 
Republic of Korea.

SEC. 11. NON-RECOGNITION OF CHINESE SOVEREIGNTY OVER THE SOUTH CHINA 
              SEA OR THE EAST CHINA SEA.

    (a) United States Armed Forces.--The Secretary of Defense may not 
take any action, including any movement of aircraft or vessels that 
implies recognition of the sovereignty of the People's Republic of 
China over territory or airspace contested by one or more members of 
the Association of Southeast Asian Nations in the South China Sea or 
the territory or airspace of areas of the East China Sea administered 
by Japan or the Republic of Korea.
    (b) United States Flagged Vessels.--No vessel that is issued a 
certificate of documentation under chapter 121 of title 46, United 
States Code, may take any action that implies recognition of the 
sovereignty of the People's Republic of China over territory or 
airspace contested by one or more members of the Association of 
Southeast Asian Nations in the South China Sea or the territory or 
airspace of areas of the East China Sea administered by Japan or the 
Republic of Korea.
    (c) United States Aircraft.--No aircraft operated by an air carrier 
that holds an air carrier certificate issued under chapter 411 of title 
49, United States Code, may take any action that implies recognition of 
the sovereignty of the People's Republic of China over territory or 
airspace contested by one or more members of the Association of 
Southeast Asian Nations in the South China Sea or the territory or 
airspace of areas of the East China Sea administered by Japan or the 
Republic of Korea.

SEC. 12. PROHIBITION ON CERTAIN ASSISTANCE TO COUNTRIES THAT RECOGNIZE 
              CHINESE SOVEREIGNTY OVER THE SOUTH CHINA SEA OR THE EAST 
              CHINA SEA.

    (a) Prohibition.--Except as provided by subsection (c) or (d), no 
amounts may be obligated or expended to provide foreign assistance to 
the government of any country identified in a report required by 
subsection (b).
    (b) Report Required.--
            (1) In general.--Not later than 60 days after the date of 
        the enactment of this Act, and every 180 days thereafter until 
        the date that is 3 years after such date of enactment, the 
        Secretary of State shall submit to the appropriate 
        congressional committees a report identifying each country that 
        the Secretary determines recognizes, after such date of 
        enactment, the sovereignty of the People's Republic of China 
        over territory or airspace contested by one or more members of 
        the Association of Southeast Asian Nations in the South China 
        Sea or the territory or airspace of areas of the East China Sea 
        administered by Japan or the Republic of Korea.
            (2) Form.--The report required by paragraph (1) shall be 
        submitted in unclassified form, but may include a classified 
        annex if the Secretary of State determines it is necessary for 
        the national security interests of the United States to do so.
            (3) Public availability.--The Secretary of State shall 
        publish the unclassified part of the report required by 
        paragraph (1) on a publicly available website of the Department 
        of State.
    (c) Exception.--This section shall not apply with respect to 
Taiwan, humanitarian assistance, disaster assistance, emergency food 
assistance, or the Peace Corps.
    (d) Waiver.--The President may waive the application of subsection 
(a) with respect to the government of a country if the President 
determines that the waiver is in the national interests of the United 
States.
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