[Congressional Record Volume 163, Number 146 (Monday, September 11, 2017)]
[Senate]
[Pages S5148-S5151]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 926. Mr. McCAIN (for Mr. Rubio) submitted an amendment intended to
be proposed by Mr. McCain to the bill H.R. 2810, to authorize
appropriations for fiscal year 2018 for military activities of the
Department of Defense, for military construction, and for defense
activities of the Department of Energy, to prescribe military personnel
strengths for such fiscal year, and for other purposes; which was
ordered to lie on the table; as follows:
At the appropriate place, insert the following:
Subtitle __--South China Sea and East China Sea Sanctions Act of 2017
SEC. __01. SHORT TITLE.
This subtitle may be cited as the ``South China Sea and
East China Sea Sanctions Act of 2017''.
SEC. __02. FINDINGS.
Congress makes the following findings:
(1) According to the Asia-Pacific Maritime Security
Strategy issued by the Department of Defense in August 2015,
``Although the United States takes no position on competing
sovereignty claims to land features in the region, all such
claims must be based upon land (which in the case of islands
means naturally formed areas of land that are above water at
high tide), and all maritime claims must derive from such
land in accordance with international law.''.
(2) According to the annual report of the Department of
Defense to Congress on the military power of the People's
Republic of China submitted in April 2016, ``Throughout 2015,
China continued to assert sovereignty claims over features in
the East and South China Seas. In the East China Sea, China
continued to use maritime law enforcement ships and aircraft
to patrol near the Senkaku (Diaoyu) Islands in order to
challenge Japan's claim. In the South China Sea, China paused
its land reclamation effort in the Spratly Islands in late
2015 after adding more than 3,200 acres of land to the seven
features it occupies in the archipelago. Although these
artificial islands do not provide China with any additional
territorial or maritime rights within the South China Sea,
China will be able to use them as persistent civil-military
bases to enhance its long-term presence in the South China
Sea significantly.''.
(3) On May 30, 2015, at the Shangri-la Dialogue of the
International Institute for Strategic Studies, Secretary of
Defense Ashton Carter stated that ``with its actions in the
South China Sea, China is out of step with both the
international rules and norms that underscore the Asia-
Pacific's security architecture, and the regional consensus
that favors diplomacy and opposes coercion''.
(4) On July 24, 2015, Admiral Harry Harris, Jr., noted at a
forum in Colorado that each year more than $5,300,000,000,000
in global sea-based trade passes through the South China Sea.
(5) On June 4, 2016, at the Shangri-la Dialogue, Secretary
of Defense Ashton Carter stated: ``[T]he United States will
stand with regional partners to uphold core principles, like
freedom of navigation and overflight and the peaceful
resolution of disputes through legal means and in accordance
with international law. As I affirmed here last year, and
America's Freedom of Navigation Operations in the South China
Sea have demonstrated, the United States will continue to
fly, sail and operate wherever international law allows, so
that everyone in the region can do the same.''.
(6) On July 12, 2016, the Permanent Court of Arbitration's
Tribunal organized pursuant to the United Nations Convention
on the Law of the Sea issued its unanimous award in the
arbitration instituted by Republic of the Philippines against
the People's Republic of China. The Tribunal noted that its
award is final and binding under that Convention.
(7) Also according to the award, the Tribunal ``concluded
that, to the extent China had historical rights to resources
in the waters of the South China Sea, such rights were
extinguished to the extent they were incompatible with the
exclusive economic zones provided for in the Convention. The
Tribunal concluded that there was no legal basis for China to
claim historic rights to resources within the sea areas
falling within the `nine-dash line'.''.
(8) Also according to the award, the Tribunal ``held that
the Spratly Islands cannot generate maritime zones
collectively as a unit. Having found that none of the
features claimed by China was capable of generating an
exclusive economic zone, the Tribunal found that it could--
without delimiting a boundary--declare that certain sea areas
are within the exclusive economic zone of the Philippines,
because those areas are not overlapped by any possible
entitlement of China.''.
(9) Also according to the award, the Tribunal ``found that
China had violated the Philippines' sovereign rights in its
exclusive economic zone by (a) interfering with Philippine
fishing and petroleum exploration, (b) constructing
artificial islands and (c) failing to prevent Chinese
fishermen from fishing in the zone. The Tribunal also held
that fishermen from the Philippines (like those from China)
had traditional fishing rights at Scarborough Shoal and that
China had interfered with these rights in restricting access.
The Tribunal further held that Chinese law enforcement
vessels had unlawfully created a serious risk of collision
when they physically obstructed Philippine vessels.''.
(10) On July 12, 2016, the Ministry of Foreign Affairs of
the People's Republic of China issued a statement that China
``declares that the [Tribunal] award is null and void and has
no binding force. China neither accepts nor recognizes it. .
. . China's territorial sovereignty and maritime rights and
interests in the South China Sea shall under no circumstances
be affected by those awards. China opposes and will never
accept any claim or action based on those awards.''.
(11) On July 12, 2016, the Government of the People's
Republic of China issued the fifth statement in the name of
that Government since 1979 that--
[[Page S5149]]
(A) stated that the People's Republic of China has
sovereignty over the 4 rocks and shoals in the South China
Sea;
(B) claims internal waters, territorial seas, contiguous
zones, one or more exclusive economic zones, and a
continental shelf based on that sovereignty claim; and
(C) continues to claim historic rights in the South China
Sea.
(12) On July 12, 2016, Assistant Secretary of State and
Department of State Spokesperson John Kirby noted that the
``United States strongly supports the rule of law. We support
efforts to resolve territorial and maritime disputes in the
South China Sea peacefully, including through arbitration. .
. . we urge all claimants to avoid provocative statements or
actions. This decision can and should serve as a new
opportunity to renew efforts to address maritime disputes
peacefully.''.
(13) On July 13, 2016, the Vice Foreign Minister of the
People's Republic of China, Liu Zhenmin, said that declaring
an air defense identification zone in the South China Sea
would depend on the threat China faces and stated that ``[i]f
our security is threatened, we of course have the right to
set it up''.
(14) On July 18, 2016, the People's Liberation Army Air
Force of the People's Republic of China stated that it had
conducted a ``combat air patrol'' over the South China Sea
and that it would become ``regular practice'' in the future.
A spokesperson stated that the People's Liberation Army Air
Force ``will firmly defend national sovereignty, security and
maritime interests, safeguard regional peace and stability,
and cope with various threats and challenges''.
(15) On August 2, 2016, the Supreme People's Court of the
People's Republic of China issued a judicial interpretation
that people caught illegally fishing in Chinese waters could
be jailed for up to one year.
(16) In the Agreement concerning the Ryukyu Islands and the
Daito Islands with Related Arrangements, signed at Washington
and Tokyo June 17, 1971 (23 UST 446), between the United
States and Japan (commonly referred to as the ``Okinawa
Reversion Treaty''), the United States agreed to apply the
Treaty of Mutual Cooperation and Security, with Agreed Minute
and Exchanges of Notes (11 UST 1632), signed at Washington
January 19, 1961, between the United States and Japan, to the
area covered by the Okinawa Reversion Treaty, including the
Senkaku Islands.
(17) In April 2014, President Barack Obama stated, ``The
policy of the United States is clear--the Senkaku Islands are
administered by Japan and therefore fall within the scope of
Article 5 of the U.S.-Japan Treaty of Mutual Cooperation and
Security. And we oppose any unilateral attempts to undermine
Japan's administration of these islands.''.
(18) In February 2017, President Donald Trump and Japanese
Prime Minister Shinzo Abe issued a joint statement that
``affirmed that Article V of the U.S.-Japan Treaty of Mutual
Cooperation and Security covers the Senkaku Islands''.
SEC. __03. DEFINITIONS.
In this subtitle:
(1) Account; correspondent account; payable-through
account.--The terms ``account'', ``correspondent account'',
and ``payable-through account'' have the meanings given those
terms in section 5318A of title 31, United States Code.
(2) Alien.--The term ``alien'' has the meaning given that
term in section 101(a) of the Immigration and Nationality Act
(8 U.S.C. 1101(a)).
(3) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Foreign Relations, the Committee on
Armed Services, the Committee on Banking, Housing, and Urban
Affairs, and the Select Committee on Intelligence of the
Senate; and
(B) the Committee on Foreign Affairs, the Committee on
Armed Services, the Committee on Financial Services, and the
Permanent Select Committee on Intelligence of the House of
Representatives.
(4) Chinese person.--The term ``Chinese person'' means--
(A) an individual who is a citizen or national of the
People's Republic of China; or
(B) an entity organized under the laws of the People's
Republic of China or otherwise subject to the jurisdiction of
the Government of the People's Republic of China.
(5) Financial institution.--The term ``financial
institution'' means a financial institution specified in
subparagraph (A), (B), (C), (D), (E), (F), (G), (H), (I),
(J), (K), (M), (N), (P), (R), (T), (Y), or (Z) of section
5312(a)(2) of title 31, United States Code.
(6) Foreign financial institution.--The term ``foreign
financial institution'' has the meaning given that term in
section 1010.605 of title 31, Code of Federal Regulations (or
any corresponding similar regulation or ruling).
(7) Knowingly.--The term ``knowingly'', with respect to
conduct, a circumstance, or a result, means that a person has
actual knowledge, or should have known, of the conduct, the
circumstance, or the result.
(8) Person.--The term ``person'' means any individual or
entity.
(9) United states person.--The term ``United States
person'' means--
(A) 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 a
foreign branch of such an entity.
SEC. __04. POLICY OF THE UNITED STATES WITH RESPECT TO THE
SOUTH CHINA SEA AND THE EAST CHINA SEA.
It is the policy of the United States--
(1) to support the principle that disputes between
countries should be resolved peacefully consistent with
international law;
(2) to reaffirm its unwavering commitment and support for
allies and partners in the Asia-Pacific region, including
longstanding United States policy--
(A) regarding Article V of the Mutual Defense Treaty,
signed at Washington August 30, 1951 (3 UST 3947), between
the United States and the Philippines; and
(B) that Article V of the Mutual Defense Assistance
Agreement, with Annexes, signed at Tokyo March 8, 1954 (5 UST
661), between the United States and Japan, applies to the
Senkaku Islands, which are administered by Japan; and
(3) to support the principle of freedom of navigation and
overflight and to continue to use the sea and airspace
wherever international law allows.
SEC. __05. SENSE OF CONGRESS WITH RESPECT TO THE SOUTH CHINA
SEA AND THE EAST CHINA SEA.
It is the sense of Congress that--
(1) the United States--
(A) opposes all claims in the maritime domains that
impinges on the rights, freedoms, and lawful use of the seas
that belong to all countries;
(B) opposes unilateral actions by the government of any
country seeking to change the status quo in the South China
Sea through the use of coercion, intimidation, or military
force;
(C) opposes actions by the government of any country to
interfere in any way in the free use of waters and airspace
in the South China Sea or East China Sea;
(D) opposes actions by the government of any country to
prevent any other country from exercising its sovereign
rights to the resources of the exclusive economic zone and
continental shelf by making claims that have no support in
international law; and
(E) upholds the principle that territorial and maritime
claims, including with respect to territorial waters or
territorial seas, must be derived from land features and
otherwise comport with international law;
(2) the People's Republic of China should not continue to
pursue illegitimate claims and to militarize an area that is
essential to global security;
(3) the United States should--
(A) continue and expand freedom of navigation operations
and overflights;
(B) reconsider the traditional policy of not taking a
position on individual claims; and
(C) respond to provocations by the People's Republic of
China with commensurate actions that impose costs on any
attempts to undermine security in the region;
(4) the Senkaku Islands are covered by Article V of the
Mutual Defense Assistance Agreement, with Annexes, signed at
Tokyo March 8, 1954 (5 UST 661), between the United States
and Japan; and
(5) the United States should firmly oppose any unilateral
actions by the People's Republic of China that seek to
undermine Japan's control of the Senkaku Islands.
SEC. __06. SANCTIONS WITH RESPECT TO CHINESE PERSONS
RESPONSIBLE FOR CHINA'S ACTIVITIES IN THE SOUTH
CHINA SEA AND THE EAST CHINA SEA.
(a) Initial Imposition of Sanctions.--On and after the date
that is 60 days after the date of the enactment of this Act,
the President shall impose the sanctions described in
subsection (b) with respect to--
(1) any Chinese person that contributes to construction or
development projects, including land reclamation, island-
making, lighthouse construction, building of base stations
for mobile communications services, building of electricity
and fuel supply facilities, or civil infrastructure projects,
in areas of the South China Sea contested by one or more
members of the Association of Southeast Asian Nations;
(2) any Chinese person that is responsible for or complicit
in, or has engaged in, directly or indirectly, actions or
policies that threaten the peace, security, or stability of
areas of the South China Sea contested by one or more members
of the Association of Southeast Asian Nations or areas of the
East China Sea administered by Japan or the Republic of
Korea, including through the use of vessels and aircraft to
impose the sovereignty of the People's Republic of China in
those areas;
(3) any Chinese person that engages, or attempts to engage,
in an activity or transaction that materially contributes to,
or poses a risk of materially contributing to, an activity
described in paragraph (1) or (2); and
(4) any person that--
(A) is owned or controlled by a person described in
paragraph (1), (2), or (3);
(B) is acting for or on behalf of such a person; or
(C) provides, or attempts to provide--
(i) financial, material, technological, or other support to
a person described in paragraph (1), (2), or (3); or
(ii) goods or services in support of an activity described
in paragraph (1), (2), or (3).
(b) Sanctions Described.--
(1) Blocking of property.--The President shall block, in
accordance with the International Emergency Economic Powers
Act (50 U.S.C. 1701 et seq.), all transactions in all
[[Page S5150]]
property and interests in property of any person subject to
subsection (a) if such property and interests in property are
in the United States, come within the United States, or are
or come within the possession or control of a United States
person.
(2) Exclusion from united states.--The Secretary of State
shall deny a visa to, and the Secretary of Homeland Security
shall exclude from the United States, any person subject to
subsection (a) that is an alien.
(3) Current visa revoked.--The issuing consular officer,
the Secretary of State, or the Secretary of Homeland Security
(or a designee of one of such Secretaries) shall revoke any
visa or other entry documentation issued to any person
subject to subsection (a) that is an alien, regardless of
when issued. The revocation shall take effect immediately and
shall automatically cancel any other valid visa or entry
documentation that is in the alien's possession.
(c) Exceptions; Penalties.--
(1) Inapplicability of national emergency requirement.--The
requirements of section 202 of the International Emergency
Economic Powers Act (50 U.S.C. 1701) shall not apply for
purposes of subsection (b)(1).
(2) Compliance with united nations headquarters
agreement.--Paragraphs (2) and (3) of subsection (b) shall
not apply if admission to the United States is necessary to
permit the United States to comply with the Agreement
regarding the Headquarters of the United Nations, signed at
Lake Success June 26, 1947, and entered into force November
21, 1947, between the United Nations and the United States.
(3) Penalties.--The penalties provided for in subsections
(b) and (c) of section 206 of the International Emergency
Economic Powers Act (50 U.S.C. 1705) shall apply to a person
that violates, attempts to violate, conspires to violate, or
causes a violation of regulations prescribed under subsection
(b)(1) to the same extent that such penalties apply to a
person that commits an unlawful act described in subsection
(a) of such section 206.
(d) Additional Imposition of Sanctions.--
(1) In general.--The President shall prohibit the opening,
and prohibit or impose strict conditions on the maintaining,
in the United States of a correspondent account or a payable-
through account by a foreign financial institution that the
President determines knowingly, on or after the date that is
60 days after the date of the enactment of this Act, conducts
or facilitates a significant financial transaction for a
person subject to subsection (a) if the Director of National
Intelligence determines that the Government of the People's
Republic of China has--
(A) declared an air defense identification zone over any
part of the South China Sea;
(B) initiated reclamation work at another disputed location
in the South China Sea, such as at Scarborough Shoal;
(C) seized control of Second Thomas Shoal;
(D) deployed surface-to-air missiles to any of the
artificial islands the People's Republic of China has built
in the Spratly Island chain, including Fiery Cross, Mischief,
or Subi Reefs;
(E) established territorial baselines around the Spratly
Island chain;
(F) increased harassment of Philippine vessels; or
(G) increased provocative actions against the Japanese
Coast Guard or Maritime Self-Defense Force or United States
forces in the East China Sea.
(2) Report.--
(A) In general.--The determination of the Director of
National Intelligence referred to in paragraph (1) shall be
submitted in a report to the President and the appropriate
congressional committees.
(B) Form of report.--The report required by subparagraph
(A) shall be submitted in unclassified form, but may include
a classified annex.
SEC. __07. DETERMINATIONS AND REPORT ON CHINESE COMPANIES
ACTIVE IN THE SOUTH CHINA SEA AND THE EAST
CHINA SEA.
(a) In General.--The Secretary of State shall submit to the
appropriate congressional committees a report that identifies
each Chinese person the Secretary determines is engaged in
the activities described in section __06(a).
(b) Consideration.--In preparing the report required under
subsection (a), the Secretary of State shall make specific
findings with respect to whether each of the following
persons is involved in the activities described in section
__06(a):
(1) CCCC Tianjin Dredging Co., Ltd.
(2) CCCC Dredging (Group) Company, Ltd.
(3) China Communications Construction Company (CCCC), Ltd.
(4) China Petroleum Corporation (Sinopec Group).
(5) China Mobile.
(6) China Telecom.
(7) China Southern Power Grid.
(8) CNFC Guangzhou Harbor Engineering Company.
(9) Zhanjiang South Project Construction Bureau.
(10) Hubei Jiangtian Construction Group.
(11) China Harbour Engineering Company (CHEC).
(12) Guangdong Navigation Group (GNG) Ocean Shipping.
(13) Shanghai Leading Energy Shipping.
(14) China National Offshore Oil Corporation (CNOOC).
(15) China Oilfield Services Limited (COSL).
(16) China Precision Machinery Import/Export Corporation
(CPMIEC).
(17) China Aerospace Science and Industry Corporation
(CASIC).
(18) Aviation Industry Corporation of China (AVIC).
(19) Shenyang Aircraft Corporation.
(20) Shaanxi Aircraft Corporation.
(21) China Ocean Shipping (Group) Company (COSCO).
(22) China Southern Airlines.
(23) Zhan Chaoying.
(24) Sany Group.
(25) Chinese persons affiliated with any of the entities
specified in paragraphs (1) through (24).
(c) Submission and Form.--
(1) Submission.--The report required by subsection (a)
shall be submitted not later than 60 days after the date of
the enactment of this Act and every 180 days thereafter until
the date that is 3 years after the date of the enactment of
this Act.
(2) Form.--The report required by subsection (a) shall be
submitted in unclassified form, but may include a classified
annex if the Secretary of State determines it is necessary
for the national security interests of the United States to
do so.
(3) Public availability.--The Secretary of State shall
publish the unclassified part of the report required by
subsection (a) on a publicly available website of the
Department of State.
SEC. __08. PROHIBITION AGAINST DOCUMENTS PORTRAYING THE SOUTH
CHINA SEA OR THE EAST CHINA SEA AS PART OF
CHINA.
The Government Publishing Office may not publish any map,
document, record, electronic resource, or other paper of the
United States (other than materials relating to hearings held
by committees of Congress or internal work product of a
Federal agency) portraying or otherwise indicating that it is
the position of the United States that the territory or
airspace in the South China Sea contested by one or more
members of the Association of Southeast Asian Nations or the
territory or airspace of areas of the East China Sea
administered by Japan or the Republic of Korea is part of the
territory or airspace of the People's Republic of China.
SEC. __09. PROHIBITION ON FACILITATING CERTAIN INVESTMENTS IN
THE SOUTH CHINA SEA OR THE EAST CHINA SEA.
(a) In General.--No United States person may take any
action to approve, facilitate, finance, or guarantee any
investment, provide insurance, or underwriting in the South
China Sea or the East China Sea that involves any person with
respect to which sanctions are imposed under section __06(a).
(b) Enforcement.--The Secretary of the Treasury, in
consultation with the Secretary of State, is authorized to
take such actions, including the promulgation of such rules
and regulations, as may be necessary to carry out the
purposes of this section.
(c) Penalties.--The penalties provided for in subsections
(b) and (c) of section 206 of the International Emergency
Economic Powers Act (50 U.S.C. 1705) shall apply to a person
that violates, attempts to violate, conspires to violate, or
causes a violation of regulations prescribed under this
section to the same extent that such penalties apply to a
person that commits an unlawful act described in subsection
(a) of such section 206.
(d) Exception.--Subsection (a) shall not apply with respect
to humanitarian assistance, disaster assistance, or emergency
food assistance.
SEC. __10. DEPARTMENT OF JUSTICE AFFIRMATION OF NON-
RECOGNITION OF ANNEXATION.
In any matter before any United States court, upon request
of the court or any party to the matter, the Attorney General
shall affirm the United States policy of not recognizing the
de jure or de facto sovereignty of the People's Republic of
China over territory or airspace contested by one or more
members of the Association of Southeast Asian Nations in the
South China Sea or the territory or airspace of areas of the
East China Sea administered by Japan or the Republic of
Korea.
SEC. __11. NON-RECOGNITION OF CHINESE SOVEREIGNTY OVER THE
SOUTH CHINA SEA OR THE EAST CHINA SEA.
(a) United States Armed Forces.--The Secretary of Defense
may not take any action, including any movement of aircraft
or vessels that implies recognition of the sovereignty of the
People's Republic of China over territory or airspace
contested by one or more members of the Association of
Southeast Asian Nations in the South China Sea or the
territory or airspace of areas of the East China Sea
administered by Japan or the Republic of Korea.
(b) United States Flagged Vessels.--No vessel that is
issued a certificate of documentation under chapter 121 of
title 46, United States Code, may take any action that
implies recognition of the sovereignty of the People's
Republic of China over territory or airspace contested by one
or more members of the Association of Southeast Asian Nations
in the South China Sea or the territory or airspace of areas
of the East China Sea administered by Japan or the Republic
of Korea.
(c) United States Aircraft.--No aircraft operated by an air
carrier that holds an air carrier certificate issued under
chapter 411 of title 49, United States Code, may take any
action that implies recognition of the sovereignty of the
People's Republic of China over territory or airspace
contested by one or more members of the Association of
[[Page S5151]]
Southeast Asian Nations in the South China Sea or the
territory or airspace of areas of the East China Sea
administered by Japan or the Republic of Korea.
SEC. __12. PROHIBITION ON CERTAIN ASSISTANCE TO COUNTRIES
THAT RECOGNIZE CHINESE SOVEREIGNTY OVER THE
SOUTH CHINA SEA OR THE EAST CHINA SEA.
(a) Prohibition.--Except as provided by subsection (c) or
(d), no amounts may be obligated or expended to provide
foreign assistance to the government of any country
identified in a report required by subsection (b).
(b) Report Required.--
(1) In general.--Not later than 60 days after the date of
the enactment of this Act, and every 180 days thereafter
until the date that is 3 years after such date of enactment,
the Secretary of State shall submit to the appropriate
congressional committees a report identifying each country
that the Secretary determines recognizes, after the date of
the enactment of this Act, the sovereignty of the People's
Republic of China over territory or airspace contested by one
or more members of the Association of Southeast Asian Nations
in the South China Sea or the territory or airspace of areas
of the East China Sea administered by Japan or the Republic
of Korea.
(2) Form.--The report required by paragraph (1) shall be
submitted in unclassified form, but may include a classified
annex if the Secretary of State determines it is necessary
for the national security interests of the United States to
do so.
(3) Public availability.--The Secretary of State shall
publish the unclassified part of the report required by
paragraph (1) on a publicly available website of the
Department of State.
(c) Exception.--This section shall not apply with respect
to Taiwan, humanitarian assistance, disaster assistance,
emergency food assistance, or the Peace Corps.
(d) Waiver.--The President may waive the application of
subsection (a) with respect to the government of a country if
the President determines that the waiver is in the national
interests of the United States.
______