[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7757 Introduced in House (IH)]

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118th CONGRESS
  2d Session
                                H. R. 7757

  To amend the Securities Exchange Act of 1934 to require disclosures 
   with respect to certain financial risks relating to the People's 
               Republic of China, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 20, 2024

  Mr. Sherman (for himself and Mrs. Spartz) introduced the following 
    bill; which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
  To amend the Securities Exchange Act of 1934 to require disclosures 
   with respect to certain financial risks relating to the People's 
               Republic of China, 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 Risk Reporting Act''.

SEC. 2. DISCLOSURE WITH RESPECT TO CERTAIN FINANCIAL RISKS RELATING TO 
              THE PEOPLE'S REPUBLIC OF CHINA.

    (a) Sense of Congress.--It is the sense of Congress that investing 
in China poses unique risks that investors should carefully consider.
    (b) Annual Disclosures.--Section 13 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78m) is amended by adding at the end the following:
    ``(t) Disclosure With Respect to Certain Financial Risks Relating 
to the People's Republic of China.--
            ``(1) In general.--Each issuer required to file an annual 
        report under subsection (a) shall include in such report--
                    ``(A) with respect to each covered foreign market, 
                a description (including quantification, if possible) 
                of--
                            ``(i) the degree to which each supply chain 
                        of such issuer relies upon or is exposed to the 
                        covered foreign market; and
                            ``(ii) the operations of such issuer in the 
                        covered foreign market;
                    ``(B) a narrative description of the issuer's China 
                risk; and
                    ``(C) if the issuer identifies a material China 
                risk, a narrative description with respect to each 
                China risk identified by the issuer of--
                            ``(i) the actions the issuer has taken or 
                        will take to minimize that China risk; and
                            ``(ii) the additional actions the issuer 
                        may take to minimize that China risk if a 
                        covered event occurs.
            ``(2) Rule of construction.--Nothing in this subsection 
        shall be construed to require an issuer to--
                    ``(A) disclose the assessment of such issuer as to 
                the likelihood that a covered event or any China risk 
                will occur; or
                    ``(B) provide any third-party assessment of such 
                likelihood.
            ``(3) Definitions.--In this subsection:
                    ``(A) China risk.--The term `China risk' means an 
                issuer's exposure to material financial consequences 
                caused by the Chinese Communist Party, the Government 
                of the People's Republic of China, or firms or other 
                entities operating in the People's Republic of China 
                stemming from reasonably likely, imminent, or ongoing 
                factors, including--
                            ``(i) consequences for the operations of 
                        the issuer--
                                    ``(I) in a covered foreign market; 
                                and
                                    ``(II) caused by disruptions to 
                                supply chains, including supply chains 
                                for--
                                            ``(aa) goods or services 
                                        originating in a covered 
                                        foreign market; and
                                            ``(bb) goods transported 
                                        through or over the East China 
                                        Sea or South China Sea;
                            ``(ii) devaluation, seizure, expropriation, 
                        denial of access, or nationalization of assets, 
                        including intellectual property, of the issuer 
                        in a covered foreign market;
                            ``(iii) imperfect rule of law, unequal or 
                        imperfect enforcement of intellectual property 
                        rights, or biased judicial proceedings;
                            ``(iv) with respect to any equity 
                        investments the issuer has within a covered 
                        foreign market, impediments to exercising full 
                        voting rights of American or non-Chinese 
                        shareholders or any firm in which the issuer 
                        has an equity investment taking actions against 
                        the interests of the firm's shareholders in 
                        favor of the interests of the Chinese Communist 
                        Party or the Government of the People's 
                        Republic of China; and
                            ``(v) other material financial impact on 
                        the operations of the issuer caused by the 
                        Chinese Communist Party, the Government of the 
                        People's Republic of China, or firms or other 
                        entities operating in the People's Republic of 
                        China.
                    ``(B) Covered event.--The term `covered event'--
                            ``(i) means a significant disruption to the 
                        economic relations between the United States 
                        and the People's Republic of China, including--
                                    ``(I) a partial or full trade 
                                embargo of the People's Republic of 
                                China by the United States (or vice 
                                versa);
                                    ``(II) trade or financial sanctions 
                                imposed on the People's Republic of 
                                China by the United States (or vice 
                                versa); and
                                    ``(III) the United States revoking 
                                permanent normal trade relations with 
                                the People's Republic of China (or vice 
                                versa); and
                            ``(ii) includes disruptions resulting from 
                        PRC military action against Taiwan.
                    ``(C) Covered foreign market.--The term `covered 
                foreign market' means mainland China, the Hong Kong 
                special administrative region, the Macau special 
                administrative region, Taiwan, Japan, Mongolia, the 
                Democratic People's Republic of Korea, and the Republic 
                of Korea.
                    ``(D) Mainland china.--The term `mainland China' 
                means the People's Republic of China, excluding the 
                Hong Kong special administrative region and the Macau 
                special administrative region.
                    ``(E) Operations.--The term `operations' may 
                include, with respect to an issuer required to file an 
                annual report under subsection (a), the assets, 
                personnel, sales and revenue, liabilities, technology, 
                intellectual property, and other notable ties or 
                activities of such issuer.
                    ``(F) PRC military action against taiwan.--The term 
                `PRC military action against Taiwan'--
                            ``(i) means a campaign of armed aggression 
                        by the People's Republic of China against the 
                        Government of Taiwan (or the territories under 
                        its control); and
                            ``(ii) includes--
                                    ``(I) a firepower strike campaign;
                                    ``(II) an island landing campaign; 
                                and
                                    ``(III) a full or partial blockade 
                                (by sea or air).''.
    (c) Disclosure at Time of Registration.--Section 12(b) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78l(b)) is amended by adding 
at the end the following:
            ``(4) The information described under section 13(t)(1).''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date that is 180 days after the date of the enactment of 
this section.
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