[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5016 Introduced in Senate (IS)]

<DOC>






118th CONGRESS
  2d Session
                                S. 5016

 To combat the economic aggression of the People's Republic of China, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 10, 2024

   Mr. Casey introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To combat the economic aggression of 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 ``Combat Chinese Economic Aggression 
Act of 2024''.

SEC. 2. REVIEW BY COMMITTEE ON FOREIGN INVESTMENT IN THE UNITED STATES 
              OF INVESTMENTS IMPACTING ECONOMIC OR TECHNOLOGICAL 
              COMPETITIVENESS.

    (a) In General.--Subsection (a)(4) of section 721 of the Defense 
Production Act of 1950 (50 U.S.C. 4565) is amended--
            (1) in subparagraph (A)--
                    (A) in clause (i), by striking ``; and'' and 
                inserting a semicolon;
                    (B) in clause (ii)--
                            (i) by striking ``clauses (ii) through 
                        (v)'' and inserting ``any of clauses (ii) 
                        through (iv) or clause (vii)''; and
                            (ii) by striking the period at the end and 
                        inserting ``; and'';
                    (C) by adding at the end the following:
                            ``(iii) any transaction described in clause 
                        (v) or (vi) of subparagraph (B) proposed or 
                        pending after the date of the enactment of this 
                        clause.''; and
            (2) in subparagraph (B)--
                    (A) by redesignating clause (v) as clause (vii); 
                and
                    (B) by inserting after clause (iv) the following:
                            ``(v) Any other investment, subject to 
                        regulations prescribed under subparagraph (D), 
                        by a foreign person in a United States business 
                        that could support the acquisition by a foreign 
                        country of capabilities to attain technological 
                        self-sufficiency or impair the economic and 
                        technological competitiveness of the United 
                        States, including--
                                    ``(I) an investment in a United 
                                States business that has received 
                                direct funding from, or has been 
                                awarded a contract by, the Department 
                                of Defense, the Department of Commerce, 
                                the Department of Energy, or another 
                                Federal agency; or
                                    ``(II) any other investment the 
                                Committee determines, by regulation, 
                                may provide to the foreign person 
                                access to expertise, business networks, 
                                or production methods critical to 
                                maintaining the economic and 
                                technological competitiveness of the 
                                United States.
                            ``(vi) Any other investment, subject to 
                        regulations prescribed under subparagraph (D)--
                                    ``(I) in a United States business 
                                that produces, designs, tests, 
                                manufactures, fabricates, or develops 
                                one or more critical technologies; and
                                    ``(II) by a foreign entity of 
                                concern (as defined in section 9901 of 
                                the William M. (Mac) Thornberry 
                                National Defense Authorization Act for 
                                Fiscal Year 2021 (15 U.S.C. 4651)) that 
                                is organized under the laws of or 
                                otherwise subject to the jurisdiction 
                                of the People's Republic of China.''.
    (b) Mandatory Declarations.--Section 721(b)(1)(C)(v)(IV) of the 
Defense Production Act of 1950 (50 U.S.C. 4565(b)(1)(C)(v)(IV)) is 
amended by adding at the end the following:
                                            ``(hh) Required 
                                        declarations for certain 
                                        transactions.--The parties to a 
                                        covered transaction shall 
                                        submit a declaration described 
                                        in subclause (I) with respect 
                                        to the transaction if--

                                                    ``(AA) a foreign 
                                                person that is a party 
                                                to the transaction is a 
                                                national of the 
                                                People's Republic of 
                                                China or an entity 
                                                organized under the 
                                                laws of or otherwise 
                                                subject to the 
                                                jurisdiction of the 
                                                People's Republic of 
                                                China; or

                                                    ``(BB) the 
                                                transaction is in the 
                                                metallurgy, 
                                                telecommunications, 
                                                energy, industrial gas, 
                                                chemicals, or 
                                                petrochemicals sector 
                                                or any other sector the 
                                                Secretary determines 
                                                appropriate for 
                                                purposes of this 
                                                item.''.

    (c) Analysis by International Trade Administration.--Section 
721(b)(1) of the Defense Production Act of 1950 (50 U.S.C. 4565(b)(1)) 
is amended by adding at the end the following:
                    ``(I) Analysis by international trade 
                administration with respect to certain transactions.--
                            ``(i) In general.--In the case of a review 
                        of a covered transaction described in clause 
                        (ii), the Secretary of Commerce, in 
                        consultation with other members of the 
                        Committee as appropriate, shall conduct an 
                        analysis of--
                                    ``(I) the sector or industry in 
                                which the United States business 
                                involved in the transaction operates;
                                    ``(II) the cumulative control of, 
                                or pattern of recent transactions by, 
                                foreign persons, including, directly or 
                                indirectly, foreign governments, in 
                                that sector or industry; and
                                    ``(III) the effect of foreign 
                                investment in that sector or industry 
                                on the national security of the United 
                                States.
                            ``(ii) Transactions described.--A covered 
                        transaction described in this clause is a 
                        covered transaction--
                                    ``(I) described in clause (vi) or 
                                (vii) of subsection (a)(4)(B); and
                                    ``(II) to which a foreign person 
                                that is a national of the People's 
                                Republic of China or an entity 
                                organized under the laws of or 
                                otherwise subject to the jurisdiction 
                                of the People's Republic of China is a 
                                party.''.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated for the Committee on Foreign Investment in the United 
States such sums as may be necessary to carry out the amendments made 
by this section.

SEC. 3. ENHANCED SECURITIES DISCLOSURE REQUIREMENTS.

    (a) Definitions.--In this section:
            (1) Commission.--The term ``Commission'' means the 
        Securities and Exchange Commission.
            (2) Country of concern.--The term ``country of concern''--
                    (A) has the meaning given the term ``covered 
                nation'' in section 4872(d) of title 10, United States 
                Code; and
                    (B) includes a jurisdiction that the Commission, in 
                consultation with the Secretary of State and the 
                Secretary of the Treasury, determines to be subject to 
                the political and legal control of a covered nation, as 
                defined in section 4872(d) of title 10, United States 
                Code.
            (3) Covered entity.--The term ``covered entity'' means an 
        entity or person that is required to file Form PF.
            (4) Exempt reporting adviser.--The term ``exempt reporting 
        adviser'' means an investment adviser described in section 
        275.204-4(a) of title 17, Code of Federal Regulations, or any 
        successor regulation.
            (5) Form adv.--The term ``Form ADV'' means the form 
        described in section 279.1 of title 17, Code of Federal 
        Regulations, or any successor regulation.
            (6) Form pf.--The term ``Form PF'' means the form described 
        in section 279.9 of title 17, Code of Federal Regulations, or 
        any successor regulation.
            (7) Private fund.--The term ``private fund'' has the 
        meaning given the term in section 202(a) of the Investment 
        Advisers Act of 1940 (15 U.S.C. 80b-2(a)).
            (8) Private fund assets.--The term ``private fund assets'' 
        has the meaning given the term in section 275.204(b)-1 of title 
        17, Code of Federal Regulations, or any successor regulation.
    (b) Enhanced Disclosure Requirements for Advisers of Private 
Funds.--
            (1) Requirements.--
                    (A) In general.--Not later than 1 year after the 
                date of enactment of this Act, the Commission shall 
                amend Form PF and Form ADV, and the rules of the 
                Commission governing the submission of Form PF and Form 
                ADV, to, subject to subparagraph (B), require each 
                covered entity and each exempt reporting adviser to 
                annually disclose when submitting Form PF or Form ADV, 
                respectively, the total private fund assets in 
                countries of concern attributable to the private funds 
                advised by the covered entity or exempt reporting 
                adviser, as applicable, which shall be broken down by 
                the percentage of those assets in each country of 
                concern.
                    (B) Application.--For the purposes of subparagraph 
                (A), the Commission shall determine whether a private 
                fund asset is in a country of concern based on--
                            (i) the amount of capital that is invested 
                        in an entity (including a subsidiary of an 
                        entity)--
                                    (I) that has a physical presence or 
                                employees in that country of concern; 
                                or
                                    (II) the plurality of the sales of 
                                which are from that country of concern; 
                                and
                            (ii) the proportion of the total assets and 
                        liabilities of an entity described in clause 
                        (i) that are located in that country of 
                        concern.
            (2) Reporting by commission.--
                    (A) Publicly available reports.--
                            (i) In general.--Not later than 1 year 
                        after the date on which the Commission makes 
                        the amendments required under paragraph (1), 
                        and not less frequently than annually 
                        thereafter, the Commission shall prepare and 
                        make publicly available a report containing a 
                        list of covered entities and exempt reporting 
                        advisers that, for the period covered by the 
                        report, have disclosed more than 0 private fund 
                        assets under Form PF or Form ADV (as amended 
                        pursuant to that subsection) in at least 1 
                        country of concern, which shall be aggregated 
                        by the covered entity or exempt reporting 
                        adviser making that disclosure.
                            (ii) Additional requirements.--Each report 
                        prepared and made available by the Commission 
                        under clause (i) shall--
                                    (I) be aggregated by covered entity 
                                or exempt reporting adviser; and
                                    (II) include the percentage of 
                                private fund assets disclosed by a 
                                covered entity or exempt reporting 
                                adviser, as applicable.
                    (B) Rule of construction.--Nothing in this 
                paragraph may be construed to permit the Commission to 
                make available any information that appears on Form PF 
                or Form ADV other than the information that is included 
                on Form PF or Form ADV as a result of the requirements 
                under paragraph (1).
    (c) Exempted Transactions.--The Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.) is amended by inserting after section 13A (15 
U.S.C. 78m-1) the following:

``SEC. 13B. DISCLOSURE REQUIREMENTS RELATING TO CERTAIN EXEMPTED 
              TRANSACTIONS.

    ``(a) Definitions.--In this section:
            ``(1) Beneficial owner.--The term `beneficial owner' means 
        a person that is determined to be a beneficial owner under 
        section 240.13d-3 of title 17, Code of Federal Regulations, or 
        any successor regulation.
            ``(2) Country of concern.--The term `country of concern'--
                    ``(A) has the meaning given the term `covered 
                nation' in section 4872(d) of title 10, United States 
                Code; and
                    ``(B) includes a jurisdiction that the Commission, 
                in consultation with the Secretary of State and the 
                Secretary of the Treasury, determines to be subject to 
                the political and legal control of a covered nation, as 
                defined in section 4872(d) of title 10, United States 
                Code.
            ``(3) Covered exempted transaction.--The term `covered 
        exempted transaction' means an offer or sale of a security that 
        is--
                    ``(A) exempt from registration under section 5 of 
                the Securities Act of 1933 (15 U.S.C. 77e); and
                    ``(B) structured or intended to comply with--
                            ``(i) section 230.506(b) of title 17, Code 
                        of Federal regulations, or any successor 
                        regulation;
                            ``(ii) sections 230.901, 230.902, and 
                        230.903 of title 17, Code of Federal 
                        Regulations, or any successor regulations; or
                            ``(iii) section 230.144A of title 17, Code 
                        of Federal Regulations, or any successor 
                        regulation.
    ``(b) Requirement.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, in the case of an issuer that conducts a covered exempted 
        transaction described in paragraph (2), that issuer shall 
        provide to the Commission, at such time and in such manner as 
        the Commission may prescribe, the following information:
                    ``(A) The identity of the issuer.
                    ``(B) The place of incorporation of the issuer.
                    ``(C) Whether the issuer is associated with at 
                least 1 consolidated entity, the plurality of the 
                assets of which are in a country of concern.
                    ``(D) Whether the issuer is associated with at 
                least 1 consolidated entity that is incorporated in a 
                country of concern.
                    ``(E) The amount of securities sold pursuant to the 
                covered exempted transaction and the net proceeds to 
                the issuer.
                    ``(F) The beneficial owners of the issuer.
                    ``(G) The intended use of the proceeds from the 
                covered exempted transaction, including each country in 
                which the issuer intends to invest those proceeds, 
                which shall be broken down by the percentage of net 
                proceeds by industry within each such country.
                    ``(H) The exemption the issuer relies on with 
                respect to the covered exempted transaction.
            ``(2) Particular covered exempted transaction described.--A 
        covered exempted transaction described in this paragraph is, 
        with respect to the issuer offering or selling the security 
        that is the subject of the covered exempted transaction, either 
        of the following instances:
                    ``(A) An offer or sale of securities in an amount 
                that is not less than $25,000,000.
                    ``(B) An offer or sale of a security such that the 
                offer or sale, together with all covered exempted 
                transactions by that issuer during the 1-year period 
                preceding the date on which the issuer offers or sells 
                the security, constitutes offers or sales in the 
                aggregate of an amount that is not less than 
                $50,000,000.
    ``(c) Authority To Revise and Promulgate Rules, Regulations, and 
Forms.--The Commission shall, for the protection of investors and fair 
and orderly markets--
            ``(1) revise and issue such rules, regulations, and forms 
        as may be necessary to carry out this section; and
            ``(2) issue rules to set conditions that limit the future 
        use of covered exempted transactions for issuers that do not 
        comply with the disclosure requirements of this section.
    ``(d) Applicability.--This section shall apply with respect to any 
covered exempted transaction that occurs on or after the date that is 1 
year after the date of enactment of this section.
    ``(e) Reports.--The Commission shall, on a quarterly basis, prepare 
and make publicly available a report that includes all information 
submitted by an issuer under this section during the quarter covered by 
the report, if that issuer--
            ``(1) is--
                    ``(A) incorporated in a country of concern; or
                    ``(B) incorporated outside of a country of concern 
                and is associated with at least 1 consolidated entity--
                            ``(i) the plurality of the assets of which 
                        are in a country of concern; or
                            ``(ii) that is incorporated in a country of 
                        concern; or
            ``(2) discloses in a filing made pursuant to this section 
        that the issuer intends to invest the proceeds from a covered 
        exempted transaction in a country of concern.''.

SEC. 4. PROTECTION OF COVERED SECTORS.

    The Defense Production Act of 1950 (50 U.S.C. 4501 et seq.) is 
amended by adding at the end the following:

              ``TITLE VIII--PROTECTION OF COVERED SECTORS

``SEC. 801. DEFINITIONS.

    ``In this title:
            ``(1) Appropriate congressional committees.--The term 
        `appropriate congressional committees' means--
                    ``(A) the Committee on Foreign Affairs, the 
                Committee on Financial Services, the Committee on Ways 
                and Means, the Committee on Appropriations, and the 
                Permanent Select Committee on Intelligence of the House 
                of Representatives; and
                    ``(B) the Committee on Foreign Relations, the 
                Committee on Banking, Housing, and Urban Affairs, the 
                Committee on Finance, the Committee on Appropriations, 
                and the Select Committee on Intelligence of the Senate.
            ``(2) Country of concern.--The term `country of concern' 
        includes--
                    ``(A) the Democratic People's Republic of North 
                Korea;
                    ``(B) the People's Republic of China, including the 
                Hong Kong Special Administrative Region and the Macau 
                Special Administrative Region;
                    ``(C) the Russian Federation;
                    ``(D) the Islamic Republic of Iran; and
                    ``(E) any other country that the President has 
                identified as engaging in a comprehensive, long-term 
                strategy that directs, facilitates, or otherwise 
                supports advancements in sensitive technologies and 
                products that are critical to the military, 
                intelligence, surveillance, or cyber-enabled 
                capabilities of the country to counter United States 
                capabilities in a way that threatens the national 
                security of the United States; and
                    ``(F) any other country the President determines 
                necessary to ensure a country described in any of 
                subparagraphs (A) through (E) is unable to circumvent 
                the provisions of this title and the regulations issued 
                pursuant to this title.
            ``(3) Covered activity.--
                    ``(A) In general.--Subject to such regulations as 
                may be prescribed in accordance with section 807, and 
                except as provided in subparagraph (B), the term 
                `covered activity' means any activity engaged in by a 
                United States person that involves--
                            ``(i) an acquisition by such United States 
                        person of an equity interest or contingent 
                        equity interest, or monetary capital 
                        contribution, in a covered foreign entity, 
                        directly or indirectly, by contractual 
                        commitment or otherwise;
                            ``(ii) an arrangement for an interest held 
                        by such United States person in the short- or 
                        long-term debt obligations of a covered foreign 
                        entity that includes governance rights that are 
                        characteristic of an equity investment, 
                        management, or other important rights;
                            ``(iii) the establishment of a wholly owned 
                        subsidiary in a country of concern, such as a 
                        greenfield investment, for the purpose of 
                        production, design, testing, manufacturing, 
                        fabrication, or development related to one or 
                        more covered sectors;
                            ``(iv) the establishment by such United 
                        States person of a joint venture in a country 
                        of concern or with a covered foreign entity for 
                        the purpose of production, design, testing, 
                        manufacturing, fabrication, or research, or 
                        other contractual or other commitments 
                        involving a covered foreign entity to jointly 
                        research and develop new innovation, including 
                        through the transfer of capital or intellectual 
                        property or other business proprietary 
                        information; or
                            ``(v) the acquisition by a United States 
                        person with a covered foreign entity of--
                                    ``(I) operational cooperation, such 
                                as through supply or support 
                                arrangements;
                                    ``(II) the right to board 
                                representation (as an observer, even if 
                                limited, or as a member) or an 
                                executive role (as may be defined 
                                through regulation) in a covered 
                                foreign entity;
                                    ``(III) the ability to direct or 
                                influence such operational decisions as 
                                may be defined through such 
                                regulations;
                                    ``(IV) formal governance 
                                representation in any operating 
                                affiliate, such as a portfolio company, 
                                of a covered foreign entity; or
                                    ``(V) a new relationship to share 
                                or provide business services, such as 
                                financial services, marketing services, 
                                maintenance, or assembly functions; or
                            ``(vi) knowingly directing transactions by 
                        foreign persons that would constitute covered 
                        activity if engaged in by a United States 
                        person.
                    ``(B) Exceptions.--The term `covered activity' does 
                not include--
                            ``(i) any transaction the value of which 
                        the President determines is de minimis, as 
                        defined in regulations prescribed in accordance 
                        with section 807;
                            ``(ii) any category of transactions that 
                        the President determines is in the national 
                        interest of the United States, as may be 
                        defined in regulations prescribed in accordance 
                        with section 807;
                            ``(iii) an investment in--
                                    ``(I) a publicly traded security 
                                (as such term is defined in section 
                                3(a)(10) of the Securities Exchange Act 
                                of 1934 (15 U.S.C. 78c(a)(10)));
                                    ``(II) an index fund, mutual fund, 
                                exchange-traded fund, or a similar 
                                instrument (including associated 
                                derivatives) offered by an investment 
                                company (as such term is defined in 
                                section 3(a)(1) of the Investment 
                                Company Act of 1940 (15 U.S.C. 80a-
                                3(a)(1))), or by a private investment 
                                fund; or
                                    ``(III) a venture capital fund, 
                                private equity fund, fund of funds, or 
                                other pooled investment funds, as the 
                                limited partner, in each case in which 
                                the limited partner's contribution is 
                                solely capital in a limited partnership 
                                structure and--
                                            ``(aa) the limited partner 
                                        cannot make managerial 
                                        decisions, is not responsible 
                                        for any debts beyond its 
                                        investment, and does not have 
                                        the ability (formally or 
                                        informally) to influence or 
                                        participate in the fund's or a 
                                        covered foreign entity's 
                                        decision making or operations; 
                                        or
                                            ``(bb) the investment is 
                                        below a de minimis threshold to 
                                        be determined by the President;
                            ``(iv) the acquisition of the equity or 
                        other interest owned or held by a covered 
                        foreign entity in an entity or assets located 
                        outside of a country of concern in which the 
                        United States person is acquiring all interests 
                        in the entity or assets held by covered foreign 
                        entity;
                            ``(v) an intracompany transfer of funds 
                        from a United States parent company to a 
                        subsidiary located in a country of concern, as 
                        specified in regulations prescribed in 
                        accordance with section 807;
                            ``(vi) a transaction made pursuant to a 
                        binding, uncalled capital commitment entered 
                        into before the date on which the regulations 
                        prescribed in accordance with section 807 take 
                        effect; or
                            ``(vii) any ordinary or administrative 
                        business transaction as may be defined in such 
                        regulations.
            ``(4) Covered foreign entity.--Subject to regulations 
        prescribed in accordance with section 807, the term `covered 
        foreign entity' means the following:
                    ``(A) Any entity that is incorporated in, has a 
                principal place of business in, or is organized under 
                the laws of a country of concern.
                    ``(B) Any entity the equity securities of which are 
                traded in the ordinary course of business on one or 
                more exchanges in a country of concern.
                    ``(C) Any agency or instrumentality of the 
                government of a country of concern.
                    ``(D) Any entity in which any entity described in 
                subparagraph (A), (B), or (C) holds, individually or in 
                the aggregate, directly or indirectly, an ownership 
                interest of greater than 50 percent.
                    ``(E) Any other entity that is not a United States 
                person and that meets such criteria as may be specified 
                by the President in such regulations prescribed in 
                accordance with section 807.
            ``(5) Covered sectors.--Subject to regulations prescribed 
        in accordance with section 807, the term `covered sectors' 
        includes sectors within the following areas:
                    ``(A) Semiconductors and microelectronics.
                    ``(B) Artificial intelligence.
                    ``(C) Quantum information science and technology.
                    ``(D) Hypersonics.
                    ``(E) Satellite-based communications.
                    ``(F) Networked laser scanning systems with both 
                military and civilian applications.
            ``(6) Lead agency.--The term `lead agency' means the 
        Federal agency to which the President delegates, pursuant to 
        section 802, the authorities provided under this title.
            ``(7) Party.--The term `party', with respect to an 
        activity, has the meaning given that term in regulations 
        prescribed in accordance with section 807.
            ``(8) United states person.--The term `United States 
        person' means--
                    ``(A) an individual who is 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 any foreign branch of such an entity.

``SEC. 802. DELEGATION OF AUTHORITIES.

    ``Except as provided by section 808, the President may delegate the 
authorities provided under this title to the head of any Federal agency 
the President determines appropriate in order to carry out the 
provisions of this title.

``SEC. 803. IDENTIFICATION OF CATEGORIES OF TECHNOLOGIES AND PRODUCTS 
              IN COVERED SECTORS THAT MAY POSE THREATS TO UNITED STATES 
              NATIONAL SECURITY.

    ``(a) In General.--Not later than one year after the date of the 
enactment of this title, the President shall--
            ``(1) identify categories of technologies and products in 
        covered sectors that may pose an acute threat to the national 
        security of the United States if developed or acquired by a 
        country of concern; and
            ``(2) publish a list of the categories of technologies and 
        products identified under paragraph (1) in the Federal 
        Register.
    ``(b) Annual Updates.--Not later than one year after the 
publication of the initial list required by subsection (a)(2), the 
President shall--
            ``(1) review the categories of technologies and products on 
        that list; and
            ``(2) publish an updated list of the categories of 
        technologies and products in the Federal Register if the list 
        has changed.

``SEC. 804. PROHIBITION ON COVERED ACTIVITIES.

    ``(a) In General.--The President may, on or after the date on which 
the initial list of categories of technologies and products is 
published in the Federal Register under section 803(a), prescribe, 
subject to public notice and comment, regulations to prohibit a United 
States person from engaging, directly or indirectly, in a covered 
activity involving a category of technologies and products on the list.
    ``(b) Elements.--Regulations prescribed under subsection (a) may--
            ``(1) require that a United States person take all 
        reasonable steps to prohibit and prevent any transaction by a 
        foreign entity under the control of the United States person 
        that would be a prohibited transaction if engaged in by a 
        United States person; and
            ``(2) exclude any transaction consisting of the acquisition 
        of an equity or other interest in an entity located outside a 
        country of concern, if the President has determined that the 
        government of the country in which that entity is established 
        or has its principal place of business has in place a program 
        for the restriction of certain activities involving countries 
        of concern that is comparable to the provisions provided for in 
        this title, after consideration of other relevant factors.

``SEC. 805. MANDATORY NOTIFICATION OF COVERED ACTIVITIES.

    ``(a) Mandatory Notification.--
            ``(1) In general.--Beginning on the date that is 90 days 
        after the date on which the initial list of categories of 
        technologies and products is published in the Federal Register 
        under section 803(a), a United States person engaging in a 
        covered activity described in paragraph (2), or that controls a 
        foreign entity engaging in an activity that would be a covered 
        activity described in paragraph (2) if engaged in by a United 
        States person, shall submit to the President a complete written 
        notification of the activity not later than 14 days after the 
        completion date of the activity.
            ``(2) Covered activities described.--A covered activity 
        described in this paragraph is a covered activity--
                    ``(A) involving a category of technologies and 
                products on the list published under section 803; and
                    ``(B) that is not prohibited pursuant to section 
                804.
            ``(3) Circulation of notification.--
                    ``(A) In general.--The President shall, upon 
                receipt of a notification under paragraph (1), promptly 
                inspect the notification for completeness.
                    ``(B) Incomplete notification.--If a notification 
                submitted under paragraph (1) is incomplete, the 
                President shall promptly inform the United States 
                person that submits the notification that the 
                notification is not complete and provide an explanation 
                for relevant material with respect to which the 
                notification is not complete.
            ``(4) Identification of non-notified activity.--The 
        President shall establish a process to identify a covered 
        activity described in paragraph (2) for which--
                    ``(A) a notification is not submitted to the 
                President under paragraph (1); and
                    ``(B) information is reasonably available.
    ``(b) Confidentiality of Information.--
            ``(1) In general.--Except as provided in paragraph (2), any 
        information or documentary material filed with the President or 
        the President's designee pursuant to this section shall be 
        exempt from disclosure under section 552(b)(3) of title 5, 
        United States Code, and no such information or documentary 
        material may be made public.
            ``(2) Exceptions.--Subject to appropriate confidentiality 
        and classification requirements, the exemption from disclosure 
        provided by paragraph (1) shall not prevent the disclosure of 
        the following:
                    ``(A) Information relevant to any administrative or 
                judicial action or proceeding.
                    ``(B) Information to Congress or any of the 
                appropriate committees or subcommittees of Congress.
                    ``(C) Information important to national security 
                analysis or actions of the President to any domestic 
                governmental entity, or to any foreign governmental 
                entity of an ally or partner of the United States, 
                under the exclusive direction and authorization of the 
                President or the President's designee, only to the 
                extent necessary for national security purposes, and 
                subject to appropriate confidentiality and 
                classification requirements.
                    ``(D) Information that the parties have consented 
                to be disclosed to third parties.
            ``(3) Applicability to congress.--Members of Congress, and 
        staff of either House of Congress or any committee of Congress, 
        are subject to the limitations on disclosure of information and 
        documentary material that are applicable under this subsection.

``SEC. 806. REPORTING REQUIREMENTS.

    ``(a) In General.--Not later than one year after the date on which 
the regulations prescribed under section 807 take effect, and not less 
frequently than annually thereafter, the President shall submit to the 
appropriate congressional committees a report that--
            ``(1) lists all notifications submitted under section 805 
        during the year preceding submission of the report, 
        disaggregated by--
                    ``(A) sector;
                    ``(B) covered activity;
                    ``(C) covered foreign entity; and
                    ``(D) country of concern;
            ``(2) includes an assessment of whether to amend the 
        regulations, including whether to amend the definition of 
        `covered sectors' to enhance national security;
            ``(3) provides additional context and information regarding 
        trends in the sectors, the types of covered activity, and the 
        countries involved in those notifications, including--
                    ``(A) the locations of the relevant covered foreign 
                entities; and
                    ``(B) the countries in which the United States 
                persons, or foreign entities controlled by a United 
                States person, involved in relevant covered activities 
                are located;
            ``(4) includes an assessment of the effectiveness of 
        measures imposed under this title, including actions taken by 
        the President as a result of the insight gained from the 
        information contained in notifications submitted under section 
        805; and
            ``(5) makes recommendations for--
                    ``(A) expanding existing Federal programs to 
                support the production or supply of technologies and 
                products in covered sectors in the United States, 
                including the potential of existing authorities to 
                address any related national security concerns; and
                    ``(B) the continuation, expansion, or modification 
                of the implementation and administration of this title.
    ``(b) Form.--Each report required by this section shall be 
submitted in unclassified form, but may include a classified annex.
    ``(c) Prohibition on Disclosure.--Information contained in a report 
required by this section may be withheld from disclosure only to the 
extent otherwise permitted by statute, except that all information 
included pursuant to subsection (a)(1) shall be withheld from public 
disclosure.

``SEC. 807. REQUIREMENT FOR REGULATIONS.

    ``(a) In General.--Not later than 180 days after the date on which 
the initial list of categories of technologies and products is 
published in the Federal Register pursuant to section 803(a), the 
President shall prescribe regulations to carry out this title in 
accordance with subchapter II of chapter 5 and chapter 7 of title 5 
(commonly known as the `Administrative Procedure Act').
    ``(b) Elements.--Regulations prescribed to carry out this title 
shall--
            ``(1) specify the types of activities that will be 
        considered to be covered activities, other than types of 
        activities described in section 801(3);
            ``(2) specify the technologies and products in covered 
        sectors with respect to which covered activities are prohibited 
        under section 804 or require a notification under section 805, 
        other than covered sectors specified in section 801(5);
            ``(3) provide for a process by which parties can ask 
        questions and get timely guidance as to whether a covered 
        activity is prohibited under section 804 or requires a 
        notification under section 805; and
            ``(4) clarify the terms used in this title, to maximize the 
        effectiveness of this title.
    ``(c) Public Notice and Comment.--Regulations issued pursuant to 
subsection (a) shall be subject to public notice and comment.
    ``(d) Low-Burden Regulations.--In prescribing regulations under 
this section, the President shall, to the extent practicable, structure 
the regulations--
            ``(1) to minimize the cost and complexity of compliance for 
        affected parties;
            ``(2) to ensure the benefits of the regulations outweigh 
        their costs;
            ``(3) to adopt the least burdensome alternative that 
        achieves regulatory objectives;
            ``(4) to prioritize transparency and stakeholder 
        involvement in the process of prescribing the regulations; and
            ``(5) to provide for regular review and streamlining of 
        regulations prescribed pursuant to this title to reduce 
        redundancy and complexity.

``SEC. 808. MULTILATERAL ENGAGEMENT AND COORDINATION.

    ``(a) In General.--The Secretary of State and the head of the lead 
agency, in coordination with the Secretary of Commerce, the United 
States Trade Representative, the Director of National Intelligence, and 
the heads of other relevant Federal agencies, as appropriate, should--
            ``(1) conduct bilateral and multilateral engagement with 
        the governments of countries that are allies and partners of 
        the United States to promote and increase coordination of 
        protocols and procedures to facilitate the effective 
        implementation of, and appropriate compliance with, the 
        prohibitions and notifications pursuant to this title;
            ``(2) upon adoption of protocols and procedures described 
        in paragraph (1), work with those governments to establish 
        mechanisms for sharing information, including trends, with 
        respect to such activities; and
            ``(3) work with and encourage the governments of certain 
        countries that are allies and partners of the United States to 
        develop similar mechanisms of their own.
    ``(b) Strategy for Multilateral Engagement and Coordination.--Not 
later than 180 days after the date of the enactment of this title, the 
Secretary of State and the head of the lead agency, in coordination 
with the heads of other relevant Federal agencies, should--
            ``(1) develop a strategy to work with the governments of 
        countries that are allies and partners of the United States to 
        develop mechanisms that are comparable to the prohibitions and 
        notifications pursuant to this title; and
            ``(2) assess opportunities to provide technical assistance 
        to those countries with respect to the development of those 
        mechanisms.
    ``(c) Report.--Not later than one year after the date of the 
enactment of this title, and annually thereafter for 4 years, the 
Secretary of State shall submit to the appropriate congressional 
committees a report that includes--
            ``(1) a discussion of any strategy developed pursuant to 
        subsection (b)(1), including key tools and objectives for the 
        development of comparable mechanisms by the governments of 
        countries that are allies and partners of the United States;
            ``(2) a list of countries that are allies and partners of 
        the United States to target for cooperation in developing their 
        own screening programs;
            ``(3) the status of the implementation and outcomes of the 
        strategy; and
            ``(4) a description of impediments to the establishment of 
        comparable mechanisms by governments of countries that are 
        allies and partners of the United States.

``SEC. 809. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated, for each of the first 2 
fiscal years beginning on or after the date of the enactment of this 
title, such sums as may be necessary to carry out this title, including 
to provide outreach to industry and persons affected by this title. 
Such amounts shall be derived from amounts otherwise authorized to be 
appropriated to the President.

``SEC. 810. HIRING AUTHORITY.

    ``(a) In General.--The head of lead agency may appoint, without 
regard to the provisions of sections 3309 through 3318 of title 5, 
United States Code, not more than 25 candidates directly to positions 
in the competitive service (as defined in section 2102 of that title) 
in that agency.
    ``(b) Primary Responsibility.--The primary responsibility of 
individuals in positions authorized under subsection (a) shall be to 
administer this title.

``SEC. 811. PENALTIES AND ENFORCEMENT.

    ``(a) Unlawful Acts.--It shall be unlawful for a United States 
person to violate, attempt to violate, conspire to violate, or cause a 
violation of any license, order, regulation, or prohibition issued 
under this title.
    ``(b) Civil Penalties.--
            ``(1) Penalties.--A civil penalty may be imposed on any 
        person who commits an unlawful act described in subsection (a) 
        in an amount not to exceed the greater of--
                    ``(A) $5,000,000; or
                    ``(B) an amount that is twice the amount of the 
                covered activity that is the basis of the violation 
                with respect to which the penalty is imposed.
    ``(c) Criminal Penalties.--A person who willfully commits, 
willfully attempts to commit, or willfully conspires to commit, or aids 
or abets in the commission of, an unlawful act described in subsection 
(a) shall, upon conviction, be fined not more than $1,000,000, or if an 
individual, may be imprisoned for not more than 20 years, or both.
    ``(d) Enforcement.--The Attorney General may seek appropriate 
relief, including a temporary or permanent injunction, restraining 
order, divestment relief, or other such other order as the Attorney 
General may determine to be proper, in the district courts of the 
United States in order to implement and enforce this title and any 
regulation thereunder.

``SEC. 812. RULE OF CONSTRUCTION.

    ``Nothing in this title may be construed to--
            ``(1) restrain or deter United States activities abroad if 
        such activities do not pose a risk to the national security of 
        the United States; or
            ``(2) alter or negate the authority of the President under 
        any authority, process, regulation, investigation, enforcement 
        measure, or review provided by or established under any other 
        provision of Federal law, or any other authority of the 
        President or Congress under the Constitution of the United 
        States.

``SEC. 813. NATIONAL INTEREST WAIVER.

    ``(a) In General.--Subject to subsection (b), the President is 
authorized to exempt from any applicable prohibition or notification 
requirement under this title any activity determined by the President, 
in consultation with the heads of relevant Federal agencies, as 
appropriate, to be in the national interest of the United States.
    ``(b) Congressional Notification.--The President shall--
            ``(1) notify the appropriate congressional committees not 
        later than 48 hours after issuing a waiver under subsection 
        (a); and
            ``(2) include in such notification an identification of the 
        national interest justifying the use of the waiver.''.

SEC. 5. LIMITATION ON TRADE AUTHORITIES PROCEDURES RELATING TO 
              REQUIREMENTS ON CONTENT OF GOODS FROM NONMARKET ECONOMY 
              COUNTRIES.

    Section 106(b) of the Bipartisan Congressional Trade Priorities and 
Accountability Act of 2015 (19 U.S.C. 4205(b)) is amended by adding at 
the end the following:
            ``(7) Limitations on procedures relating to origination of 
        content of goods from nonmarket economy countries.--
                    ``(A) In general.--The trade authorities procedures 
                shall not apply to an implementing bill submitted with 
                respect to a trade agreement or trade agreements 
                entered into under section 103(b) unless the rules of 
                origin requirements under such agreement or 
                agreements--
                            ``(i) with respect to rules of origin based 
                        on value content of a good, require that, of 
                        the content of a good qualifying for 
                        preferential treatment under the agreement or 
                        agreements that does not originate (as 
                        specified in those rules) in a country that is 
                        party to the agreement or agreements--
                                    ``(I) during the 5-year period 
                                following the entry into force of the 
                                agreement or agreements, not more than 
                                20 percent of that content may 
                                originate in a nonmarket economy 
                                country; and
                                    ``(II) after the period specified 
                                in subclause (I), not more than 10 
                                percent of that content may originate 
                                in a nonmarket economy country; and
                            ``(ii) with respect to rules of origin that 
                        are not based on value content of a good, are 
                        consistent with the requirements under clause 
                        (i) based on processing requirements or tariff 
                        shifts as opposed to value content.
                    ``(B) Nonmarket economy country defined.--In this 
                paragraph, the term `nonmarket economy country' has the 
                meaning given that term in section 771(18) of the 
                Tariff Act of 1930 (19 U.S.C. 1677(18)).''.

SEC. 6. STRATEGY AND OUTREACH ON RISKS POSED BY PEOPLE'S REPUBLIC OF 
              CHINA SMARTPORT TECHNOLOGY.

    (a) Strategy and Outreach Required.--The Director of the National 
Counterintelligence and Security Center shall develop a strategy and 
conduct outreach to United States industry, including shipping 
companies, port operators, and logistics firms, on the risks of 
smartport technology of the People's Republic of China and other 
related risks posed by entities of the People's Republic of China, 
including LOGINK, China Ocean Shipping Company, Limited (COSCO), China 
Communications Construction Company, Limited (CCCC), China Media Group 
(CMG), and Shanghai Zhenhua Heavy Industries Company Limited (ZPMC), to 
the national security of the United States, the security of United 
States supply chains, and commercial activity, including with respect 
to delays, interruption, and lockout of access to systems and 
technologies that enable the free flow of commerce.
    (b) Consistency With Executive Orders and Other Statutory 
Authorities.--The Director shall carry out subsection (a) in a manner 
that is consistent with the following:
            (1) Part 6 of title 33, Code of Federal Regulations, as 
        amended by Executive Order 14116 (89 Fed. Reg. 13971; relating 
        to amending regulations relating to the safeguarding of 
        vessels, harbors, ports, and waterfront facilities of the 
        United States).
            (2) Executive Order 14017 (86 Fed. Reg. 11849; relating to 
        America's supply chains), or successor order.
            (3) Section 825 of the National Defense Authorization Act 
        for Fiscal Year 2024 (Public Law 118-31).
    (c) Coordination.--The Director shall carry out subsection (a) in 
coordination with the Commandant of the U.S. Coast Guard, the Director 
of the Federal Bureau of Investigation, the Commander of the Office of 
Naval Intelligence, and such other heads of Federal agencies as the 
Director considers appropriate.
                                 <all>