[House Document 118-60]
[From the U.S. Government Publishing Office]




118th Congress, 1st Session - - - - - - - - - - - - - House Document 118-60

 
   ADDRESSING UNITED STATES INVESTMENTS IN CERTAIN NATIONAL SECURITY 
           TECHNOLOGIES AND PRODUCTS IN COUNTRIES OF CONCERN

                               __________

                             COMMUNICATION

                                  from

                     THE PRESIDENT OF THE UNITED STATES

                              transmitting

   ADDRESSING UNITED STATES INVESTMENTS IN CERTAIN NATIONAL SECURITY 
   TECHNOLOGIES AND PRODUCTS IN COUNTRIES OF CONCERN, PURSUANT TO 50 
U.S.C. 1703(b); PUBLIC LAW 95-223, SEC. 204(b); (91 STAT. 1627) AND 50 
    U.S.C. 1641(b); PUBLIC LAW 94-412, SEC. 401(b); (90 STAT. 1257)




  August 11, 2023.--Referred to the Committee on Foreign Affairs and 
                         ordered to be printed
                                           The White House,
                                        Washington, August 9, 2023.
Hon. Kevin McCarthy,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: Pursuant to the International Emergency 
Economic Powers Act (50 U.S.C. 1701 et seq.), the National 
Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of 
title 3, United States Code, I hereby report that I have issued 
an Executive Order declaring a national emergency to deal with 
the threat of advancement by countries of concern in sensitive 
technologies and products critical to the military, 
intelligence, surveillance, or cyber-enabled capabilities of 
such countries. I find that this threat constitutes an unusual 
and extraordinary threat to the national security of the United 
States, which has its source in whole or substantial part 
outside the United States, and that certain United States 
investments risk exacerbating this threat.
    I find that countries of concern are engaged in 
comprehensive, long-term strategies that direct, facilitate, or 
otherwise support advancements in sensitive technologies and 
products that are critical to such countries' military, 
intelligence, surveillance, or cyber-enabled capabilities. 
Moreover, these countries eliminate barriers between civilian 
and commercial sectors and military and defense industrial 
sectors, not just through research and development, but also by 
acquiring and diverting the world's cutting-edge technologies, 
for the purposes of achieving military dominance. Rapid 
advancement in semiconductors and microelectronics, quantum 
information technologies, and artificial intelligence 
capabilities by these countries significantly enhances their 
ability to conduct activities that threaten the national 
security of the United States. I have identified in an Annex to 
this Executive Order one country, the People's Republic of 
China, along with the Special Administrative Region of Hong 
Kong and the Special Administrative Region of Macau, as a 
country of concern for purposes of this Executive Order.
    As part of this strategy of advancing the development of 
these sensitive technologies and products, countries of concern 
are exploiting or have the ability to exploit certain United 
States outbound investments, including certain intangible 
benefits that often accompany United States investments and 
that help companies succeed. The commitment of the United 
States to open investment is a cornerstone of our economic 
policy and provides the United States with substantial 
benefits. However, certain United States investments may 
accelerate and increase the success of the development of 
sensitive technologies and products in countries that develop 
them to counter United States and allied capabilities.
    Through this Executive Order, I am directing the Secretary 
of the Treasury to issue regulations that require United States 
persons to provide notification to the Department of the 
Treasury of information relative to certain transactions 
involving covered foreign persons and that prohibit United 
States persons from engaging in certain other transactions 
involving covered foreign persons.
    I am enclosing a copy of the Executive Order I have issued.
            Sincerely,
                                               Joseph R. Biden, Jr.

                            Executive Order

                              ----------                              


   Addressing United States Investments in Certain National Security 
           Technologies and Products in Countries of Concern

    By the authority vested in me as President by the 
Constitution and the laws of the United States of America, 
including the International Emergency Economic Powers Act (50 
U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 
U.S.C. 1601 et seq.) (NEA), and section 301 of title 3, United 
States Code,
    I, JOSEPH R. BIDEN JR., President of the United States of 
America, find that countries of concern are engaged in 
comprehensive, long-term strategies that direct, facilitate, or 
otherwise support advancements in sensitive technologies and 
products that are critical to such countries' military, 
intelligence, surveillance, or cyber-enabled capabilities. 
Moreover, these countries eliminate barriers between civilian 
and commercial sectors and military and defense industrial 
sectors, not just through research and development, but also by 
acquiring and diverting the world's cutting-edge technologies, 
for the purposes of achieving military dominance. Rapid 
advancement in semiconductors and microelectronics, quantum 
information technologies, and artificial intelligence 
capabilities by these countries significantly enhances their 
ability to conduct activities that threaten the national 
security of the United States. Advancements in sensitive 
technologies and products in these sectors will accelerate the 
development of advanced computational capabilities that will 
enable new applications that pose significant national security 
risks, such as the development of more sophisticated weapons 
systems, breaking of cryptographic codes, and other 
applications that could provide these countries with military 
advantages.
    As part of this strategy of advancing the development of 
these sensitive technologies and products, countries of concern 
are exploiting or have the ability to exploit certain United 
States outbound investments, including certain intangible 
benefits that often accompany United States investments and 
that help companies succeed, such as enhanced standing and 
prominence, managerial assistance, investment and talent 
networks, market access, and enhanced access to additional 
financing. The commitment of the United States to open 
investment is a cornerstone of our economic policy and provides 
the United States with substantial benefits. Open global 
capital flows create valuable economic opportunities and 
promote competitiveness, innovation, and productivity, and the 
United States supports cross-border investment, where not 
inconsistent with the protection of United States national 
security interests. However, certain United States investments 
may accelerate and increase the success of the development of 
sensitive technologies and products in countries that develop 
them to counter United States and allied capabilities.
    I therefore find that advancement by countries of concern 
in sensitive technologies and products critical for the 
military, intelligence, surveillance, or cyber-enabled 
capabilities of such countries constitutes an unusual and 
extraordinary threat to the national security of the United 
States, which has its source in whole or substantial part 
outside the United States, and that certain United States 
investments risk exacerbating this threat. I hereby declare a 
national emergency to deal with this threat.
    Accordingly, I hereby order:
    Section 1. Notifiable and Prohibited Transactions. (a) To 
assist in addressing the national emergency declared in this 
order, the Secretary of the Treasury (Secretary), in 
consultation with the Secretary of Commerce and, as 
appropriate, the heads of other relevant executive departments 
and agencies (agencies), shall issue, subject to public notice 
and comment, regulations that require United States persons to 
provide notification of information relative to certain 
transactions involving covered foreign persons (notifiable 
transactions) and that prohibit United States persons from 
engaging in certain other transactions involving covered 
foreign persons (prohibited transactions).
    (b) The regulations issued under this section shall 
identify categories of notifiable transactions that involve 
covered national security technologies and products that the 
Secretary, in consultation with the Secretary of Commerce and, 
as appropriate, the heads of other relevant agencies, 
determines may contribute to the threat to the national 
security of the United States identified in this order. The 
regulations shall require United States persons to notify the 
Department of the Treasury of each such transaction and include 
relevant information on the transaction in each such 
notification.
    (c) The regulations issued under this section shall 
identify categories of prohibited transactions that involve 
covered national security technologies and products that the 
Secretary, in consultation with the Secretary of Commerce and, 
as appropriate, the heads of other relevant agencies, 
determines pose a particularly acute national security threat 
because of their potential to significantly advance the 
military, intelligence, surveillance, or cyber-enabled 
capabilities of countries of concern. The regulations shall 
prohibit United States persons from engaging, directly or 
indirectly, in such transactions.
    Sec. 2. Duties of the Secretary. In carrying out this 
order, the Secretary shall, as appropriate:
    (a) communicate with the Congress and the public with 
respect to the implementation of this order;
    (b) consult with the Secretary of Commerce on industry 
engagement and analysis of notified transactions;
    (c) consult with the Secretary of State, the Secretary of 
Defense, the Secretary of Commerce, the Secretary of Energy, 
and the Director of National Intelligence on the implications 
for military, intelligence, surveillance, or cyber-enabled 
capabilities of covered national security technologies and 
products and potential covered national security technologies 
and products;
    (d) engage, together with the Secretary of State and the 
Secretary of Commerce, with allies and partners regarding the 
national security risks posed by countries of concern advancing 
covered national security technologies and products;
    (e) consult with the Secretary of State on foreign policy 
considerations related to the implementation of this order, 
including but not limited to the issuance and amendment of 
regulations; and
    (f) investigate, in consultation with the heads of relevant 
agencies, as appropriate, violations of this order or the 
regulations issued under this order and pursue available civil 
penalties for such violations.
    Sec. 3. Program Development. Within 1 year of the effective 
date of the regulations issued under section 1 of this order, 
the Secretary, in consultation with the Secretary of Commerce 
and, as appropriate, the heads of other relevant agencies, 
shall assess whether to amend the regulations, including 
whether to adjust the definition of ``covered national security 
technologies and products'' to add or remove technologies and 
products in the semiconductors and microelectronics, quantum 
information technologies, and artificial intelligence sectors. 
The Secretary, in consultation with the Secretary of Commerce 
and, as appropriate, the heads of other relevant agencies, 
shall periodically review the effectiveness of the regulations 
thereafter.
    Sec. 4. Reports to the President. Within 1 year of the 
effective date of the regulations issued under section 1 of 
this order and, as appropriate but no less than annually 
thereafter, the Secretary, in coordination with the Secretary 
of Commerce and in consultation with the heads of other 
relevant agencies and the Director of the Office of Management 
and Budget, as appropriate, shall provide the President, 
through the Assistant to the President for National Security 
Affairs:
    (a) to the extent practicable, an assessment of the 
effectiveness of the measures imposed under this order in 
addressing threats to the national security of the United 
States described in this order; advancements by the countries 
of concern in covered national security technologies and 
products critical for such countries' military, intelligence, 
surveillance, or cyber-enabled capabilities; aggregate sector 
trends evident in notifiable transactions and related capital 
flows in covered national security technologies and products, 
drawing on analysis provided by the Secretary of Commerce, the 
Director of National Intelligence, and the heads of other 
relevant agencies, as appropriate; and other relevant 
information obtained through the implementation of this order; 
and
    (b) recommendations, as appropriate, regarding:
          (i) modifications to this order, including the 
        addition or removal of identified sectors or countries 
        of concern, and any other modifications to avoid 
        circumvention of this order and enhance its 
        effectiveness; and
          (ii) the establishment or expansion of other Federal 
        programs relevant to the covered national security 
        technologies and products, including with respect to 
        whether any existing legal authorities should be used 
        or new action should be taken to address the threat to 
        the national security of the United States identified 
        in this order.
    Sec. 5. Reports to the Congress. The Secretary is 
authorized to submit recurring and final reports to the 
Congress on the national emergency declared in this order, 
consistent with section 40l(c) of the NEA (50 U.S.C. 1641(c)) 
and section 204(c) of IEEPA (50 U.S.C. 1703(c)).
    Sec. 6. Official United States Government Business. Nothing 
in this order or the regulations issued under this order shall 
prohibit transactions for the conduct of the official business 
of the United States Government by employees, grantees, or 
contractors thereof.
    Sec 7. Confidentiality. The regulations issued by the 
Secretary under this order shall address the confidentiality of 
information or documentary material submitted pursuant to this 
order, consistent with applicable law.
    Sec. 8. Additional Notifications and Prohibitions. (a) Any 
conspiracy formed to violate any regulation issued under this 
order is prohibited.
    (b) Subject to the regulations issued under this order, any 
action that evades or avoids, has the purpose of evading or 
avoiding, causes a violation of, or attempts to violate any 
ofthe prohibitions set forth in this order or any regulation issued 
under this order is prohibited.
    (c) In the regulations issued under this order, the 
Secretary may prohibit United States persons from knowingly 
directing transactions if such transactions would be prohibited 
transactions pursuant to this order if engaged in by a United 
States person.
    (d) In the regulations issued under this order, the 
Secretary may require United States persons to:
          (i) provide notification to the Department of the 
        Treasury of any transaction by a foreign entity 
        controlled by such United States person that would be a 
        notifiable transaction if engaged in by a United States 
        person; and
          (ii) take all reasonable steps to prohibit and 
        prevent any transaction by a foreign entity controlled 
        by such United States person that would be a prohibited 
        transaction if engaged in by a United States person.
    Sec. 9. Definitions. For purposes of this order:
    (a) the term ``country of concern'' means a country or 
territory listed in the Annex to this order that the President 
has identified to be engaging in a comprehensive, long-term 
strategy that directs, facilitates, or otherwise supports 
advancements in sensitive technologies and products that are 
critical to such country's military, intelligence, 
surveillance, or cyber-enabled capabilities to counter United 
States capabilities in a way that threatens the national 
security of the United States;
    (b) the term ``covered foreign person'' means a person of a 
country of concern who or that is engaged in activities, as 
identified in the regulations issued under this order, 
involving one or more covered national security technologies 
and products;
    (c) the term ``covered national security technologies and 
products'' means sensitive technologies and products in the 
semiconductors and microelectronics, quantum information 
technologies, and artificial intelligence sectors that are 
critical for the military, intelligence, surveillance, or 
cyber-enabled capabilities of a country of concern, as 
determined by the Secretary in consultation with the Secretary 
of Commerce and, as appropriate, the heads of other relevant 
agencies. Where applicable, ``covered national security 
technologies and products'' may be limited by reference to 
certain end-uses of those technologies or products;
    (d) the term ``entity'' means a partnership, association, 
trust, joint venture, corporation, group, subgroup, or other 
organization;
    (e) the term ``person of a country of concern'' means:
          (i) any individual that is not a United States person 
        and is a citizen or permanent resident of a country of 
        concern;
          (ii) any entity organized under the laws of a country 
        of concern or with a principal place of business in a 
        country of concern;
          (iii) the government of each country of concern, 
        including any political subdivision, political party, 
        agency, or instrumentality thereof, or any person 
        owned, controlled, or directed by, or acting for or on 
        behalf of the government of such country of concern; or
          (iv) any entity owned by a person identified in 
        subsections (e) (i) through (e) (iii) of this section;
    (f) the term ``person'' means an individual or entity;
    (g) the term ``relevant agencies'' includes the Departments 
of State, Defense, Justice, Commerce, Energy, and Homeland 
Security, the Office of the United States Trade Representative, 
the Office of Science and Technology Policy, the Office of the 
Director of National Intelligence, the Office of the National 
Cyber Director, and any other department, agency, or office the 
Secretary determines appropriate; and
    (h) the term ``United States person'' means any United 
States citizen, lawful permanent resident, entity organized 
under the laws of the United States or any jurisdiction within 
the United States, including any foreign branches of any such 
entity, and any person in the United States.
    Sec. 10. General Provisions. (a) The Secretary is 
authorized to take such actions and to employ all powers 
granted to the President by IEEPA as may be necessary to carry 
out the purposes of this order, including to:
          (i) promulgate rules and regulations, including 
        elaborating upon the definitions contained in section 9 
        of this order for purposes of the regulations issued 
        under this order and further prescribing definitions of 
        other terms as necessary to implement this order;
          (ii) investigate and make requests for information 
        relative to notifiable or prohibited transactions from 
        parties to such transactions or other relevant persons 
        at any time, including through the use of civil 
        administrative subpoenas as appropriate;
          (iii) nullify, void, or otherwise compel the 
        divestment of any prohibited transaction entered into 
        after the effective date of the regulations issuedunder 
this order; and
          (iv) refer potential criminal violations of this 
        order or the regulations issued under this order to the 
        Attorney General.
    (b) Notwithstanding any other provision of this order, the 
Secretary is authorized to exempt from applicable prohibitions 
or notification requirements any transaction or transactions 
determined by the Secretary, in consultation with the heads of 
relevant agencies, as appropriate, to be in the national 
interest of the United States.
    (c) To the extent consistent with applicable law, the 
Secretary may redelegate any functions authorized hereunder 
within the Department of the Treasury. All agencies of the 
United States Government shall take all appropriate measures 
within their authority to carry out the provisions of this 
order.
    (d) If any provision of this order, or the application of 
any provision of this order to any person or circumstance, is 
held to be invalid, the remainder of this order and its 
application to any other person or circumstance shall not be 
affected thereby.
    (e) Nothing in this order shall be construed to impair or 
otherwise affect:
          (i) the authority granted by law to an executive 
        department or agency, or the head thereof; or
          (ii) the functions of the Director of the Office of 
        Management and Budget relating to budgetary, 
        administrative, or legislative proposals.
    (f) This order shall be implemented consistent with 
applicable law and subject to the availability of 
appropriations.
    (g) This order is not intended to, and does not, create any 
right or benefit, substantive or procedural, enforceable at law 
or in equity by any party against the United States, its 
departments, agencies, or entities, its officers, employees, or 
agents, or any other person.

                                               Joseph R. Biden, Jr.
    The White House, August 9, 2023.

                                 Annex

                     THE PEOPLE'S REPUBLIC OF CHINA

             THE SPECIAL ADMINISTRATIVE REGION OF HONG KONG

               THE SPECIAL ADMINISTRATIVE REGION OF MACAU