[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
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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