[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6307 Introduced in House (IH)]

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118th CONGRESS
  1st Session
                                H. R. 6307

To prohibit certain actions and require reporting to defend against the 
   economic and national security risks posed by foreign adversarial 
              blockchain networks, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 8, 2023

   Mr. Nunn of Iowa (for himself and Ms. Spanberger) introduced the 
following bill; which was referred to the Committee on Foreign Affairs, 
 and in addition to the Committees on Financial Services, Intelligence 
 (Permanent Select), and Oversight and Accountability, 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 prohibit certain actions and require reporting to defend against the 
   economic and national security risks posed by foreign adversarial 
              blockchain networks, 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 ``Creating Legal Accountability for 
Rogue Innovators and Technology Act of 2023'' or the ``CLARITY Act of 
2023''.

SEC. 2. FINDINGS; SENSE OF CONGRESS.

    (a) Findings.--Congress finds the following:
            (1) Blockchain service activities by governments and 
        organizations that are adversaries of the United States can 
        create risks to the economic, national security and foreign 
        policy interests of the United States.
            (2) The Blockchain-based Services Network of the People's 
        Republic of China, and unregulated, self-proclaimed ``supra-
        national'' companies pose risks to the national security and 
        foreign policy interests of the United States.
    (b) Sense of Congress.--It is the sense of Congress that the 
development of a Federal Government strategy to protect the United 
States from risks created from the Blockchain-based Services Network of 
the People's Republic of China and other foreign adversarial blockchain 
network infrastructure is essential to the national security and 
economic security of the United States.

SEC. 3. PROHIBITIONS RELATING TO COVERED DISTRIBUTED LEDGER TECHNOLOGY 
              AND BLOCKCHAIN EQUIPMENT OR SERVICES.

    (a) Prohibition on Acquisition.--No head of an executive agency may 
acquire, or enter into, extend, or renew a contract or other agreement 
for, any equipment, system, or service that uses covered distributed 
ledger technology and blockchain equipment or services as a substantial 
or essential component of, or critical technology as part of, such 
equipment, system, or service.
    (b) Prohibition on Loan and Grant Funds.--
            (1) Prohibition.--No head of an executive agency may 
        obligate or expend loan or grant funds to acquire, or enter 
        into, extend, or renew a contract or other agreement for, an 
        equipment, system, or service described in subsection (a).
            (2) Prioritization.--In implementing the prohibition under 
        paragraph (1), the heads of executive agencies administering 
        loan, grant, or subsidy programs, including the Secretary of 
        Homeland Security and the Secretary of Commerce, shall 
        prioritize available funding and technical support to assist 
        affected businesses, institutions, and organizations as is 
        reasonably necessary for those affected entities to transition 
        from covered distributed ledger technology and blockchain 
        equipment or services, to acquire replacement equipment and 
        services, and to ensure that communications service to users 
        and customers is sustained.
    (c) Rule of Construction.--Nothing in subsection (a) or (b) shall 
be construed to--
            (1) prohibit the head of an executive agency from acquiring 
        from an entity, or entering into, extending, or renewing a 
        contract or other agreement with an entity for, a service that 
        connects to the facilities of a third party, such as blockchain 
        protocols, or interconnection arrangements; or
            (2) cover wireless telecommunications equipment or third-
        party validators that cannot route or redirect user data 
        traffic or permit visibility into any user data or packets that 
        such equipment transmits or otherwise handles.
    (d) Effective Date.--The prohibitions under subsections (a) and (b) 
shall take effect on the date that is 2 years after the date of the 
enactment of this Act.
    (e) Waiver Authority.--
            (1) Executive agencies.--Except as provided in paragraph 
        (2), beginning on the effective date under subsection (d), the 
        head of an executive agency may, for a period of not more than 
        2 years per waiver, issue a waiver of the requirements under 
        subsection (a) with respect to an entity that requests such a 
        waiver. The waiver may be provided only if the entity seeking 
        the waiver--
                    (A) provides a compelling justification for the 
                additional time to implement the requirements under 
                such subsection, as determined by the head of the 
                executive agency; and
                    (B) submits to the head of the executive agency, 
                who shall not later than 30 days thereafter submit to 
                the appropriate congressional committees, a full and 
                complete laydown of the presences of covered 
                distributed ledger technology and blockchain equipment 
                or services in the entity's supply chain and a phase-
                out plan to eliminate such covered distributed ledger 
                technology and blockchain equipment or services.
            (2) Elements of the intelligence community.--Beginning on 
        the effective date under subsection (d), each head of an 
        element of the intelligence community may waive the 
        requirements under subsection (a) if such head determines the 
        waiver is in the national security interests of the United 
        States.

SEC. 4. REPORTS TO DEFEND AGAINST RISKS POSED BY COVERED DISTRIBUTED 
              LEDGER TECHNOLOGY AND BLOCKCHAIN EQUIPMENT OR SERVICES.

    (a) In General.--Not later than 180 days after the date of the 
enactment of this Act, and annually thereafter, the Secretary of the 
Treasury, the Secretary of State, and the Director of National 
Intelligence shall jointly, and in consultation with the officials 
specified in subsection (b), submit to Congress a report that includes 
the following:
            (1) A description of interagency policies and procedures to 
        defend the United States financial markets, United States 
        sanctions, United States business interests in the People's 
        Republic of China, and global supply chains from the economic 
        and national security risks posed by covered distributed ledger 
        technology and blockchain equipment or services.
            (2) A description of commercial and public administration 
        activities used by the Government of the People's Republic of 
        China and the Chinese Communist Party involving the entities 
        listed under subparagraphs (A) through (E) of section 7(2), 
        including militarization, industrialization, international 
        trade, and other commercial activity.
            (3) An assessment of the foreign policy and national 
        security risks to the United States relating to transactions 
        using covered distributed ledger technology and blockchain 
        equipment or services, including circumvention of United States 
        and international sanctions, including through the Society for 
        Worldwide Interbank Financial Telecommunication (commonly known 
        as ``SWIFT'') payments system.
            (4) An assessment of data collection, cybersecurity risks, 
        and the use of data that involves United States persons by the 
        Government of the People's Republic of China and the Chinese 
        Communist Party involving transactions relating to covered 
        distributed ledger technology and blockchain equipment or 
        services of the People's Republic of China.
            (5) An assessment of the use of covered distributed ledger 
        technology and blockchain equipment or services to collect data 
        as part of the social credit system of the People's Republic of 
        China.
            (6) An assessment of the impact and national security risks 
        of covered distributed ledger technology and blockchain 
        equipment or services on data collection, cross-border 
        payments, and economic integration, including with respect to 
        countries participating in the Belt and Road Initiative of the 
        People's Republic of China.
            (7) An assessment of the impact of covered distributed 
        ledger technology and blockchain equipment or services on the 
        United States blockchain technology and distributed ledger 
        technology industries, to include an assessment of its 
        commercial adoption globally and its integration with other 
        smart city technologies in the United States and 
        internationally.
            (8) An assessment of the technologies, system 
        architectures, and protocols underpinning covered distributed 
        ledger technology and blockchain equipment or services, and 
        recommendations with respect to strengthening export controls 
        for United States technologies relating to the development and 
        implementation of covered distributed ledger technology and 
        blockchain equipment or services.
            (9) An assessment of the impact of covered distributed 
        ledger technology and blockchain equipment or services on 
        international illicit finance.
            (10) An assessment of the impact of covered distributed 
        ledger technology and blockchain equipment or services on 
        global trade, investment, and other activities and how 
        increased use of covered distributed ledger technology and 
        blockchain equipment or services may affect the status and 
        future of the United States dollar as the world reserve 
        currency.
            (11) An assessment of how covered distributed ledger 
        technology and blockchain equipment or services fit into the 
        national security and economic objectives of the People's 
        Republic of China and the Chinese Communist Party, along with 
        other foreign adversaries.
            (12) An assessment of coordination between the United 
        States and allies of the United States with respect to the 
        national security risks and best practices relating to covered 
        distributed ledger technology and blockchain equipment or 
        services.
            (13) Any other recommendations of the Secretary of 
        Treasury, the Secretary of State, or the Director of National 
        Intelligence regarding the foreign policy and national security 
        implications of covered distributed ledger technology and 
        blockchain equipment or services.
    (b) Officials Specified.--The officials specified in this 
subsection include the following:
            (1) The Secretary of Defense.
            (2) The Secretary of Commerce.
            (3) The United States Trade Representative.
            (4) The Attorney General.
            (5) The Chairman of the Board of Governors of the Federal 
        Reserve System.
            (6) The Director of the National Institute of Standards and 
        Technology and the Under Secretary of Commerce for Standards 
        and Technology.
            (7) The Under Secretary of Commerce for Industry and 
        Security of the United States.
    (c) Form.--Each report required by subsection (a) may be submitted 
in classified form, but if so submitted shall include an unclassified 
executive summary.

SEC. 5. RECOMMENDATIONS FOR CONGRESS.

    Not later than 90 days after each date on which a report is 
submitted under section 4, the Secretary of the Treasury, the Secretary 
of State, and the Director of National Intelligence shall jointly 
submit to Congress a set of recommendations that contain--
            (1) a list of existing enforcement actions that may be used 
        to defend the United States from risks identified in the 
        report; and
            (2) an action-item plan on steps Congress may take to 
        address such risks.

SEC. 6. REPORT ON MALIGN ENTITIES IN BLOCKCHAIN AND DISTRIBUTED LEDGER 
              TECHNOLOGY INDUSTRY.

    (a) Report.--Not later than 180 days after the date of the 
enactment of this Act, and annually thereafter, the Secretary of the 
Treasury, the Secretary of State, and the Director of National 
Intelligence shall jointly, and in consultation with the officials 
specified in section 5(b), submit to Congress a report that includes 
the following:
            (1) A list of countries, proxies, firms, and technologies 
        that are malign in the blockchain and distributed ledger 
        technology industry.
            (2) A description of what harms such countries, proxies, 
        firms, and technologies cause to United States interests and 
        sanctions enforcement, the use of the United States dollar, and 
        international anti-money laundering and countering the 
        financing of terrorism standards.
            (3) A description of what mitigating strategies the United 
        States may use to counter such harms.
            (4) Recommendations on how to add to or modify the list of 
        covered distributed ledger technology and blockchain equipment 
        or services in order to capture new networks that emerge from 
        foreign adversaries.
    (b) Form.--The report required by subsection (a) may be submitted 
in classified form, but if so submitted shall include an unclassified 
executive summary.

SEC. 7. DEFINITIONS.

    In this Act:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees''' means--
                    (A) the Committee on Banking, Housing, and Urban 
                Affairs, the Committee on Foreign Relations, and the 
                Committee on Homeland Security and Governmental Affairs 
                of the Senate; and
                    (B) the Committee on Financial Services, the 
                Committee on Foreign Affairs, the Committee on 
                Intelligence, and the Committee on Oversight and 
                Government Reform of the House of Representatives.
            (2) Covered distributed ledger technology and blockchain 
        equipment or services.--The term ``covered distributed ledger 
        technology and blockchain equipment or services'' means 
        distributed ledger technology and blockchain equipment or 
        services of or originating from a foreign adversary, including 
        any of the following parent companies or subsidiaries thereof:
                    (A) The Blockchain-based Services Network.
                    (B) The Spartan Network.
                    (C) The Conflux Network.
                    (D) iFinex, Inc.
                    (E) Red Date Technology Co., Ltd.
            (3) Executive agency.--The term ``executive agency'' has 
        the meaning given the term in section 133 of title 41, United 
        States Code.
            (4) Foreign adversary.--The term ``foreign adversary'' has 
        the meaning given such term in section 7.2 of title 15, Code of 
        Federal Regulations.
            (5) Intelligence community.--The term ``intelligence 
        community'' has the meaning given the term in section 3 of the 
        National Security Act of 1947 (50 U.S.C. 3003).
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