[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 945 Enrolled Bill (ENR)]

        S.945

                     One Hundred Sixteenth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

           Begun and held at the City of Washington on Friday,
            the third day of January, two thousand and twenty


                                 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.

    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 ``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) require each covered issuer identified under 
        subparagraph (A) to, in accordance with the rules issued by the 
        Commission under paragraph (4), submit to the 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) 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) 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) 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. 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--
                (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 Chinese 
    Communist Party, including the text of any such charter.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.