[Congressional Record Volume 164, Number 107 (Tuesday, June 26, 2018)]
[House]
[Pages H5674-H5696]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        FOREIGN INVESTMENT RISK REVIEW MODERNIZATION ACT OF 2018

  Mr. ROYCE of California. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 5841) to modernize and strengthen the Committee on 
Foreign Investment in the United States to more effectively guard 
against the risk to the national security of the United States posed by 
certain types of foreign investment, and for other purposes, as 
amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 5841

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Foreign 
     Investment Risk Review Modernization Act of 2018''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                TITLE I--FINDINGS AND SENSE OF CONGRESS

Sec. 101. Findings and sense of Congress.

                         TITLE II--DEFINITIONS

Sec. 201. Definitions.

 TITLE III--IMPROVEMENTS TO THE OPERATIONS OF THE COMMITTEE ON FOREIGN 
                    INVESTMENT IN THE UNITED STATES

Sec. 301. Inclusion of partnership and side agreements in notice.
Sec. 302. Declarations relating to certain covered transactions.
Sec. 303. Timing for reviews and investigations.
Sec. 304. Submission of certifications to Congress.
Sec. 305. Analysis by Director of National Intelligence.
Sec. 306. Information sharing.
Sec. 307. Action by the President.
Sec. 308. Factors to be considered.
Sec. 309. Mitigation and other actions by the Committee to address 
              national security risks.
Sec. 310. Certification of notices and information.
Sec. 311. Additional regulations.

                TITLE IV--MODIFICATION OF ANNUAL REPORT

Sec. 401. Modification of annual report.
Sec. 402. Report on transactions with censorship implications.
Sec. 403. Notice to Congress by the Committee.

       TITLE V--RESOURCES, SPECIAL HIRING AUTHORITY, AND OUTREACH

Sec. 501. Centralization of certain Committee functions.
Sec. 502. CFIUS resource needs.
Sec. 503. Funding.

               TITLE VI--MISCELLANEOUS FIRRMA PROVISIONS

Sec. 601. Conforming amendment.
Sec. 602. Regulatory certainty for United States businesses.
Sec. 603. Cooperation with United States allies and partners.

          TITLE VII--COMMON SENSE CREDIT UNION CAPITAL RELIEF

Sec. 701. Delay in effective date.

                   TITLE VIII--EXPORT CONTROL REFORM

Sec. 801. Short title.
Sec. 802. Definitions.

[[Page H5675]]

          Subtitle A--Authority and Administration of Controls

Sec. 811. Short title.
Sec. 812. Statement of policy.
Sec. 813. Authority of the President.
Sec. 814. Additional authorities.
Sec. 815. Administration of export controls.
Sec. 816. Licensing.
Sec. 817. Compliance assistance.
Sec. 818. Requirements to identify and control emerging, foundational, 
              and other critical technologies in export control 
              regulations.
Sec. 819. Review relating to countries subject to comprehensive United 
              States arms embargo.
Sec. 820. Penalties.
Sec. 821. Enforcement.
Sec. 822. Administrative procedure.
Sec. 823. Review of interagency dispute resolution process.
Sec. 824. Coordination with other agencies on commodity classification 
              and removal of export controls.
Sec. 825. Annual report to Congress.
Sec. 826. Repeal.
Sec. 827. Effect on other Acts.
Sec. 828. Transition provisions.

                  Subtitle B--Anti-Boycott Act of 2018

Sec. 831. Short title.
Sec. 832. Statement of policy.
Sec. 833. Foreign boycotts.
Sec. 834. Enforcement.

Subtitle C--Sanctions Regarding Missile Proliferation and Chemical and 
                    Biological Weapons Proliferation

Sec. 841. Missile proliferation control violations.
Sec. 842. Chemical and biological weapons proliferation sanctions.

                 Subtitle D--Administrative Authorities

Sec. 851. Under Secretary of Commerce for Industry and Security.

                TITLE I--FINDINGS AND SENSE OF CONGRESS

     SEC. 101. FINDINGS AND SENSE OF CONGRESS.

       (a) Findings.--The Congress finds the following:
       (1) According to a February 2016 report by the Department 
     of Commerce's International Trade Administration, 12 million 
     United States workers, equivalent to 8.5 percent of the labor 
     force, have jobs resulting from foreign investment, including 
     3.5 million jobs in the manufacturing sector alone.
       (2) In 2016, new foreign direct investment in U.S. 
     manufacturing totaled $129.4 billion.
       (3) The Department of Commerce's Bureau of Economic 
     Analysis concluded that in 2015, foreign-owned affiliates in 
     the United States--
       (A) Contributed $894.5 billion in value added to the U.S. 
     economy;
       (B) exported goods valued at $352.8 billion, accounting for 
     nearly a quarter of total U.S. goods exports;
       (C) undertook $56.7 billion in research and development; 
     and
       (D) the seven largest investing countries, all of which are 
     United States allies - the United Kingdom, Japan, Germany, 
     France, Canada, Switzerland, and the Netherlands - accounted 
     for 72.1 percent of U.S. affiliate value added and over 80 
     percent of affiliates' R&D expenditures.
       (4) According to the Government Accountability Office 
     (GAO), from 2011 to 2016, the number of transactions reviewed 
     by the Committee on Foreign Investment in the United States 
     (CFIUS) grew by 55 percent, while agency staff assigned to 
     the reviews increased by 11 percent.
       (5) According to a February 2018 report (GAO-18-249), GAO 
     noted: ``Officials from Treasury and other member agencies 
     are aware of pressures on their CFIUS staff given the current 
     workload and have expressed concerns about possible workload 
     increases.''. GAO concluded: ``Without attaining an 
     understanding of the staffing levels needed to address the 
     current and future CFIUS workload, particularly if 
     legislative changes to CFIUS's authorities further expand its 
     workload, CFIUS may be limited in its ability to fulfill its 
     objectives and address threats to the national security of 
     the United States.''.
       (6) On March 30, 1954, Dwight David Eisenhower - five-star 
     general, Supreme Allied Commander, and 34th President of the 
     United States - in his ``Special Message to the Congress on 
     Foreign Economic Policy'', counseled: ``Great mutual 
     advantages to buyer and seller, to producer and consumer, to 
     investor and to the community where investment is made, 
     accrue from high levels of trade and investment.''. He 
     continued: ``The internal strength of the American economy 
     has evolved from such a system of mutual advantage. In the 
     press of other problems and in the haste to meet emergencies, 
     this nation - and many other nations of the free world - have 
     all too often lost sight of this central fact.''. President 
     Eisenhower concluded: ``If we fail in our trade policy, we 
     may fail in all. Our domestic employment, our standard of 
     living, our security, and the solidarity of the free world - 
     all are involved.''.
       (b) Sense of Congress.--It is the sense of Congress that--
       (1) foreign investment provides substantial benefits to the 
     United States, including the promotion of economic growth, 
     productivity, innovation, competitiveness, and job creation, 
     thereby enhancing U.S. national security;
       (2) maintaining the commitment of the United States to an 
     open investment policy encourages other countries to act 
     similarly and helps expand foreign markets for U.S. 
     businesses;
       (3) at the same time, national security risks related to 
     foreign investment, particularly those emanating from 
     countries such as China and Russia, warrant an appropriate 
     modernization of the processes and authorities of the 
     Committee on Foreign Investment in the United States;
       (4) the Committee on Foreign Investment in the United 
     States, as a complement to domestic and multilateral export 
     control regimes, plays a critical role in protecting the 
     national security of the United States;
       (5) in order to maintain the Committee's effectiveness and 
     guard against mission creep, CFIUS should remain narrowly 
     focused on confronting risks related to national security;
       (6) it is essential that the member agencies of the 
     Committee are adequately resourced and able to hire 
     appropriately qualified individuals in a timely manner so 
     that CFIUS may promptly complete transaction reviews, 
     identify and respond to evolving national security risks, and 
     enforce mitigation agreements effectively;
       (7) the President should carry out international outreach 
     to promote the benefits of foreign investment for global 
     economic growth, while also assisting United States partners 
     to address national security risks; and
       (8) it is the policy of the United States to 
     enthusiastically welcome and support foreign investment, 
     consistent with national security considerations.

                         TITLE II--DEFINITIONS

     SEC. 201. DEFINITIONS.

       Section 721(a) of the Defense Production Act of 1950 (50 
     U.S.C. 4565(a)) is amended--
       (1) by striking paragraphs (2), (3), and (4) and inserting 
     the following:
       ``(2) Control.--The term `control' means the power, direct 
     or indirect, whether or not exercised, to determine, direct, 
     or decide important matters affecting an entity, subject to 
     regulations prescribed by the Committee.
       ``(3) Covered transaction.--
       ``(A) In general.--The term `covered transaction' means any 
     transaction described in subparagraph (B) or (C) that is 
     proposed, pending, or completed on or after the date of the 
     enactment of the Foreign Investment Risk Review Modernization 
     Act of 2018.
       ``(B) Transactions described.--A transaction described in 
     this subparagraph is any of the following:
       ``(i) Any merger, acquisition, takeover, or joint venture 
     that is proposed or pending after August 23, 1988, by or with 
     any foreign person that could result in foreign control of 
     any United States business.
       ``(ii) The purchase or lease by, or concession to, a 
     foreign person of private or public real estate that--

       ``(I) is located in the United States and--

       ``(aa) is, or is in close proximity to, a United States 
     military installation or another facility or property of the 
     United States Government that is sensitive for reasons 
     relating to national security and--
       ``(AA) could reasonably provide the foreign person the 
     ability to collect intelligence on activities being conducted 
     at such an installation, facility, or property; or
       ``(BB) could otherwise expose national security activities 
     at such an installation, facility, or property to the risk of 
     foreign surveillance; or
       ``(bb) is itself, or is located at and could function as 
     part of, an air or sea port;

       ``(II) is not a single housing unit, as defined by the 
     Bureau of the Census;
       ``(III) is not in an urbanized area, as set forth by the 
     Bureau of the Census in its most recent census, except as 
     otherwise prescribed by the Committee in regulations in 
     consultation with the Secretary of Defense; and
       ``(IV) meets such other criteria as the Committee 
     prescribes by regulation, except that such criteria may not 
     expand the categories of real estate to which this clause 
     applies beyond the categories described in this clause.

       ``(iii) Any change in the rights that a foreign person has 
     with respect to a United States business in which the foreign 
     person has an investment, if that change could result in--

       ``(I) foreign control of the United States business; or
       ``(II) an investment described in subparagraph (C).

       ``(iv) Any transaction or other device entered into or 
     employed for the purpose of evading this section, subject to 
     regulations prescribed by the Committee.
       ``(C) Sensitive transactions involving countries of special 
     concern.--
       ``(i) In general.--A transaction described in this 
     subparagraph is any investment in an unaffiliated United 
     States business by a foreign person that--

       ``(I) is--

       ``(aa) a national or a government of, or a foreign entity 
     organized under the laws of, a country of special concern; or
       ``(bb) a foreign entity--
       ``(AA) over which control is exercised or exercisable by a 
     national or a government of, or by a foreign entity organized 
     under the laws of, a country of special concern; or
       ``(BB) in which the government of a country of special 
     concern has a substantial interest; and

       ``(II) as a result of the transaction, could obtain---

       ``(aa) sensitive personal data, as defined by regulations 
     prescribed by the Committee, of

[[Page H5676]]

     United States citizens, if such data may be exploited in a 
     manner that threatens national security;
       ``(bb) involvement, other than through voting of shares, in 
     substantive decisionmaking of the United States business 
     regarding--
       ``(AA) the use, development, acquisition, or release of 
     sensitive personal data of United States citizens (as 
     described in item (aa));
       ``(BB) the use, development, acquisition, or release of 
     critical technologies; or
       ``(CC) the management or operations of United States 
     critical infrastructure, as specified in regulations 
     prescribed by the Committee; or
       ``(cc) material nonpublic technical information in the 
     possession of the United States business.
       ``(ii) Country of special concern.--For the purposes of 
     this subparagraph, the term `country of special concern' 
     means--

       ``(I) any foreign country that is subject to export 
     restrictions pursuant to section 744.21 of title 15, Code of 
     Federal Regulations;
       ``(II) any country determined by the Secretary of State to 
     be a state sponsor of terrorism; and
       ``(III) any country that--

       ``(aa) is subject to a United States arms embargo, as 
     specified in list D:5 of Country Group D in Supplement No. 1 
     to part 740 of title 15, Code of Federal Regulations; and
       ``(bb) is specified in regulations prescribed by the 
     Committee.
       ``(iii) Investment defined.--For the purposes of this 
     subparagraph, the term `investment' means the acquisition of 
     an equity interest, including contingent equity interest, as 
     further defined in regulations prescribed by the Committee.
       ``(iv) Material nonpublic technical information defined.--

       ``(I) In general.--For the purposes of this subparagraph, 
     and subject to regulations prescribed by the Committee, the 
     term `material nonpublic technical information' means 
     information that--

       ``(aa) could create or reveal significant vulnerabilities 
     in United States critical infrastructure, as specified in 
     regulations prescribed by the Committee; or
       ``(bb) could be essential to design, develop, test, 
     produce, or manufacture critical technologies, as specified 
     in regulations prescribed by the Committee.

       ``(II) Exemption for financial information.--
     Notwithstanding subclause (I), for the purposes of this 
     subparagraph, the term `material nonpublic technical 
     information' does not include financial information regarding 
     the performance of a United States business.

       ``(v) Regulations with respect to critical 
     infrastructure.--For purposes of this subparagraph, 
     regulations prescribed by the Committee regarding United 
     States critical infrastructure shall include criteria to 
     limit application to critical infrastructure that is likely 
     to be of importance to the national security of the United 
     States.
       ``(vi) Unaffiliated united states business defined.--For 
     the purposes of this subparagraph, with respect to an 
     investment described under clause (i), and as further defined 
     in regulations prescribed by the Committee, the term 
     `unaffiliated United States business' means a United States 
     business that is not subject to the same ultimate ownership 
     of the foreign person undertaking the investment.
       ``(vii) Exemption.--The President may exempt a country from 
     the definition of a country of special concern under clause 
     (ii), for up to one year at a time, upon reporting to the 
     Committees on Financial Services and Foreign Affairs of the 
     House of Representatives and the Committees on Banking, 
     Housing, and Urban Affairs and Foreign Relations of the 
     Senate that the exemption is important to the national 
     interest of the United States, with a detailed explanation of 
     the reasons therefor.
       ``(D) Exception for air carriers.--Subparagraph (B)(iii) 
     shall not apply to a change in the rights of a person with 
     respect to an investment involving an air carrier, as defined 
     in section 40102(a)(2) of title 49, United States Code, that 
     holds a certificate issued under section 41102 of that title.
       ``(E) Transfers of certain assets pursuant to bankruptcy 
     proceedings or other defaults.--The Committee shall prescribe 
     regulations to clarify that the term `covered transaction' 
     includes any transaction described in subparagraph (B) or (C) 
     that arises pursuant to a bankruptcy proceeding or other form 
     of default on debt.
       ``(F) Definition of close proximity.--In prescribing 
     regulations with respect to subparagraph (B)(ii)(I)(aa), the 
     Committee shall ensure that the term `close proximity' only 
     applies to a distance or distances within which the purchase, 
     lease, or concession of real estate could pose a national 
     security risk in connection with a United States military 
     installation or another facility or property of the United 
     States Government.
       ``(4) Foreign government-controlled transaction.--The term 
     `foreign government-controlled transaction' means any covered 
     transaction that could result in control of a United States 
     business by--
       ``(A) a foreign government;
       ``(B) a person controlled by or acting on behalf of a 
     foreign government; or
       ``(C) a foreign company or entity of a country of special 
     concern (as defined under paragraph (3)(C)(ii)) domiciled or 
     having its principal place of business in a county of special 
     concern that is a non-market economy, except to the extent 
     the Committee promulgates regulations exempting any such 
     company, entity, or country from this presumption.'';
       (2) by amending paragraph (7) to read as follows:
       ``(7) Critical technologies.--The term `critical 
     technologies' means--
       ``(A) defense articles or defense services covered by the 
     United States Munitions List (USML), which is set forth in 
     the International Traffic in Arms Regulations (ITAR) (22 
     C.F.R. parts 120-130);
       ``(B) those items specified on the Commerce Control List 
     (CCL) set forth in Supplement No. 1 to part 774 of the Export 
     Administration Regulations (EAR) (15 C.F.R. parts 730-774) 
     that are controlled pursuant to multilateral regimes (i.e. 
     for reasons of national security, chemical and biological 
     weapons proliferation, nuclear nonproliferation, or missile 
     technology), as well as those that are controlled for reasons 
     of regional stability or surreptitious listening;
       ``(C) specially designed and prepared nuclear equipment, 
     parts and components, materials, software, and technology 
     specified in the Assistance to Foreign Atomic Energy 
     Activities regulations (10 C.F.R. part 810), and nuclear 
     facilities, equipment, and material specified in the Export 
     and Import of Nuclear Equipment and Material regulations (10 
     C.F.R. part 110);
       ``(D) select agents and toxins specified in the Select 
     Agents and Toxins regulations (7 C.F.R. part 331, 9 C.F.R. 
     part 121, and 42 C.F.R. part 73); and
       ``(E) emerging, foundational, or other critical 
     technologies that are controlled pursuant to section 818 of 
     the Foreign Investment Risk Review Modernization Act of 
     2018.''; and
       (3) by adding at the end the following:
       ``(9) Foreign person.--The term `foreign person' means--
       ``(A) any foreign national, foreign government, or foreign 
     entity; or
       ``(B) any entity over which control is exercised or 
     exercisable by a foreign national, foreign government, or 
     foreign entity.
       ``(10) Substantial interest.--The term `substantial 
     interest' has the meaning given to such term in regulations 
     prescribed by the Committee, but does not include a voting 
     interest of less than ten percent or ownership interests held 
     or acquired solely for the purpose of passive investment.
       ``(11) United states business.--The term `United States 
     business' means any entity, irrespective of the nationality 
     of the persons that control it, engaged in interstate 
     commerce in the United States, but only to the extent of its 
     activities in interstate commerce.''.

 TITLE III--IMPROVEMENTS TO THE OPERATIONS OF THE COMMITTEE ON FOREIGN 
                    INVESTMENT IN THE UNITED STATES

     SEC. 301. INCLUSION OF PARTNERSHIP AND SIDE AGREEMENTS IN 
                   NOTICE.

       Section 721(b)(1)(C) of the Defense Production Act of 1950 
     (50 U.S.C. 4565(b)(1)(C)) is amended by adding at the end the 
     following:
       ``(iv) Inclusion of partnership and side agreements.--
     Subject to regulations prescribed by the Committee, the 
     Committee may require a written notice submitted under clause 
     (i) by a party to a covered transaction to include a copy of 
     any partnership agreements, integration agreements, or other 
     side agreements relating to the transaction.''.

     SEC. 302. DECLARATIONS RELATING TO CERTAIN COVERED 
                   TRANSACTIONS.

       (a) In General.--Section 721(b)(1)(C) of the Defense 
     Production Act of 1950 (50 U.S.C. 4565(b)(1)(C)), as amended 
     by section 301, is further amended by adding at the end the 
     following:
       ``(v) Declarations with respect to certain covered 
     transactions.--

       ``(I) Voluntary declarations.--For the purpose of 
     expediting the review of certain covered transactions that 
     the Committee determines are likely to pose limited risk, the 
     Committee may prescribe regulations to permit parties to the 
     transaction to submit a declaration with basic information 
     regarding the transaction, unless the parties submit a 
     written notice under clause (i).
       ``(II) Mandatory declarations.--

       ``(aa) In general.--The Committee shall prescribe 
     regulations to require the parties to a covered transaction 
     to submit a declaration described in subclause (I) with 
     respect to the transaction if the transaction involves an 
     investment that results in the release of critical 
     technologies by an unaffiliated United States business (as 
     defined under subsection (a)(3)(C)(vi)) to a foreign person 
     in which a foreign government has, directly or indirectly, a 
     substantial interest.
       ``(bb) Submission of written notice as an alternative.--
     Parties to a covered transaction for which a declaration is 
     required under this clause may instead elect to submit a 
     written notice under clause (i).
       ``(cc) Timing of submission.--With respect to the 
     regulations described under subclause (I), the Committee may 
     not require a declaration to be submitted more than 45 days 
     in advance of the completion of the transaction.

       ``(III) Penalties.--The Committee may impose a penalty 
     pursuant to subsection (h)(3)(A) with respect to a party that 
     fails to comply with this clause.
       ``(IV) Committee response to declaration.--

       ``(aa) In general.--Upon receiving a declaration under this 
     clause with respect to a transaction, the Committee may, at 
     its discretion--
       ``(AA) request that the parties to the transaction file a 
     written notice under

[[Page H5677]]

     clause (i), provided that the Committee includes an 
     explanation of the reasons for the request;
       ``(BB) inform the parties to the transaction that the 
     Committee is not able to complete action under this section 
     with respect to the transaction on the basis of the 
     declaration and that the parties may file a written notice 
     under clause (i) to seek written notification from the 
     Committee that the Committee has completed all action under 
     this section with respect to the transaction;
       ``(CC) initiate a unilateral review of the transaction 
     under subparagraph (D); or
       ``(DD) notify the parties in writing that the Committee has 
     completed all action under this section with respect to the 
     transaction.
       ``(bb) Timing.--The Committee shall take action under item 
     (aa) within 30 days of receiving a declaration under this 
     clause.
       ``(cc) Refiling of declaration.--The Committee may not 
     request or recommend that a declaration be withdrawn and 
     refiled, except to permit parties to a transaction to correct 
     material errors or omissions.

       ``(V) Regulations.--In prescribing regulations establishing 
     requirements for declarations submitted under this clause, 
     the Committee shall ensure that such declarations are 
     submitted as abbreviated notifications that do not generally 
     exceed 5 pages in length.
       ``(VI) Investment defined.--For the purposes of this 
     clause, the term `investment' means the acquisition of an 
     equity interest, including contingent equity interest, as 
     further defined in regulations prescribed by the 
     Committee.''.

       (b) Stipulations Regarding Transactions.--Section 
     721(b)(1)(C) of the Defense Production Act of 1950 (50 U.S.C. 
     4565(b)(1)(C)), as amended by this section, is further 
     amended by adding at the end the following:
       ``(vi) Stipulations regarding transactions.--

       ``(I) In general.--In a written notice submitted under 
     clause (i) or a declaration submitted under clause (v) with 
     respect to a transaction, a party to the transaction may--

       ``(aa) stipulate that the transaction is a covered 
     transaction; and
       ``(bb) if the party stipulates that the transaction is a 
     covered transaction under item (aa), stipulate that the 
     transaction is a foreign government-controlled transaction.

       ``(II) Basis for stipulation.--A written notice submitted 
     under clause (i) or a declaration submitted under clause (v) 
     that includes a stipulation under subclause (I) shall include 
     a description of the basis for the stipulation.''.

     SEC. 303. TIMING FOR REVIEWS AND INVESTIGATIONS.

       Section 721(b) of the Defense Production Act of 1950 (50 
     U.S.C. 4565(b)) is amended--
       (1) in paragraph (1)(E), by striking ``30-day'' and 
     inserting ``45-day'';
       (2) in paragraph (2), by striking subparagraph (C) and 
     inserting the following:
       ``(C) Timing.--
       ``(i) In general.--Except as provided in clause (ii), any 
     investigation under subparagraph (A) shall be completed 
     before the end of the 45-day period beginning on the date on 
     which the investigation commenced.
       ``(ii) Extension for extraordinary circumstances.--

       ``(I) In general.--In extraordinary circumstances (as 
     defined by the Committee in regulations), the chairperson 
     may, at the request of the head of the lead agency, extend an 
     investigation under subparagraph (A) for not more than one 
     15-day period.
       ``(II) Nondelegation.--The authority of the chairperson and 
     the head of the lead agency referred to in subclause (I) may 
     not be delegated to any person other than the Deputy 
     Secretary of the Treasury or the deputy head (or equivalent 
     thereof) of the lead agency, as the case may be.
       ``(III) Notification to parties.--If the Committee extends 
     the deadline under subclause (I) with respect to a covered 
     transaction, the Committee shall notify the parties to the 
     transaction of the extension.''; and

       (3) by adding at the end the following:
       ``(8) Tolling of deadlines during lapse in 
     appropriations.--Any deadline or time limitation under this 
     subsection shall be tolled during a lapse in 
     appropriations.''.

     SEC. 304. SUBMISSION OF CERTIFICATIONS TO CONGRESS.

       Section 721(b)(3)(C) of the Defense Production Act of 1950 
     (50 U.S.C. 4565(b)(3)(C)) is amended--
       (1) in clause (i), by amending subclause (II) to read as 
     follows:

       ``(II) a certification that all relevant national security 
     factors, including factors enumerated in subsection (f), have 
     received full consideration.''; and

       (2) by adding at the end the following:
       ``(v) Authority to consolidate documents.--Instead of 
     transmitting a separate certified notice or certified report 
     under subparagraph (A) or (B) with respect to each covered 
     transaction, the Committee may, on a monthly basis, transmit 
     such notices and reports in a consolidated document to the 
     Members of Congress specified in clause (iii).''.

     SEC. 305. ANALYSIS BY DIRECTOR OF NATIONAL INTELLIGENCE.

       Section 721(b)(4) of the Defense Production Act of 1950 (50 
     U.S.C. 4565(b)(4)) is amended--
       (1) by striking subparagraph (A) and inserting the 
     following:
       ``(A) Analysis required.--
       ``(i) In general.--The Director of National Intelligence 
     shall expeditiously carry out a thorough analysis of any 
     threat to the national security of the United States posed by 
     any covered transaction, which shall include the 
     identification of any recognized gaps in the collection of 
     intelligence relevant to the analysis.
       ``(ii) Views of intelligence agencies.--The Director shall 
     seek and incorporate into the analysis required by clause (i) 
     the views of all affected or appropriate intelligence 
     agencies with respect to the transaction.
       ``(iii) Updates.--At the request of the lead agency, the 
     Director shall update the analysis conducted under clause (i) 
     with respect to a covered transaction with respect to which 
     an agreement was entered into under subsection (l)(3)(A).
       ``(iv) Independence and objectivity.--The Committee shall 
     ensure that its processes under this section preserve the 
     ability of the Director to conduct an analysis under clause 
     (i) that is independent, objective, and consistent with all 
     applicable directives, policies, and analytic tradecraft 
     standards of the intelligence community.''.
       (2) by redesignating subparagraphs (B), (C), and (D) as 
     subparagraphs (C), (D), and (E), respectively;
       (3) by inserting after subparagraph (A) the following:
       ``(B) Basic threat information.--
       ``(i) In general.--The Director of National Intelligence 
     may provide the Committee with basic information regarding 
     any threat to the national security of the United States 
     posed by a covered transaction described in clause (ii) 
     instead of conducting the analysis required by subparagraph 
     (A).
       ``(ii) Covered transaction described.--A covered 
     transaction is described in this clause if--

       ``(I) the transaction is described in subsection 
     (a)(3)(B)(ii);
       ``(II) the Director of National Intelligence has completed 
     an analysis pursuant to subparagraph (A) involving each 
     foreign person that is a party to the transaction during the 
     12 months preceding the review or investigation of the 
     transaction under this section; or
       ``(III) the transaction otherwise meets criteria agreed 
     upon by the Committee and the Director of National 
     Intelligence for purposes of this subparagraph.'';

       (4) in subparagraph (C), as so redesignated, by striking 
     ``20 days'' and inserting ``30 days''; and
       (5) by adding at the end the following:
       ``(F) Assessment of operational impact.--The Director may 
     provide to the Committee an assessment, separate from the 
     analyses under subparagraphs (A) and (B), of any operational 
     impact of a covered transaction on the intelligence community 
     and a description of any actions that have been or will be 
     taken to mitigate any such impact.
       ``(G) Submission to congress.--The Committee shall include 
     the analysis required by subparagraph (A) with respect to a 
     covered transaction in the report required under subsection 
     (m)(1), subject to the requirements of subsection (m)(5).''.

     SEC. 306. INFORMATION SHARING.

       Section 721(c) of the Defense Production Act of 1950 (50 
     U.S.C. 4565(c)) is amended--
       (1) by striking ``Any information'' and inserting the 
     following:
       ``(1) In general.--Any information''; and
       (2) by adding at the end the following:
       ``(2) Exception.--Paragraph (1) shall not prohibit the 
     disclosure of information or documentary material that the 
     party filing such information or material consented to be 
     disclosed to third parties.''.

     SEC. 307. ACTION BY THE PRESIDENT.

       (a) In General.--Section 721(d)(2) of the Defense 
     Production Act of 1950 (50 U.S.C. 4565(d)(2)) is amended by 
     striking ``not later than 15 days'' and all that follows and 
     inserting the following: ``with respect to a covered 
     transaction not later than 15 days after the earlier of--
       ``(A) the date on which the investigation of the 
     transaction under subsection (b) is completed; or
       ``(B) the date on which the Committee otherwise refers the 
     transaction to the President under subsection (l)(4).''.
       (b) Civil Penalties.--Section 721(h)(3)(A) of the Defense 
     Production Act of 1950 (50 U.S.C. 4565(h)(3)(A)) is amended 
     by striking ``including any mitigation'' and all that follows 
     through ``subsection (l)'' and inserting ``including any 
     mitigation agreement entered into, conditions imposed, or 
     order issued pursuant to this section''.

     SEC. 308. FACTORS TO BE CONSIDERED.

       Section 721(f) of the Defense Production Act of 1950 (50 
     U.S.C. 4565(f)) is amended--
       (1) in paragraph (3), by striking the comma at the end and 
     inserting the following: ``, including the availability of 
     human resources, products, technology, materials, and other 
     supplies and services;'';
       (2) in paragraph (4), by striking ``proposed or pending'';
       (3) by striking paragraph (5);
       (4) by redesignating paragraphs (6), (7), (8), (9), (10), 
     and (11) as paragraphs (5), (6), (7), (8), (9), and (16), 
     respectively;
       (5) in paragraph (9), as so redesignated, by striking 
     ``and'' at the end;
       (6) by inserting after paragraph (9), as so redesignated, 
     the following:
       ``(10) the degree to which the covered transaction is 
     likely to threaten the ability of the United States 
     Government to acquire or maintain the equipment and systems 
     that are necessary for defense, intelligence, or other 
     national security functions;

[[Page H5678]]

       ``(11) the potential national security-related effects of 
     the cumulative control of any one type of critical 
     infrastructure, energy asset, material, or critical 
     technology by a foreign person;
       ``(12) whether any foreign person that would acquire 
     control of a United States business as a result of the 
     covered transaction has a history of--
       ``(A) complying with United States laws and regulations and 
     prior adherence, if applicable, to any agreement or 
     condition, as described under (l)(1)(A); and
       ``(B) adhering to contracts or other agreements with 
     entities of the United States Government;
       ``(13) the extent to which the covered transaction is 
     likely to release, either directly or indirectly, sensitive 
     personal data of United States citizens to a foreign person 
     that may exploit that information in a manner that threatens 
     national security;
       ``(14) whether the covered transaction is likely to 
     exacerbate cybersecurity vulnerabilities or is likely to 
     result in a foreign government gaining a significant new 
     capability to engage in malicious cyber-enabled activities 
     against the United States, including such activities designed 
     to affect the outcome of any election for Federal office;
       ``(15) whether the covered transaction is likely to expose 
     any information regarding sensitive national security matters 
     or sensitive procedures or operations of a Federal law 
     enforcement agency with national security responsibilities to 
     a foreign person not authorized to receive that information; 
     and''; and
       (7) by adding at the end the following flush-left text:
     ``For purposes of this subsection, the phrase `the 
     availability of human resources' shall be construed to 
     consider potential losses of such availability resulting from 
     reductions in the employment of United States persons whose 
     knowledge or skills are critical to national security, 
     including the continued production in the United States of 
     items that are likely to be acquired by the Department of 
     Defense or other Federal departments or agencies for the 
     advancement of the national security of the United States.''.

     SEC. 309. MITIGATION AND OTHER ACTIONS BY THE COMMITTEE TO 
                   ADDRESS NATIONAL SECURITY RISKS.

       Section 721(l) of the Defense Production Act of 1950 (50 
     U.S.C. 4565(l)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A)--
       (i) in the heading, by striking ``In general'' and 
     inserting ``Agreements and conditions'';
       (ii) by striking ``The Committee'' and inserting the 
     following:
       ``(i) In general.--The Committee'';
       (iii) by adding at the end the following:
       ``(ii) Abandonment of transactions.--If a party to a 
     covered transaction has voluntarily chosen to abandon the 
     transaction, the Committee or lead agency, as the case may 
     be, may negotiate, enter into or impose, and enforce any 
     agreement or condition with any party to the covered 
     transaction for purposes of effectuating such abandonment and 
     mitigating any threat to the national security of the United 
     States that arises as a result of the covered transaction.
       ``(iii) Agreements and conditions relating to completed 
     transactions.--The Committee or lead agency, as the case may 
     be, may negotiate, enter into or impose, and enforce any 
     agreement or condition with any party to a completed covered 
     transaction in order to mitigate any interim threat to the 
     national security of the United States that may arise as a 
     result of the covered transaction until such time that the 
     Committee has completed action pursuant to subsection (b) or 
     the President has taken action pursuant to subsection (d) 
     with respect to the transaction.'';
       (B) by amending subparagraph (B) to read as follows:
       ``(B) Treatment of outdated agreements or conditions.--The 
     chairperson and the head of any applicable lead agency shall 
     periodically review the appropriateness of an agreement or 
     condition described under subparagraph (A) and terminate, 
     phase out, or otherwise amend any agreement or condition if a 
     threat no longer requires mitigation through the agreement or 
     condition.''; and
       (C) by adding at the end the following:
       ``(C) Limitations.--An agreement may not be entered into or 
     condition imposed under subparagraph (A) with respect to a 
     covered transaction unless the Committee determines that the 
     agreement or condition resolves the national security 
     concerns posed by the transaction, taking into consideration 
     whether the agreement or condition is reasonably calculated 
     to--
       ``(i) be effective;
       ``(ii) allow for compliance with the terms of the agreement 
     or condition in an appropriately verifiable way; and
       ``(iii) enable effective monitoring of compliance with and 
     enforcement of the terms of the agreement or condition.
       ``(D) Jurisdiction.--The provisions of section 706(b) shall 
     apply to any mitigation agreement entered into or condition 
     imposed under subparagraph (A).''; and
       (2) by adding at the end the following:
       ``(4) Referral to president.--The Committee may, at any 
     time during the review or investigation of a covered 
     transaction under subsection (b), complete the action of the 
     Committee with respect to the transaction and refer the 
     transaction to the President for action pursuant to 
     subsection (d).
       ``(5) Risk-based analysis required.--
       ``(A) In general.--Any determination of the Committee to 
     refer a covered transaction to the President under paragraph 
     (4), to suspend a covered transaction under paragraph (6), or 
     to negotiate, enter into, impose, or enforce any agreement or 
     condition under paragraph (1)(A) with respect to a covered 
     transaction, shall be based on a risk-based analysis, 
     conducted by the Committee, of the effects on the national 
     security of the United States of the covered transaction, 
     which shall include--
       ``(i) an assessment of the threat, vulnerabilities, and 
     consequences to national security resulting from the 
     transaction, as these terms are defined or clarified in 
     guidance and regulations issued by the Committee; and
       ``(ii) an identification of each relevant factor described 
     in subsection (f) that the transaction may substantially 
     implicate.
       ``(B) Compliance plans.--
       ``(i) In general.--In the case of a covered transaction 
     with respect to which an agreement or condition is entered 
     into under paragraph (1)(A), the Committee or lead agency, as 
     the case may be, shall formulate, adhere to, and keep updated 
     a plan for monitoring compliance with the agreement or 
     condition.
       ``(ii) Elements.--Each plan required by clause (i) with 
     respect to an agreement or condition entered into under 
     paragraph (1)(A) shall include an explanation of--

       ``(I) which member of the Committee will have primary 
     responsibility for monitoring compliance with the agreement 
     or condition;
       ``(II) how compliance with the agreement or condition will 
     be monitored;
       ``(III) how frequently compliance reviews will be 
     conducted;
       ``(IV) whether an independent entity will be utilized under 
     subparagraph (D) to conduct compliance reviews; and
       ``(V) what actions will be taken if the parties fail to 
     cooperate regarding monitoring compliance with the agreement 
     or condition.

       ``(C) Effect of lack of compliance.--If, at any time after 
     a mitigation agreement or condition is entered into or 
     imposed under paragraph (1)(A), the Committee or lead agency, 
     as the case may be, determines that a party or parties to the 
     agreement or condition are not in compliance with the terms 
     of the agreement or condition, the Committee or lead agency 
     may, in addition to the authority of the Committee to impose 
     penalties pursuant to subsection (h)(3)(A) and to 
     unilaterally initiate a review of any covered transaction 
     under subsection (b)(1)(D)(iii)(I)--
       ``(i) negotiate a plan of action for the party or parties 
     to remediate the lack of compliance, with failure to abide by 
     the plan or otherwise remediate the lack of compliance 
     serving as the basis for the Committee to find a material 
     breach of the agreement or condition;
       ``(ii) require that the party or parties submit any covered 
     transaction initiated after the date of the determination of 
     noncompliance and before the date that is 5 years after the 
     date of the determination to the Committee for review under 
     subsection (b); or
       ``(iii) seek injunctive relief.
       ``(D) Use of independent entities to monitor compliance.--
     If the parties to an agreement or condition entered into 
     under paragraph (1)(A) enter into a contract with an 
     independent entity from outside the United States Government 
     for the purpose of monitoring compliance with the agreement 
     or condition, the Committee shall take such action as is 
     necessary to prevent any significant conflict of interest 
     from arising with respect to the entity and the parties to 
     the transaction.
       ``(E) Successors and assigns.--Any agreement or condition 
     entered or imposed under paragraph (1)(A) shall be considered 
     binding on all successors and assigns, unless and until the 
     agreement or condition terminates on its own terms or is 
     otherwise terminated by the Committee in the Committee's sole 
     discretion.
       ``(F) Additional compliance measures.--Subject to 
     subparagraphs (A) through (D), the Committee shall develop 
     and agree upon methods for evaluating compliance with any 
     agreement entered into or condition imposed with respect to a 
     covered transaction that will allow the Committee to 
     adequately ensure compliance without unnecessarily diverting 
     Committee resources from assessing any new covered 
     transaction for which a written notice under clause (i) of 
     subsection (b)(1)(C) has been filed or for which a 
     declaration has been submitted under clause (v) of subsection 
     (b)(1)(C), and if necessary, reaching a mitigation agreement 
     with or imposing a condition on a party to such covered 
     transaction or any covered transaction for which a review has 
     been reopened for any reason.
       ``(6) Suspension of transactions.--The Committee, acting 
     through the chairperson, may suspend a proposed or pending 
     covered transaction that may pose a risk to the national 
     security of the United States for such time as the covered 
     transaction is under review or investigation under subsection 
     (b).''.

     SEC. 310. CERTIFICATION OF NOTICES AND INFORMATION.

       Section 721(n) of the Defense Production Act of 1950 (50 
     U.S.C. 4565(n)) is amended--
       (1) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively, and by moving such 
     subparagraphs, as so redesignated, 2 ems to the right;
       (2) by striking ``Each notice'' and inserting the 
     following:
       ``(1) In general.--Each notice''; and

[[Page H5679]]

       (3) by adding at the end the following:
       ``(2) Effect of failure to submit.--The Committee may not 
     complete a review under this section of a covered transaction 
     and may recommend to the President that the President suspend 
     or prohibit the transaction or require divestment under 
     subsection (d) if the Committee determines that a party to 
     the transaction has--
       ``(A) failed to submit a statement required by paragraph 
     (1); or
       ``(B) included false or misleading information in a notice 
     or information described in paragraph (1) or omitted material 
     information from such notice or information.
       ``(3) Applicability of law on fraud and false statements.--
     The Committee shall prescribe regulations expressly providing 
     for the application of section 1001 of title 18, United 
     States Code, to all information provided to the Committee 
     under this section by any party to a covered transaction.''.

     SEC. 311. ADDITIONAL REGULATIONS.

       Section 721(h)(3) of the Defense Production Act of 1950 (50 
     U.S.C. 4565(h)(3)) is amended--
       (1) in subparagraph (B)(ii), by striking ``and'' at the 
     end;
       (2) in subparagraph (C), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(D) provide that in connection with any national security 
     review or investigation of a covered transaction conducted by 
     the Committee, the Committee should--
       ``(i) consider the factors described in paragraphs (2) and 
     (3) of subsection (f); and
       ``(ii) as appropriate, require parties to provide the 
     information necessary to consider such factors.''.

                TITLE IV--MODIFICATION OF ANNUAL REPORT

     SEC. 401. MODIFICATION OF ANNUAL REPORT.

       Section 721(m) of the Defense Production Act of 1950 (50 
     U.S.C. 4565(m)) is amended--
       (1) in paragraph (2), by amending subparagraph (A) to read 
     as follows:
       ``(A) A list of all notices filed and all reviews or 
     investigations of covered transactions completed during the 
     period, with--
       ``(i) a description of the outcome of each review or 
     investigation, including whether an agreement was entered 
     into or condition was imposed under subsection (l)(3)(A) with 
     respect to the transaction being reviewed or investigated, 
     and whether the President took any action under this section 
     with respect to that transaction;
       ``(ii) the nature of the business activities or products of 
     the United States business with which the transaction was 
     entered into or intended to be entered into;
       ``(iii) information about any withdrawal from the process; 
     and
       ``(iv) the mean and median number of days required to 
     complete reviews and investigations during the period.'';
       (2) in paragraph (3)--
       (A) by striking ``critical technologies'' and all that 
     follows through ``In order to assist'' and inserting 
     ``critical technologies.--In order to assist'';
       (B) by striking subparagraph (B); and
       (C) by redesignating clauses (i) and (ii) as subparagraphs 
     (A) and (B), respectively, and by moving such subparagraphs, 
     as so redesignated, 2 ems to the left; and
       (3) by adding at the end the following:
       ``(4) Additional contents of report.--Each annual report 
     required under paragraph (1) shall contain the following 
     additional information:
       ``(A) Statistics on compliance reviews conducted and 
     actions taken by the Committee under subsection (l)(6), 
     including subparagraph (D) of that subsection (l)(6), during 
     that period and a description of any actions taken by the 
     Committee to impose penalties or initiate a unilateral review 
     pursuant to subsection (b)(1)(D)(iii)(I).
       ``(B) Cumulative and trend information on the number of 
     declarations filed under subsection (b)(1)(C)(v), the actions 
     taken by the Committee in response to declarations, the 
     business sectors involved in the declarations which have been 
     made, the countries involved in such declarations, and the 
     mean and median number of days required to respond to such 
     declarations, as described in subsection (b)(1)(C)(v)(IV), 
     during that period.
       ``(C) The number of new hires made since the preceding 
     report through the authorities described under subsection 
     (q), along with summary statistics, position titles, and 
     associated pay grades for such hires and a summary of such 
     hires' responsibilities in administering this section.
       ``(5) Classification; availability of report.--
       ``(A) Classification.--All appropriate portions of the 
     annual report required by paragraph (1) may be classified.
       ``(B) Public availability of unclassified version.--An 
     unclassified version of the report required by paragraph (1), 
     as appropriate and consistent with safeguarding national 
     security and privacy, shall be made available to the public. 
     Information regarding trade secrets or business confidential 
     information may be included in the classified version and may 
     not be made available to the public in the unclassified 
     version.
       ``(C) Exceptions to freedom of information act.--The 
     exceptions to subsection (a) of section 552 of title 5, 
     United States Code, provided for under subsection (b) of that 
     section shall apply with respect to the report required by 
     paragraph (1).''.

     SEC. 402. REPORT ON TRANSACTIONS WITH CENSORSHIP 
                   IMPLICATIONS.

       Not later than one year from the date of enactment of this 
     Act, the Committee on Foreign Investment in the United States 
     shall issue a report to the Congress, appropriate portions of 
     which may be classified, on investments by foreign persons 
     into the entertainment and information sectors of the United 
     States, which shall include analysis of the extent to which 
     such investments have resulted in or could result in direct 
     or indirect censorship, including self-censorship, within the 
     United States.

     SEC. 403. NOTICE TO CONGRESS BY THE COMMITTEE.

       Section 721 of the Defense Production Act of 1950 (50 
     U.S.C. 4565), as amended by section 503, is further amended 
     by adding at the end the following:
       ``(v) Notice to Congress by the Committee.--If the 
     Committee recommends that the President suspend or prohibit a 
     covered transaction because such transaction threatens to 
     impair the national security of the United States, the 
     Committee shall, in the classified version of the annual 
     report described under subsection (m), notify Congress of 
     each such recommendation and, upon request, provide a 
     classified briefing on the recommendation.''.

       TITLE V--RESOURCES, SPECIAL HIRING AUTHORITY, AND OUTREACH

     SEC. 501. CENTRALIZATION OF CERTAIN COMMITTEE FUNCTIONS.

       Section 721 of the Defense Production Act of 1950 (50 
     U.S.C. 4565) is amended by adding at the end the following:
       ``(o) Centralization of Certain Committee Functions.--
       ``(1) In general.--The chairperson, in consultation with 
     the Committee, may centralize certain functions of the 
     Committee within the Department of the Treasury for the 
     purpose of enhancing interagency coordination and 
     collaboration in carrying out the functions of the Committee 
     under this section.
       ``(2) Rule of construction.--Nothing in this subsection 
     shall be construed as limiting the authority of any 
     department or agency represented on the Committee to 
     represent its own interests before the Committee.''.

     SEC. 502. CFIUS RESOURCE NEEDS.

       (a) Unified Budget Request.--Section 721 of the Defense 
     Production Act of 1950 (50 U.S.C. 4565), as amended by 
     section 501, is further amended by adding at the end the 
     following:
       ``(p) Unified Budget Request; Annual Spending Plan.--
       ``(1) Unified budget request.--
       ``(A) In general.--The President may include, in the budget 
     of the Department of the Treasury for a fiscal year (as 
     submitted to Congress with the budget of the President under 
     section 1105(a) of title 31, United States Code), a unified 
     request for funding of all operations under this section 
     conducted by all of the departments and agencies represented 
     on the Committee.
       ``(B) Form of budget request.--A unified request under 
     subparagraph (A) shall be detailed and include the amounts 
     and staffing levels requested for each department or agency 
     represented on the Committee to carry out the functions of 
     that department or agency under this section.
       ``(2) Annual spending plan.--Not later than 90 days 
     following the date of enactment of this subsection, and 
     annually thereafter, the chairperson of the Committee shall 
     transmit to the Committees on Appropriations and Financial 
     Services of the House of Representatives and the Committees 
     on Appropriations and Banking, Housing, and Urban Affairs of 
     the Senate a detailed spending plan to expeditiously meet the 
     requirements of subsections (b), (l), and (m), including 
     estimated expenditures and staffing levels required by 
     operations of the Committee for not less than the following 
     fiscal year at each of the Committee's member agencies.
       ``(3) Waiver.--The chairperson may waive the reporting 
     requirement under paragraph (2) with respect to a fiscal year 
     for which a unified budget request described under paragraph 
     (1) has been submitted.''.
       (b) Special Hiring Authority.--Section 721 of the Defense 
     Production Act of 1950 (50 U.S.C. 4565), as amended by 
     subsection (a), is further amended by adding at the end the 
     following:
       ``(q) Special Hiring Authority.--The heads of the 
     departments and agencies represented on the Committee may 
     appoint, without regard to the provisions of sections 3309 
     through 3318 of title 5, United States Code, candidates 
     directly to positions in the competitive service (as defined 
     in section 2102 of that title) in their respective 
     departments and agencies to administer this section.''.
       (c) Testimony Required.--Section 721 of the Defense 
     Production Act of 1950 (50 U.S.C. 4565), as amended by 
     subsection (d), is further amended by adding at the end the 
     following:
       ``(r) Testimony.--
       ``(1) In general.--After submitting the unified budget 
     request described under subsection (p)(1), or the spending 
     plan described under subsection (p)(2), as the case may be, 
     but not later than March 31 of each year, the chairperson, or 
     the chairperson's designee, shall appear before the Committee 
     on Financial Services of the House of Representatives and 
     present testimony on--
       ``(A) anticipated resources necessary for operations of the 
     Committee in the following fiscal year at each of the 
     Committee's member agencies;

[[Page H5680]]

       ``(B) the adequacy of appropriations for the Committee in 
     the current and the previous fiscal year to--
       ``(i) ensure that thorough reviews and investigations are 
     completed as expeditiously as possible;
       ``(ii) monitor and enforce mitigation agreements; and
       ``(iii) identify covered transactions for which a notice 
     under clause (i) of subsection (b)(1)(C) or a declaration 
     under clause (v) of subsection (b)(1)(C) was not submitted to 
     the Committee;
       ``(C) management efforts to strengthen the ability of the 
     Committee to meet the requirements of this section; and
       ``(D) activities of the Committee undertaken in order to--
       ``(i) educate the business community, with a particular 
     focus on the technology sector and other sectors of 
     importance to national security, on the goals and operations 
     of the Committee;
       ``(ii) disseminate to the governments of United States 
     allies best practices of the Committee that--

       ``(I) strengthen national security reviews of relevant 
     investment transactions; and
       ``(II) expedite such reviews when appropriate; and

       ``(iii) promote openness to foreign investment, consistent 
     with national security considerations.
       ``(2) Sunset.--This subsection shall have no force or 
     effect on the date that is 7 years following the date of 
     enactment of the Foreign Investment Risk Review Modernization 
     Act of 2018.''.

     SEC. 503. FUNDING.

       Section 721 of the Defense Production Act of 1950 (50 
     U.S.C. 4565), as amended by section 603, is further amended 
     by adding at the end the following:
       ``(u) Funding.--
       ``(1) Establishment of fund.--There is established in the 
     Treasury of the United States a fund, to be known as the 
     `Committee on Foreign Investment in the United States Fund' 
     (in this subsection referred to as the `Fund'), to be 
     administered by the chairperson.
       ``(2) Authorization of appropriations for the committee.--
     There are authorized to be appropriated to the Fund for each 
     of fiscal years 2019 through 2023 $20,000,000 to perform the 
     functions of the Committee.
       ``(3) Filing fees.--
       ``(A) In general.--The Committee may assess and collect a 
     fee in an amount determined by the Committee in regulations, 
     without regard to section 9701 of title 31, United States 
     Code, and subject to subparagraph (B), with respect to each 
     covered transaction for which a written notice is submitted 
     to the Committee under subsection (b)(1)(C)(i) or a 
     declaration is submitted to the Committee under subsection 
     (b)(1)(C)(v).
       ``(B) Determination of amount of fee.--
       ``(i) In general.--The amount of the fee to be assessed 
     under subparagraph (A) with respect to a covered 
     transaction--

       ``(I) may not exceed an amount equal to the lesser of--

       ``(aa) 1 percent of the value of the transaction; or
       ``(bb) $300,000, as such amount is adjusted annually for 
     inflation pursuant to regulations prescribed by the 
     Committee; and

       ``(II) shall be determined by the Committee after taking 
     into consideration--

       ``(aa) the effect of the fee on small business concerns (as 
     defined in section 3 of the Small Business Act (15 U.S.C. 
     632));
       ``(bb) the expenses of the Committee associated with 
     conducting activities under this section;
       ``(cc) the effect of the fee on foreign investment;
       ``(dd) the unified budget request or annual spending plan, 
     as appropriate, described in section 502 of the Foreign 
     Investment Risk Review Modernization Act of 2018; and
       ``(ee) such other matters as the Committee considers 
     appropriate.
       ``(ii) Updates.--The Committee shall periodically 
     reconsider and adjust the amount of the fee to be assessed 
     under subparagraph (A) with respect to a covered transaction 
     to ensure that the amount of the fee remains appropriate.
       ``(C) Deposit and availability of fees.--Notwithstanding 
     section 3302 of title 31, United States Code, fees collected 
     under subparagraph (A) shall--
       ``(i) be deposited into the Fund for use in carrying out 
     activities under this section;
       ``(ii) to the extent and in the amounts provided in advance 
     in appropriations Acts, be available to the chairperson;
       ``(iii) remain available until expended; and
       ``(iv) be in addition to any appropriations made available 
     to the members of the Committee.
       ``(4) Transfer of funds.--To the extent provided in advance 
     in appropriations Acts, the chairperson may transfer any 
     amounts in the Fund to any other department or agency 
     represented on the Committee for the purpose of addressing 
     emerging needs in carrying out activities under this section. 
     Amounts so transferred shall be in addition to any other 
     amounts available to that department or agency for that 
     purpose.''.

               TITLE VI--MISCELLANEOUS FIRRMA PROVISIONS

     SEC. 601. CONFORMING AMENDMENT.

       Section 721(d)(4)(A) of the Defense Production Act of 1950 
     (50 U.S.C. 4565(d)(4)(A)) is amended by striking ``the 
     foreign interest exercising control'' and inserting ``a 
     foreign person that would acquire an interest in a United 
     States business or its assets as a result of the covered 
     transaction''.

     SEC. 602. REGULATORY CERTAINTY FOR UNITED STATES BUSINESSES.

       Section 721 of the Defense Production Act of 1950 (50 
     U.S.C. 4565), as amended by section 502, is further amended 
     by adding at the end the following:
       ``(s) Regulatory Certainty for United States Businesses.--
       ``(1) In general.--With respect to mitigating a national 
     security risk that results from a foreign person's investment 
     in, or joint venture with, a United States business, a member 
     agency of the Committee may not prescribe or implement 
     regulations to require divestment by, or of, the United 
     States business, unless--
       ``(A) the regulations are prescribed under this section or 
     pursuant to authorities of the President under the 
     International Emergency Economic Powers Act; or
       ``(B) the President reports to Congress in writing that the 
     regulations--
       ``(i) are, wherever applicable, consistent with regulations 
     prescribed under this section, including any such regulations 
     pertaining to--

       ``(I) foreign control or influence over a United States 
     business;
       ``(II) the identification of emerging, foundational, or 
     other critical technologies; and
       ``(III) confidentiality requirements with respect to 
     information and documentary material regarding United States 
     businesses; and

       ``(ii) in the case of regulations prescribed or finalized 
     following the effective date of this subsection, were 
     prescribed in consultation with the chairperson of the 
     Committee and with the head of any member agency determined 
     by the President to be affected by the regulations.
       ``(2) Exception for procurement authority.--Paragraph (1) 
     shall not apply to an action by a member agency if the head 
     of the member agency determines that such action is necessary 
     for procurement purposes of the agency or for matters related 
     to the management of the agency's supply chain.''.

     SEC. 603. COOPERATION WITH UNITED STATES ALLIES AND PARTNERS.

        Section 721 of the Defense Production Act of 1950 (50 
     U.S.C. 4565), as amended by section 602, is further amended 
     by adding at the end the following:
       ``(t) Cooperation With United States Allies and Partners.--
       ``(1) In general.--The chairperson, in consultation with 
     other members of the Committee, is authorized to lead a 
     formal process for the regular exchange of information with 
     governments of countries that are allies or partners of the 
     United States, in the discretion of the chairperson, to 
     protect the national security of the United States and those 
     countries.
       ``(2) Requirements.--The process described under paragraph 
     (1) shall, in the discretion of the chairperson--
       ``(A) be designed to facilitate the harmonization of action 
     with respect to trends in investment and technology that 
     could pose risks to the national security of the United 
     States and countries that are allies or partners of the 
     United States;
       ``(B) provide for the sharing of information with respect 
     to specific technologies and entities acquiring such 
     technologies as appropriate to ensure national security; and
       ``(C) include consultations and meetings with 
     representatives of the governments of such countries on a 
     recurring basis.''.

          TITLE VII--COMMON SENSE CREDIT UNION CAPITAL RELIEF

     SEC. 701. DELAY IN EFFECTIVE DATE.

       Notwithstanding any effective date set forth in the rule 
     issued by the National Credit Union Administration titled 
     ``Risk-Based Capital'' (published at 80 Fed. Reg. 66626 
     (October 29, 2015)), such final rule shall take effect on 
     January 1, 2021.

                   TITLE VIII--EXPORT CONTROL REFORM

     SEC. 801. SHORT TITLE.

       This title may be cited as the ``Export Control Reform Act 
     of 2018''.

     SEC. 802. DEFINITIONS.

       In this title:
       (1) Controlled.--The term ``controlled'' refers to an item 
     subject to the jurisdiction of the United States under 
     subtitle A.
       (2) Dual-use.--The term ``dual-use'', with respect to an 
     item, means the item has civilian applications and military, 
     terrorism, weapons of mass destruction, or law-enforcement-
     related applications.
       (3) Export.--The term ``export'', with respect to an item 
     subject to controls under subtitle A, includes--
       (A) the shipment or transmission of the item out of the 
     United States, including the sending or taking of the item 
     out of the United States, in any manner; and
       (B) the release or transfer of technology or source code 
     relating to the item to a foreign person in the United 
     States.
       (4) Export administration regulations.--The term ``Export 
     Administration Regulations'' means--
       (A) the Export Administration Regulations as promulgated, 
     maintained, and amended under the authority of the 
     International Emergency Economic Powers Act and codified, as 
     of the date of the enactment of this Act, in subchapter C of 
     chapter VII of title 15, Code of Federal Regulations; or
       (B) regulations that are promulgated, maintained, and 
     amended under the authority of subtitle A on or after the 
     date of the enactment of this Act.

[[Page H5681]]

       (5) Foreign person.--The term ``foreign person'' means--
       (A) any natural person who is not a lawful permanent 
     resident of the United States, citizen of the United States, 
     or any other protected individual (as such term is defined in 
     section 274B(a)(3) of the Immigration and Nationality Act (8 
     U.S.C. 1324b(a)(3));
       (B) any corporation, business association, partnership, 
     trust, society or any other entity or group that is not 
     incorporated in the United States or organized to do business 
     in the United States, as well as international organizations, 
     foreign governments and any agency or subdivision of a 
     foreign government (e.g., diplomatic mission).
       (6) Item.--The term ``item'' means a commodity, software, 
     or technology.
       (7) Person.--The term ``person'' means--
       (A) a natural person;
       (B) a corporation, business association, partnership, 
     society, trust, financial institution, insurer, underwriter, 
     guarantor, and any other business organization, any other 
     nongovernmental entity, organization, or group, or any 
     government or agency thereof; and
       (C) any successor to any entity described in subparagraph 
     (B).
       (8) Reexport.--The term ``reexport'', with respect to an 
     item subject to controls under subtitle A, includes--
       (A) the shipment or transmission of the item from a foreign 
     country to another foreign country, including the sending or 
     taking of the item from the foreign country to the other 
     foreign country, in any manner; and
       (B) the release or transfer of technology or source code 
     relating to the item to a foreign person outside the United 
     States.
       (9) Secretary.--Except as otherwise provided, the term 
     ``Secretary'' means the Secretary of Commerce.
       (10) Technology.--The term ``technology'' includes 
     foundational information and information and know-how 
     necessary for the development (at all stages prior to serial 
     production), production, use, operation, installation, 
     maintenance, repair, overhaul or refurbishing of an item.
       (11) Transfer.--The term ``transfer'', with respect to an 
     item subject to controls under title I, means a change in the 
     end-use or end user of the item within the same foreign 
     country.
       (12) United states.--The term ``United States'' means the 
     several States, the District of Columbia, the Commonwealth of 
     Puerto Rico, the Commonwealth of the Northern Mariana 
     Islands, American Samoa, Guam, the United States Virgin 
     Islands, and any other territory or possession of the United 
     States.
       (13) United states person.--The term ``United States 
     person'' means--
       (A) for purposes of subtitles A and C--
       (i) any individual who is a citizen or national of the 
     United States or who is an individual described in 
     subparagraph (B) of section 274B(a)(3) of the Immigration and 
     Nationality Act (8 U.S.C. 1324b(a)(3));
       (ii) a corporation or other legal entity which is organized 
     under the laws of the United States, any State or territory 
     thereof, or the District of Columbia; and
       (iii) any person in the United States; and
       (B) for purposes of subtitle B, any United States resident 
     or national (other than an individual resident outside the 
     United States and employed by other than a United States 
     person), any domestic concern (including any permanent 
     domestic establishment of any foreign concern) and any 
     foreign subsidiary or affiliate (including any permanent 
     foreign establishment) of any domestic concern which is 
     controlled in fact by such domestic concern, as determined 
     under regulations by the Secretary.
       (14) Weapons of mass destruction.--The term ``weapons of 
     mass destruction'' means nuclear, radiological, chemical, and 
     biological weapons and delivery systems for such weapons.

          Subtitle A--Authority and Administration of Controls

     SEC. 811. SHORT TITLE.

       This subtitle may be cited as the ``Export Controls Act of 
     2018''.

     SEC. 812. STATEMENT OF POLICY.

       The following is the policy of the United States:
       (1) To use export controls only after full consideration of 
     the impact on the economy of the United States and only to 
     the extent necessary--
       (A) to restrict the exports of items which would make a 
     significant contribution to the military potential of any 
     other country or combination of countries which would prove 
     detrimental to the national security of the United States; 
     and
       (B) to restrict the export of items if necessary to further 
     significantly the foreign policy of the United States or to 
     fulfill its declared international obligations.
       (2) The national security and foreign policy of the United 
     States require that the export, reexport, and transfer of 
     items, and specific activities of United States persons, 
     wherever located, be controlled for the following purposes:
       (A) To control the release of items for use in--
       (i) the proliferation of weapons of mass destruction or of 
     conventional weapons;
       (ii) the acquisition of destabilizing numbers or types of 
     conventional weapons;
       (iii) acts of terrorism;
       (iv) military programs that could pose a threat to the 
     security of the United States or its allies; or
       (v) activities undertaken specifically to cause significant 
     interference with or disruption of critical infrastructure.
       (B) To preserve the qualitative military superiority of the 
     United States.
       (C) To strengthen the United States industrial base.
       (D) To carry out the foreign policy of the United States, 
     including the protection of human rights and the promotion of 
     democracy.
       (E) To carry out obligations and commitments under 
     international agreements and arrangements, including 
     multilateral export control regimes.
       (F) To facilitate military interoperability between the 
     United States and its North Atlantic Treaty Organization 
     (NATO) and other close allies.
       (G) To ensure national security controls are tailored to 
     focus on those core technologies and other items that are 
     capable of being used to pose a serious national security 
     threat to the United States.
       (3) The national security of the United States requires 
     that the United States maintain its leadership in the 
     science, technology, engineering, and manufacturing sectors, 
     including foundational technology that is essential to 
     innovation. Such leadership requires that United States 
     persons are competitive in global markets. The impact of the 
     implementation of this subtitle on such leadership and 
     competitiveness must be evaluated on an ongoing basis and 
     applied in imposing controls under sections 813 and 814 to 
     avoid negatively affecting such leadership.
       (4) The national security and foreign policy of the United 
     States require that the United States participate in 
     multilateral organizations and agreements regarding export 
     controls on items that are consistent with the policy of the 
     United States, and take all the necessary steps to secure the 
     adoption and consistent enforcement, by the governments of 
     such countries, of export controls on items that are 
     consistent with such policy.
       (5) Export controls should be coordinated with the 
     multilateral export control regimes. Export controls that are 
     multilateral are most effective, and should be tailored to 
     focus on those core technologies and other items that are 
     capable of being used to pose a serious national security 
     threat to the United States and its allies.
       (6) Export controls applied unilaterally to items widely 
     available from foreign sources generally are less effective 
     in preventing end-users from acquiring those items. 
     Application of unilateral export controls should be limited 
     for purposes of protecting specific United States national 
     security and foreign policy interests.
       (7) The effective administration of export controls 
     requires a clear understanding both inside and outside the 
     United States Government of which items are controlled and an 
     efficient process should be created to update the controls, 
     such as by adding or removing such items.
       (8) The export control system must ensure that it is 
     transparent, predictable, and timely, has the flexibility to 
     be adapted to address new threats in the future, and allows 
     seamless access to and sharing of export control information 
     among all relevant United States national security and 
     foreign policy agencies.
       (9) Implementation and enforcement of United States export 
     controls require robust capabilities in monitoring, 
     intelligence, and investigation, appropriate penalties for 
     violations, and the ability to swiftly interdict unapproved 
     transfers.
       (10) Export controls complement and are a critical element 
     of the national security policies underlying the laws and 
     regulations governing foreign direct investment in the United 
     States, including controlling the transfer of critical 
     technologies to certain foreign persons. Thus, the President, 
     in coordination with the Secretary, the Secretary of Defense, 
     the Secretary of State, the Secretary of Energy, and the 
     heads of other Federal agencies, as appropriate, should have 
     a regular and robust process to identify the emerging and 
     other types of critical technologies of concern and regulate 
     their release to foreign persons as warranted regardless of 
     the nature of the underlying transaction. Such identification 
     efforts should draw upon the resources and expertise of all 
     relevant parts of the United States Government, industry, and 
     academia. These efforts should be in addition to traditional 
     efforts to modernize and update the lists of controlled items 
     under the multilateral export control regimes.
       (11) The authority under this subtitle may be exercised 
     only in furtherance of all of the objectives set forth in 
     paragraphs (1) through (10).

     SEC. 813. AUTHORITY OF THE PRESIDENT.

       (a) Authority.--In order to carry out the policy set forth 
     in paragraphs (1) through (10) of section 812, the President 
     shall control--
       (1) the export, reexport, and transfer of items subject to 
     the jurisdiction of the United States, whether by United 
     States persons or by foreign persons; and
       (2) the activities of United States persons, wherever 
     located, relating to specific--
       (A) nuclear explosive devices;
       (B) missiles;
       (C) chemical or biological weapons;
       (D) whole plants for chemical weapons precursors;
       (E) foreign maritime nuclear projects; and

[[Page H5682]]

       (F) foreign military intelligence services.
       (b) Requirements.--In exercising authority under this 
     subtitle to carry out the policy set forth in paragraphs (1) 
     through (10) of section 812, the President shall--
       (1) regulate the export, reexport, and transfer of items 
     described in subsection (a)(1) of United States persons or 
     foreign persons;
       (2) regulate the activities described in subsection (a)(2) 
     of United States persons, wherever located;
       (3) secure the cooperation of other governments and 
     multilateral organizations to impose control systems that are 
     consistent, to the extent possible, with the controls imposed 
     under subsection (a);
       (4) maintain the leadership of the United States in 
     science, engineering, technology research and development, 
     manufacturing, and foundational technology that is essential 
     to innovation;
       (5) protect United States technological advances by 
     prohibiting unauthorized technology transfers to foreign 
     persons in the United States or outside the United States, 
     particularly with respect to countries that may pose a 
     significant threat to the national security of the United 
     States;
       (6) strengthen the United States industrial base, both with 
     respect to current and future defense requirements; and
       (7) enforce the controls through means such as regulations, 
     requirements for compliance, lists of controlled items, lists 
     of foreign persons who threaten the national security or 
     foreign policy of the United States, and guidance in a form 
     that facilitates compliance by United States persons and 
     foreign persons, in particular academic institutions, 
     scientific and research establishments, and small- and 
     medium-sized businesses.
       (c) Application of Controls.--The President shall impose 
     controls over the export, reexport, or transfer of items for 
     purposes of the objectives described in subsections (b)(1) or 
     (b)(2) without regard to the nature of the underlying 
     transaction or any circumstances pertaining to the activity, 
     including whether such export, reexport, or transfer occurs 
     pursuant to a purchase order or other contract requirement, 
     voluntary decision, inter-company arrangement, marketing 
     effort, or during a joint venture, joint development 
     agreement, or similar collaborative agreement.

     SEC. 814. ADDITIONAL AUTHORITIES.

       (a) In General.--In carrying out this subtitle on behalf of 
     the President, the Secretary, in consultation with the 
     Secretary of State, the Secretary of Defense, the Secretary 
     of Energy, and the heads of other Federal agencies as 
     appropriate, shall--
       (1) establish and maintain a list of items that are 
     controlled under this subtitle;
       (2) establish and maintain a list of foreign persons and 
     end-uses that are determined to be a threat to the national 
     security and foreign policy of the United States pursuant to 
     the policy set forth in section 812(2)(A);
       (3) prohibit unauthorized exports, reexports, and transfers 
     of controlled items, including to foreign persons in the 
     United States or outside the United States;
       (4) restrict exports, reexports, and transfers of any 
     controlled items to any foreign person or end-use listed 
     under paragraph (2);
       (5) require licenses or other authorizations, as 
     appropriate, for exports, reexports, and transfers of 
     controlled items, including imposing conditions or 
     restrictions on United States persons and foreign persons 
     with respect to such licenses or other authorizations;
       (6) establish a process for an assessment to determine 
     whether a foreign item is comparable in quality to an item 
     controlled under this subtitle, and is available in 
     sufficient quantities to render the United States export 
     control of that item or the denial of a license ineffective, 
     including a mechanism to address that disparity;
       (7) require measures for compliance with the export 
     controls established under this subtitle;
       (8) require and obtain such information from United States 
     persons and foreign persons as is necessary to carry out this 
     subtitle;
       (9) require, to the extent feasible, identification of 
     items subject to controls under this subtitle in order to 
     facilitate the enforcement of such controls;
       (10) inspect, search, detain, or seize, or impose temporary 
     denial orders with respect to items, in any form, that are 
     subject to controls under this subtitle, or conveyances on 
     which it is believed that there are items that have been, are 
     being, or are about to be exported, reexported, or 
     transferred in violation of this subtitle;
       (11) monitor shipments, or other means of transfer;
       (12) keep the public fully apprised of changes in policy, 
     regulations, and procedures established under this subtitle;
       (13) appoint technical advisory committees in accordance 
     with the Federal Advisory Committee Act;
       (14) create, as warranted, exceptions to licensing 
     requirements in order to further the objectives of this 
     subtitle;
       (15) establish and maintain processes to inform persons, 
     either individually by specific notice or through amendment 
     to any regulation or order issued under this subtitle, that a 
     license from the Bureau of Industry and Security of the 
     Department of Commerce is required to export; and
       (16) undertake any other action as is necessary to carry 
     out this subtitle that is not otherwise prohibited by law.
       (b) Relationship to IEEPA.--The authority under this 
     subtitle may not be used to regulate or prohibit under this 
     subtitle the export, reexport, or transfer of any item that 
     may not be regulated or prohibited under section 203(b) of 
     the International Emergency Economic Powers Act (50 U.S.C. 
     1702(b)), except to the extent the President has made a 
     determination necessary to impose controls under subparagraph 
     (A), (B), or (C) of paragraph (2) of such section.
       (c) Countries Supporting International Terrorism.--
       (1) Commerce license requirement.--
       (A) In general.--A license shall be required for the 
     export, reexport, or transfer of items, the control of which 
     is implemented pursuant to subsection (a) by the Secretary, 
     to a country if the Secretary of State has made the following 
     determinations:
       (i) The government of such country has repeatedly provided 
     support for acts of international terrorism.
       (ii) The export, reexport, or transfer of such items could 
     make a significant contribution to the military potential of 
     such country, including its military logistics capability, or 
     could enhance the ability of such country to support acts of 
     international terrorism.
       (B) Determination under other provisions of law.--A 
     determination of the Secretary of State under section 620A of 
     the Foreign Assistance Act of 1961 (22 U.S.C. 2371), section 
     40 of the Arms Export Control Act (22 U.S.C. 2780), or any 
     other provision of law that the government of a country 
     described in subparagraph (A) has repeatedly provided support 
     for acts of international terrorism shall be deemed to be a 
     determination with respect to such government for purposes of 
     clause (i) of subparagraph (A).
       (2) Notification to congress.--
       (A) In general.--The Secretary of State and the Secretary 
     shall notify the Committee on Foreign Affairs of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs and the Committee on Foreign Relations of the 
     Senate at least 30 days before any license is issued as 
     required by paragraph (1).
       (B) Contents.--The Secretary of State shall include in the 
     notification required under subparagraph (A)--
       (i) a detailed description of the items to be offered, 
     including a brief description of the capabilities of any item 
     for which a license to export, reexport, or transfer the 
     items is sought;
       (ii) the reasons why the foreign country, person, or entity 
     to which the export, reexport, or transfer is proposed to be 
     made has requested the items under the export, reexport, or 
     transfer, and a description of the manner in which such 
     country, person, or entity intends to use such items;
       (iii) the reasons why the proposed export, reexport, or 
     transfer is in the national interest of the United States;
       (iv) an analysis of the impact of the proposed export, 
     reexport, or transfer on the military capabilities of the 
     foreign country, person, or entity to which such transfer 
     would be made;
       (v) an analysis of the manner in which the proposed export, 
     reexport, or transfer would affect the relative military 
     strengths of countries in the region to which the items that 
     are the subject of such export, reexport, or transfer would 
     be delivered and whether other countries in the region have 
     comparable kinds and amounts of items; and
       (vi) an analysis of the impact of the proposed export, 
     reexport, or transfer on the relations of the United States 
     with the countries in the region to which the items that are 
     the subject of such export, reexport, or transfer would be 
     delivered.
       (3) Publication in federal register.--Each determination of 
     the Secretary of State under paragraph (1)(A)(i) shall be 
     published in the Federal Register, except that the Secretary 
     of State may exclude confidential information and trade 
     secrets contained in such determination.
       (4) Rescission of determination.--A determination of the 
     Secretary of State under paragraph (1)(A)(i) may not be 
     rescinded unless the President submits to the Speaker of the 
     House of Representatives, the chairman of the Committee on 
     Foreign Affairs, and the chairman of the Committee on 
     Banking, Housing, and Urban Affairs and the chairman of the 
     Committee on Foreign Relations of the Senate--
       (A) before the proposed rescission would take effect, a 
     report certifying that--
       (i) there has been a fundamental change in the leadership 
     and policies of the government of the country concerned;
       (ii) that government is not supporting acts of 
     international terrorism; and
       (iii) that government has provided assurances that it will 
     not support acts of international terrorism in the future; or
       (B) at least 90 days before the proposed rescission would 
     take effect, a report justifying the rescission and 
     certifying that--
       (i) the government concerned has not provided any support 
     for acts international terrorism during the preceding 24-
     month period; and
       (ii) the government concerned has provided assurances that 
     it will not support acts of international terrorism in the 
     future.
       (5) Disapproval of rescission.--No rescission under 
     paragraph (4)(B) of a determination under paragraph (1)(A) 
     with respect to the government of a country may be made if 
     Congress, within 90 days after receipt of a report under 
     paragraph (4)(B), enacts a joint

[[Page H5683]]

     resolution described in subsection (f)(2) of section 40 of 
     the Arms Export Control Act with respect to a rescission 
     under subsection (f)(1) of such section with respect to the 
     government of such country.
       (6) Notification and briefing.--Not later than--
       (A) ten days after initiating a review of the activities of 
     the government of the country concerned within the 24-month 
     period referred to in paragraph (4)(B)(i), the Secretary of 
     State shall notify the Committee on Foreign Affairs of the 
     House of Representatives and the Committee on Foreign 
     Relations of the Senate of such initiation; and
       (B) 20 days after the notification described in paragraph 
     (1), the Secretary of State shall brief the congressional 
     committees described in paragraph (1) on the status of such 
     review.
       (7) Waiver.--The President may waive the requirement under 
     paragraph (1) that a license shall be required for the 
     export, reexport, or transfer of items, the control of which 
     is implemented pursuant to subsection (a) by the Secretary, 
     to a country if the President--
       (A) determines that to do so is essential to the national 
     security interests of the United States; and
       (B) consults with the Committee on Foreign Affairs of the 
     House of Representatives and the Committee on Banking, 
     Housing, and Urban Affairs and the Committee on Foreign 
     Relations of the Senate not less than 15 days prior to the 
     waiver taking effect.
       (d) Enhanced Controls.--
       (1) In general.--In furtherance of section 813(a), the 
     President shall, except to the extent authorized by a statute 
     or regulation administered by a Federal department or agency 
     other than the Department of Commerce, require a United 
     States person, wherever located, to apply for and receive a 
     license from the Department of Commerce for--
       (A) the export, reexport, or transfer of items described in 
     paragraph (2), including items that are not subject to 
     control under this subtitle; and
       (B) other activities that may support the design, 
     development, production, use, operation, installation, 
     maintenance, repair, overhaul, or refurbishing of, or for the 
     performance of services relating to, any such items.
       (2) Items described.--The items described in this paragraph 
     include--
       (A) nuclear explosive devices;
       (B) missiles;
       (C) chemical or biological weapons;
       (D) whole plants for chemical weapons precursors; and
       (E) foreign maritime nuclear projects that would pose a 
     risk to the national security or foreign policy of the United 
     States.
       (e) Additional Prohibitions.--The Secretary may inform 
     United States persons, either individually by specific notice 
     or through amendment to any regulation or order issued under 
     this subtitle, that a license from the Bureau of Industry and 
     Security of the Department of Commerce is required to engage 
     in any activity if the activity involves the types of 
     movement, service, or support described in subsection (d). 
     The absence of any such notification does not excuse the 
     United States person from compliance with the license 
     requirements of subsection (d), or any regulation or order 
     issued under this subtitle.
       (f) License Review Standards.--The Secretary shall deny an 
     application to engage in any activity described in subsection 
     (d) if the activity would make a material contribution to any 
     of the items described in subsection (d)(2).

     SEC. 815. ADMINISTRATION OF EXPORT CONTROLS.

       (a) In General.--The President shall rely on, including 
     through delegations, as appropriate, to the Secretary, the 
     Secretary of Defense, the Secretary of State, the Secretary 
     of Energy, the Director of National Intelligence, and the 
     heads of other Federal agencies as appropriate, to exercise 
     the authority to carry out the purposes set forth in 
     subsection (b).
       (b) Purposes.--
       (1) In general.--The purposes of this section include to--
       (A) advise the President with respect to--
       (i) identifying specific threats to the national security 
     and foreign policy that the authority of this subtitle may be 
     used to address; and
       (ii) exercising the authority under this subtitle to 
     implement policies, regulations, procedures, and actions that 
     are necessary to effectively counteract those threats;
       (B) review and approve--
       (i) criteria for including items on, and removing such an 
     item from, a list of controlled items established under this 
     subtitle;
       (ii) an interagency procedure for compiling and amending 
     any list described in clause (i);
       (iii) criteria for including a person on a list of persons 
     to whom exports, reexports, and transfers of items are 
     prohibited or restricted under this subtitle;
       (iv) standards for compliance by persons subject to 
     controls under this subtitle; and
       (v) policies and procedures for the end-use monitoring of 
     exports, reexports, and transfers of items controlled under 
     this subtitle;
       (C) obtain independent evaluations, including from 
     Inspectors General of the relevant departments or agencies, 
     on a periodic basis on the effectiveness of the 
     implementation of this subtitle in carrying out the policy 
     set forth in section 812; and
       (D) benefit from the inherent equities, experience, and 
     capabilities of the Federal officials described in subsection 
     (a), including--
       (i) the views of the Department of Defense with respect to 
     the national security implications of a particular control or 
     decision;
       (ii) the views of the Department of State with respect to 
     foreign policy implications of a particular control or 
     decision, including views relating to national security;
       (iii) the views of the Department of Energy with respect to 
     the implications for nuclear proliferation of a particular 
     control or decision;
       (iv) the views of the Department of Commerce with respect 
     to the administration of an efficient, coherent, reliable, 
     enforceable, and predictable export control system, including 
     views relating to national security, and the resolution of 
     competing views or policy objectives described in section 
     812; and
       (v) the views of other Federal agencies, including the 
     Department of Homeland Security and the Department of 
     Justice, with respect to enforceability of a particular 
     control or decision.
       (2) Transmittal and implementation of evaluations.--The 
     results of the independent evaluations conducted pursuant to 
     paragraph (1)(C) shall be transmitted to the President and 
     the Congress, in classified form if necessary. Subject to the 
     delegation of authority by the President, the Federal 
     officials described in subsection (a) shall determine, 
     direct, and ensure that improvements recommended in the 
     evaluations are implemented.
       (c) Sense of Congress.--It is the sense of Congress that 
     the administration of export controls under this subtitle 
     should be consistent with the procedures relating to export 
     license applications described in Executive Order 12981 
     (1995).

     SEC. 816. LICENSING.

       (a) In General.--The President shall, as set forth in 
     section 815(a), establish a procedure for the Department of 
     Commerce to license or otherwise authorize the export, 
     reexport, and transfer of items controlled under this 
     subtitle in order to carry out the policy set forth in 
     section 812 and the requirements set forth in section 813(b). 
     The procedure shall ensure that--
       (1) license applications and other requests for 
     authorization are considered and decisions made with the 
     participation of appropriate Federal agencies, as 
     appropriate; and
       (2) licensing decisions are made in an expeditious manner, 
     with transparency to applicants on the status of license and 
     other authorization processing and the reason for denying any 
     license or request for authorization.
       (b) Sense of Congress.--It is the sense of Congress that 
     the President should make best efforts to ensure that an 
     accurate, consistent, and timely evaluation and processing of 
     licenses or other requests for authorization to export, 
     reexport, or transfer items controlled under this subtitle is 
     generally accomplished within 30 days from the date of such 
     license request.
       (c) Fees.--No fee may be charged in connection with the 
     submission, processing, or consideration of any application 
     for a license or other authorization or other request made in 
     connection with any regulation in effect under the authority 
     of this subtitle.
       (d) Additional Procedural Requirements.--
       (1) In general.--The procedure required under subsection 
     (a) shall provide for the assessment of the impact of a 
     proposed export of an item on the United States defense 
     industrial base and the denial of an application for a 
     license or a request for an authorization of any export that 
     would have a significant negative impact on such defense 
     industrial base, as described in paragraph (3).
       (2) Information from applicant.--The procedure required 
     under subsection (a) shall also require an applicant for a 
     license to provide the information necessary to make the 
     assessment provided under paragraph (1), including whether 
     the purpose or effect of the export is to allow for the 
     significant production of items relevant for the defense 
     industrial base outside the United States.
       (3) Significantly negative impact defined.--A significant 
     negative impact on the United States defense industrial base 
     is the following:
       (A) A reduction in the availability of an item produced in 
     the United States that is likely to be acquired by the 
     Department of Defense or other Federal department or agency 
     for the advancement of the national security of the United 
     States, or for the production of an item in the United States 
     for the Department of Defense or other agency for the 
     advancement of the national security of the United States.
       (B) A reduction in the production in the United States of 
     an item that is the result of research and development 
     carried out, or funded by, the Department of Defense or other 
     Federal department or agency to advance the national security 
     of the United States, or a federally funded research and 
     development center.
       (C) A reduction in the employment of United States persons 
     whose knowledge and skills are necessary for the continued 
     production in the United States of an item that is likely to 
     be acquired by the Department of Defense or other Federal 
     department or agency for the advancement of the national 
     security of the United States.

[[Page H5684]]

  


     SEC. 817. COMPLIANCE ASSISTANCE.

       (a) System for Seeking Assistance.--The President may 
     authorize the Secretary to establish a system to provide 
     United States persons with assistance in complying with this 
     subtitle, which may include a mechanism for providing 
     information, in classified form as appropriate, who are 
     potential customers, suppliers, or business partners with 
     respect to items controlled under this subtitle, in order to 
     further ensure the prevention of the export, reexport, or 
     transfer of items that may pose a threat to the national 
     security or foreign policy of the United States.
       (b) Security Clearances.--In order to carry out subsection 
     (a), the President may issue appropriate security clearances 
     to persons described in that subsection who are responsible 
     for complying with this subtitle.
       (c) Assistance for Certain Businesses.--
       (1) In general.--Not later than 120 days after the date of 
     the enactment of this Act, the President shall develop and 
     submit to Congress a plan to assist small- and medium-sized 
     United States in export licensing and other processes under 
     this subtitle.
       (2) Contents.--The plan shall include, among other things, 
     arrangements for the Department of Commerce to provide 
     counseling to businesses described in paragraph (1) on filing 
     applications and identifying items controlled under this 
     subtitle, as well as proposals for seminars and conferences 
     to educate such businesses on export controls, licensing 
     procedures, and related obligations.

     SEC. 818. REQUIREMENTS TO IDENTIFY AND CONTROL EMERGING, 
                   FOUNDATIONAL, AND OTHER CRITICAL TECHNOLOGIES 
                   IN EXPORT CONTROL REGULATIONS.

       (a) Identification of Technologies.--
       (1) In general.--The President shall establish and, in 
     coordination with the Secretary, the Secretary of Defense, 
     the Secretary of Energy, the Secretary of State, and the 
     heads of other Federal agencies as appropriate, lead a 
     regular, ongoing interagency process to identify emerging and 
     foundational technologies that--
       (A) are essential to the national security of the United 
     States; and
       (B) are not critical technologies described in 
     subparagraphs (A) through (D) of section 721(a)(7) of the 
     Defense Production Act of 1950 (50 U.S.C. 4565(a)(7)).
       (2) Interagency process.--The interagency process required 
     under paragraph (1) shall--
       (A) be informed by multiple sources of information, 
     including--
       (i) publicly available information;
       (ii) classified information, including relevant information 
     provided by the Director of National Intelligence;
       (iii) information relating to reviews and investigations of 
     transactions by the Committee on Foreign Investment in the 
     United States under section 721 of the Defense Production Act 
     of 1950 (50 U.S.C. 4565); and
       (iv) information provided by the advisory committees 
     established by the Secretary to advise the Under Secretary of 
     Commerce for Industry and Security on controls under the 
     Export Administration Regulations, including the Emerging 
     Technology and Research Advisory Committee.
       (B) take into account--
       (i) the development of emerging and foundational 
     technologies in other countries;
       (ii) the effect export controls imposed pursuant to this 
     section may have on the development of the technologies in 
     the United States; and
       (iii) the effectiveness of export controls imposed pursuant 
     to this section on limiting the proliferation of emerging and 
     foundational technologies to foreign countries;
       (C) provide for the nomination of an emerging or 
     foundational technology to be identified under subsection (a) 
     by the Secretary, the Secretary of Defense, the Secretary of 
     State, the Secretary of Energy, or the heads of other Federal 
     agencies as appropriate;
       (D) ensure that, not later than 60 days after the 
     nomination of an emerging or foundational technology under 
     subparagraph (C), the Secretary makes a determination, in 
     coordination with the Secretary of Defense, the Secretary of 
     State, the Secretary of Energy, and the heads of other 
     Federal agencies as appropriate, regarding whether additional 
     or modified controls on the technology under this section are 
     warranted, including through informing a person that a 
     license is required to export the technology, or that more 
     time and input from the sources described in this paragraph 
     is needed before a final determination is made to issue a 
     rule to impose controls over such technology; and
       (E) include a notice and comment period.
       (b) Commerce Controls.--
       (1) In general.--The Secretary shall, except to the extent 
     inconsistent with the authorities described in subsection 
     (a)(1)(B), establish appropriate controls on the export, 
     reexport, or transfer of technology identified pursuant to 
     subsection (a) and subject to the Export Administration 
     Regulations, including by publishing additional regulations.
       (2) Levels of control.--
       (A) In general.--The Secretary may, in coordination with 
     the Secretary of Defense, the Secretary of Energy, the 
     Secretary of State, and the heads of other Federal agencies 
     as appropriate, specify the level of control to apply under 
     paragraph (1) with respect to the export of technology 
     described in that paragraph, including a requirement for a 
     license or other authorization, to export, reexport, or 
     transfer of that technology.
       (B) Considerations.--In determining under subparagraph (A) 
     the level of control that is appropriate for technology 
     described in paragraph (1), the Secretary shall take into 
     account--
       (i) lists of countries to which exports from the United 
     States are restricted; and
       (ii) the potential end uses and end users of the 
     technology.
       (C) Minimum requirements.--The Secretary shall, at a 
     minimum and except as required by paragraph (4), require a 
     license to export, reexport, or transfer technology described 
     in paragraph (1) to or in a country subject to an embargo, 
     including an arms embargo, imposed by the United States.
       (3) Review of license applications.--
       (A) Procedures.--The procedures set forth in Executive 
     Order 12981 (50 U.S.C. 4603 note; relating to the 
     administration of export controls) or any successor order, 
     shall apply to the review of an application for a license for 
     the export, reexport, or transfer of technology described in 
     paragraph (1).
       (B) Consideration of information relating to national 
     security.--In reviewing an application for a license or other 
     authorization for the export, reexport, or transfer of 
     technology described in paragraph (1), the Secretary shall 
     take into account information provided by the Director of 
     National Intelligence regarding any threat to the national 
     security of the United States posed by the proposed export, 
     reexport, or transfer. The Director of National Intelligence 
     shall provide such information on the request of the 
     Secretary.
       (C) Disclosure relating to collaborative arrangements.--In 
     the case of an application for a license or other 
     authorization for the export, reexport, or transfer of 
     technology described in paragraph (1) submitted by or on 
     behalf of a joint venture, joint development agreement, or 
     similar collaborative arrangement, the Secretary may require 
     the applicant to identify, in addition to any foreign person 
     participating in the arrangement, any foreign person with 
     significant ownership interest in a foreign person 
     participating in the arrangement.
       (4) Exceptions.--
       (A) Mandatory exception.--The Secretary may not control 
     under this subsection the export of any technology described 
     in paragraph (1) if the regulation of that technology is 
     prohibited under any other provision of law.
       (B) Regulatory exemptions.--In prescribing regulations 
     under paragraph (1), the Secretary may include appropriate 
     regulatory exemptions to the requirements of that paragraph 
     for the export, reexport, or transfer of technology described 
     in paragraph (1).
       (c) Multilateral Controls.--
       (1) In general.--The Secretary of State, in coordination 
     with the Secretary, the Secretary of Defense, the Secretary 
     of Energy, and heads of other Federal agencies as 
     appropriate, shall propose to the relevant multilateral 
     export control regimes in the following year that a 
     technology identified through the interagency process 
     required under subsection (a) be added to the list of 
     technology controlled by such regimes.
       (2) Review of continued unilateral export controls.--The 
     Secretary, with respect to those items on the Commerce 
     Control List maintained under part 774 of title 15, Code of 
     Federal Regulations, and in coordination with the Secretary 
     of Defense, the Secretary of Energy, and the Secretary of 
     State, and the Secretary of State, with respect to those 
     items on the United States Munitions List and in coordination 
     with the Secretary of Defense and the heads of other Federal 
     agencies as appropriate, shall determine whether national 
     security concerns warrant continued unilateral export 
     controls over a technology proposed for multilateral control 
     under paragraph (1) if the relevant multilateral export 
     control regime does not agree to list such technology on its 
     control list within three years of a proposal by the United 
     States.
       (d) Report.--Not later than 180 days after the date of the 
     enactment of this Act, and not less frequently than every 180 
     days thereafter, the Secretary, in coordination with the 
     Secretary of Defense, the Secretary of State, the Secretary 
     of Energy, and the heads of other Federal agencies as 
     appropriate, shall submit to the Committee on Foreign 
     Investment in the United States on a semiannual basis a 
     report on updates of any key actions taken pursuant to this 
     section.
       (e) Rule of Construction.--Nothing in this section shall be 
     construed to alter or limit--
       (1) the authority of the President and the Secretary of 
     State to designate those items that are considered to be 
     defense articles or defense services for purposes of the Arms 
     Export Control Act (22 U.S.C. 2751 et seq.) or to otherwise 
     regulate such items; or
       (2) the authority of the President under the Atomic Energy 
     Act of 1954 (42 U.S.C. 2011 et seq.), the Nuclear Non-
     Proliferation Act of 1978 (22 U.S.C. 3201 et seq.), the 
     Energy Reorganization Act of 1974 (42 U.S.C. 5801 et seq.), 
     this title, or any other provision of law relating to the 
     control of exports.
       (f) Sense of Congress.--It is the sense of the Congress 
     that the President should request in the annual budget of the 
     President submitted under section 1105(a) of title 31, United 
     States Code, sufficient resources to

[[Page H5685]]

     enable the relevant departments and agencies to effectively 
     implement this section.

     SEC. 819. REVIEW RELATING TO COUNTRIES SUBJECT TO 
                   COMPREHENSIVE UNITED STATES ARMS EMBARGO.

       (a) In General.--The Secretary, the Secretary of Defense, 
     the Secretary of Energy, the Secretary of State, and the 
     heads of other Federal agencies as appropriate, shall conduct 
     a review of--
       (1) section 744.21 of title 15, Code of Federal 
     Regulations, including to assess whether the current and 
     anticipated risks of direct or indirect diversion, such as 
     from policies and practices that effectively obscure 
     distinctions between civil and military end-users and end-
     uses, require that the scope of control under such section 
     should be expanded to apply to exports, reexports, or 
     transfers for military end uses and military end users in 
     countries that are subject to a comprehensive United States 
     arms embargo and countries that are subject to a United 
     Nations arms embargo;
       (2) entries on the Commerce Control List maintained under 
     part 774 of title 15, Code of Federal Regulations, that do 
     not impose license requirements for exports, reexports, or 
     transfers of items to countries subject to a comprehensive 
     United States arms embargo;
       (3) whether there should be a presumption of denial for an 
     application for a license to export, reexport, or transfer an 
     item on the Commerce Control List subject to national 
     security controls or regional stability controls under part 
     742 of the Export Administration Regulations if that item is 
     reasonably likely to contribute, directly or indirectly, to 
     the military or intelligence capabilities of any country with 
     respect to which the United States has in place an arms 
     embargo, sanctions, or comparable restrictions, including to 
     or within any country listed in Country Group D:5 in 
     Supplement No. 1 to part 740 of the Export Administration 
     Regulations;
       (4) whether there should be a presumption of denial for an 
     application for a license to export, reexport, or transfer an 
     emerging or foundational technology identified in section 
     818(a) to or within a country identified in section 744.21 of 
     title 15, Code of Federal Regulations or Country Group E in 
     Supplement No. 1 to part 740 of the Export Administration 
     Regulations; and
       (5) without limiting the effect of paragraphs (3) and (4), 
     whether there should be a presumption of approval for an 
     application for a license to export, reexport, or transfer an 
     item on the Commerce Control List if that item is for a civil 
     end use.
       (b) Implementation of Results of Review.--Not later than 
     270 days after the date of the enactment of this Act, the 
     Secretary shall implement the results of the review conducted 
     under subsection (a).

     SEC. 820. PENALTIES.

       (a) Unlawful Acts.--
       (1) In general.--It shall be unlawful for a person to 
     violate, attempt to violate, conspire to violate, or cause a 
     violation of this subtitle or of any regulation, order, 
     license, or other authorization issued under this subtitle, 
     including any of the unlawful acts described in paragraph 
     (2).
       (2) Specific unlawful acts.--The unlawful acts described in 
     this paragraph are the following:
       (A) No person may engage in any conduct prohibited by or 
     contrary to, or refrain from engaging in any conduct required 
     by this subtitle, the Export Administration Regulations, or 
     any order, license or authorization issued thereunder.
       (B) No person may cause or aid, abet, counsel, command, 
     induce, procure, permit, or approve the doing of any act 
     prohibited, or the omission of any act required by this 
     subtitle, the Export Administration Regulations, or any 
     order, license or authorization issued thereunder.
       (C) No person may solicit or attempt a violation of this 
     subtitle, the Export Administration Regulations, or any 
     order, license or authorization issued thereunder.
       (D) No person may conspire or act in concert with one or 
     more other persons in any manner or for any purpose to bring 
     about or to do any act that constitutes a violation of this 
     subtitle, the Export Administration Regulations, or any 
     order, license or authorization issued thereunder.
       (E) No person may order, buy, remove, conceal, store, use, 
     sell, loan, dispose of, transfer, transport, finance, 
     forward, or otherwise service, in whole or in part, or 
     conduct negotiations to facilitate such activities for, any 
     item exported or to be exported from the United States, or 
     that is otherwise subject to the Export Administration 
     Regulations, with knowledge that a violation of this 
     subtitle, the Export Administration Regulations, or any 
     order, license or authorization issued thereunder, has 
     occurred, is about to occur, or is intended to occur in 
     connection with the item unless valid authorization is 
     obtained therefor.
       (F) No person may make any false or misleading 
     representation, statement, or certification, or falsify or 
     conceal any material fact, either directly to the Department 
     of Commerce, or an official of any other United States 
     agency, including the Department of Homeland Security and the 
     Department of Justice, or indirectly through any other 
     person--
       (i) in the course of an investigation or other action 
     subject to the Export Administration Regulations;
       (ii) in connection with the preparation, submission, 
     issuance, use, or maintenance of any export control document 
     or any report filed or required to be filed pursuant to the 
     Export Administration Regulations; or
       (iii) for the purpose of or in connection with effecting 
     any export, reexport, or transfer of an item subject to the 
     Export Administration Regulations or a service or other 
     activity of a United States person described in section 814.
       (G) No person may engage in any transaction or take any 
     other action with intent to evade the provisions of this 
     subtitle, the Export Administration Regulations, or any 
     order, license, or authorization issued thereunder.
       (H) No person may fail or refuse to comply with any 
     reporting or recordkeeping requirements of the Export 
     Administration Regulations or of any order, license, or 
     authorization issued thereunder.
       (I) Except as specifically authorized in the Export 
     Administration Regulations or in writing by the Department of 
     Commerce, no person may alter any license, authorization, 
     export control document, or order issued under the Export 
     Administration Regulations.
       (J) No person may take any action that is prohibited by a 
     denial order issued by the Department of Commerce to prevent 
     imminent violations of this subtitle, the Export 
     Administration Regulations, or any order, license or 
     authorization issued thereunder.
       (3) Additional requirements.--For purposes of subparagraph 
     (G), any representation, statement, or certification made by 
     any person shall be deemed to be continuing in effect. Each 
     person who has made a representation, statement, or 
     certification to the Department of Commerce relating to any 
     order, license, or other authorization issued under this 
     subtitle shall notify the Department of Commerce, in writing, 
     of any change of any material fact or intention from that 
     previously represented, stated, or certified, immediately 
     upon receipt of any information that would lead a reasonably 
     prudent person to know that a change of material fact or 
     intention had occurred or may occur in the future.
       (b) Criminal Penalty.--A person who willfully commits, 
     willfully attempts to commit, or willfully conspires to 
     commit, or aids and abets in the commission of, an unlawful 
     act described in subsection (a)--
       (1) shall be fined not more than $1,000,000; and
       (2) in the case of the individual, shall be imprisoned for 
     not more than 20 years, or both.
       (c) Civil Penalties.--
       (1) Authority.--The President may impose the following 
     civil penalties on a person for each violation by that person 
     of this subtitle or any regulation, order, or license issued 
     under this subtitle, for each violation:
       (A) A fine of not more than $300,000 or an amount that is 
     twice the value of the transaction that is the basis of the 
     violation with respect to which the penalty is imposed, 
     whichever is greater.
       (B) Revocation of a license issued under this subtitle to 
     the person.
       (C) A prohibition on the person's ability to export, 
     reexport, or transfer any items, whether or not subject to 
     controls under this subtitle.
       (2) Procedures.--Any civil penalty under this subsection 
     may be imposed only after notice and opportunity for an 
     agency hearing on the record in accordance with sections 554 
     through 557 of title 5, United States Code.
       (3) Standards for levels of civil penalty.--The Secretary 
     may by regulation provide standards for establishing levels 
     of civil penalty under this subsection based upon factors 
     such as the seriousness of the violation, the culpability of 
     the violator, and such mitigating factors as the violator's 
     record of cooperation with the Government in disclosing the 
     violation.
       (d) Criminal Forfeiture of Property Interest and 
     Proceeds.--
       (1) Forfeiture.--Any person who is convicted under 
     subsection (b) of a violation of a control imposed under 
     section 813 (or any regulation, order, or license issued with 
     respect to such control) shall, in addition to any other 
     penalty, forfeit to the United States--
       (A) any of that person's interest in, security of, claim 
     against, or property or contractual rights of any kind in the 
     tangible items that were the subject of the violation;
       (B) any of that person's interest in, security of, claim 
     against, or property or contractual rights of any kind in 
     tangible property that was used in the violation; and
       (C) any of that person's property constituting, or derived 
     from, any proceeds obtained directly or indirectly as a 
     result of the violation.
       (2) Procedures.--The procedures in any forfeiture under 
     this subsection, and the duties and authority of the courts 
     of the United States and the Attorney General with respect to 
     any forfeiture action under this subsection or with respect 
     to any property that may be subject to forfeiture under this 
     subsection, shall be governed by the provisions of section 
     1963 of title 18, United States Code.
       (e) Prior Convictions.--
       (1) License bar.--
       (A) In general.--The Secretary may--
       (i) deny the eligibility of any person convicted of a 
     criminal violation described in subparagraph (B) to export, 
     reexport, or transfer outside the United States any item, 
     whether or not subject to controls under this subtitle, for a 
     period of up to 10 years beginning on the date of the 
     conviction; and

[[Page H5686]]

       (ii) revoke any license or other authorization to export, 
     reexport, or transfer items that was issued under this 
     subtitle and in which such person has an interest at the time 
     of the conviction.
       (B) Violations.--The violations referred to in subparagraph 
     (A) are any criminal violations of, or criminal attempt or 
     conspiracy to violate--
       (i) this subtitle (or any regulation, license, or order 
     issued under this subtitle);
       (ii) any regulation, license, or order issued under the 
     International Emergency Economic Powers Act;
       (iii) section 371, 554, 793, 794, or 798 of title 18, 
     United States Code;
       (iv) section 1001 of title 18, United States Code;
       (v) section 4(b) of the Internal Security Act of 1950 (50 
     U.S.C. 783(b)); or
       (vi) section 38 of the Arms Export Control Act (22 U.S.C. 
     2778).
       (2) Application to other parties.--The Secretary may 
     exercise the authority under paragraph (1) with respect to 
     any person related, through affiliation, ownership, control, 
     position of responsibility, or other connection in the 
     conduct of trade or business, to any person convicted of any 
     violation of law set forth in paragraph (1), upon a showing 
     of such relationship with the convicted party, and subject to 
     the procedures set forth in subsection (c)(2).
       (f) Other Authorities.--Nothing in subsection (c), (d), or 
     (e) limits--
       (1) the availability of other administrative or judicial 
     remedies with respect to violations of this subtitle, or any 
     regulation, order, license or other authorization issued 
     under this subtitle;
       (2) the authority to compromise and settle administrative 
     proceedings brought with respect to violations of this 
     subtitle, or any regulation, order, license, or other 
     authorization issued under this subtitle; or
       (3) the authority to compromise, remit or mitigate seizures 
     and forfeitures pursuant to section 1(b) of title VI of the 
     Act of June 15, 1917 (22 U.S.C. 401(b)).

     SEC. 821. ENFORCEMENT.

       (a) Authorities.--In order to enforce this subtitle, the 
     Secretary, on behalf of the President shall exercise, in 
     addition to relevant enforcement authorities of other Federal 
     agencies, the authority to--
       (1) issue orders and guidelines;
       (2) require, inspect, and obtain books, records, and any 
     other information from any person subject to the provisions 
     of this subtitle;
       (3) administer oaths or affirmations and by subpoena 
     require any person to appear and testify or to appear and 
     produce books, records, and other writings, or both;
       (4) conduct investigations (including undercover) in the 
     United States and in other countries using all applicable 
     laws of the United States, including intercepting any wire, 
     oral, and electronic communications, conducting electronic 
     surveillance, using pen registers and trap and trace devices, 
     and carrying out acquisitions, to the extent authorized under 
     chapters 119, 121, and 206 of title 18, United States Code;
       (5) inspect, search, detain, seize, or issue temporary 
     denial orders with respect to items, in any form, that are 
     subject to controls under this subtitle, or conveyances on 
     which it is believed that there are items that have been, are 
     being, or are about to be exported, reexported, or 
     transferred in violation of this subtitle, or any 
     regulations, order, license, or other authorization issued 
     thereunder;
       (6) carry firearms;
       (7) conduct prelicense inspections and post-shipment 
     verifications; and
       (8) execute warrants and make arrests.
       (b) Enforcement of Subpoenas.--In the case of contumacy by, 
     or refusal to obey a subpoena issued to, any person under 
     subsection (a)(3), a district court of the United States, 
     after notice to such person and a hearing, shall have 
     jurisdiction to issue an order requiring such person to 
     appear and give testimony or to appear and produce books, 
     records, and other writings, regardless of format, that are 
     the subject of the subpoena. Any failure to obey such order 
     of the court may be punished by such court as a contempt 
     thereof.
       (c) Best Practice Guidelines.--
       (1) In general.--The Secretary, in consultation with the 
     heads of other appropriate Federal agencies, should publish 
     and update ``best practices'' guidelines to assist persons in 
     developing and implementing, on a voluntary basis, effective 
     export control programs in compliance with the regulations 
     issued under this subtitle.
       (2) Export compliance program.--The implementation by a 
     person of an effective export compliance program and a high 
     quality overall export compliance effort by a person should 
     ordinarily be given weight as mitigating factors in a civil 
     penalty action against the person under this subtitle.
       (d) Reference to Enforcement.--For purposes of this 
     section, a reference to the enforcement of, or a violation 
     of, this subtitle includes a reference to the enforcement or 
     a violation of any regulation, order, license or other 
     authorization issued pursuant to this subtitle.
       (e) Immunity.--A person shall not be excused from complying 
     with any requirements under this section because of the 
     person's privilege against self-incrimination, but the 
     immunity provisions of section 6002 of title 18, United 
     States Code, shall apply with respect to any individual who 
     specifically claims such privilege.
       (f) Confidentiality of Information.--
       (1) Exemptions from disclosure.--
       (A) In general.--Information obtained under this subtitle 
     may be withheld from disclosure only to the extent permitted 
     by statute, except that information described in subparagraph 
     (B) shall be withheld from public disclosure and shall not be 
     subject to disclosure under section 552(b)(3) of title 5, 
     United States Code, unless the release of such information is 
     determined by the Secretary to be in the national interest.
       (B) Information described.--Information described in this 
     subparagraph is information submitted or obtained in 
     connection with an application for a license or other 
     authorization to export, reexport, or transfer items, engage 
     in other activities, a recordkeeping or reporting 
     requirement, enforcement activity, or other operations under 
     this subtitle, including--
       (i) the license application, license, or other 
     authorization itself;
       (ii) classification or advisory opinion requests, and the 
     response thereto;
       (iii) license determinations, and information pertaining 
     thereto;
       (iv) information or evidence obtained in the course of any 
     investigation; and
       (v) information obtained or furnished in connection with 
     any international agreement, treaty, or other obligation.
       (2) Information to the congress and GAO.--
       (A) In general.--Nothing in this section shall be construed 
     as authorizing the withholding of information from the 
     Congress or from the Government Accountability Office.
       (B) Availability to the congress.--
       (i) In general.--Any information obtained at any time under 
     any provision of the Export Administration Act of 1979 (as in 
     effect on the day before the date of the enactment of this 
     Act and as continued in effect pursuant to the International 
     Emergency Economic Powers Act), under the Export 
     Administration Regulations, or under this subtitle, including 
     any report or license application required under any such 
     provision, shall be made available to a committee or 
     subcommittee of Congress of appropriate jurisdiction, upon 
     the request of the chairman or ranking minority member of 
     such committee or subcommittee.
       (ii) Prohibition on further disclosure.--No such committee 
     or subcommittee, or member thereof, may disclose any 
     information made available under clause (i), that is 
     submitted on a confidential basis unless the full committee 
     determines that the withholding of that information is 
     contrary to the national interest.
       (C) Availability to GAO.--
       (i) In general.--Information described in clause (i) of 
     subparagraph (B) shall be subject to the limitations 
     contained in section 716 of title 31, United States Code.
       (ii) Prohibition on further disclosure.--An officer or 
     employee of the Government Accountability Office may not 
     disclose, except to the Congress in accordance with this 
     paragraph, any such information that is submitted on a 
     confidential basis or from which any individual can be 
     identified.
       (3) Information sharing.--
       (A) In general.--Any Federal official described in section 
     815(a) who obtains information that is relevant to the 
     enforcement of this subtitle, including information 
     pertaining to any investigation, shall furnish such 
     information to each appropriate department, agency, or office 
     with enforcement responsibilities under this section to the 
     extent consistent with the protection of intelligence, 
     counterintelligence, and law enforcement sources, methods, 
     and activities.
       (B) Exceptions.--The provisions of this paragraph shall not 
     apply to information subject to the restrictions set forth in 
     section 9 of title 13, United States Code, and return 
     information, as defined in subsection (b) of section 6103 of 
     the Internal Revenue Code of 1986 (26 U.S.C. 6103(b)), may be 
     disclosed only as authorized by that section.
       (C) Exchange of information.--The President shall ensure 
     that the heads of departments, agencies, and offices with 
     enforcement authorities under this subtitle, consistent with 
     protection of law enforcement and its sources and methods--
       (i) exchange any licensing and enforcement information with 
     one another that is necessary to facilitate enforcement 
     efforts under this section; and
       (ii) consult on a regular basis with one another and with 
     the head of other departments, agencies, and offices that 
     obtain information subject to this paragraph, in order to 
     facilitate the exchange of such information.
       (D) Information sharing with federal agencies.--Licensing 
     or enforcement information obtained under this subtitle may 
     be shared with departments, agencies, and offices that do not 
     have enforcement authorities under this subtitle on a case-
     by-case basis.
       (g) Reporting Requirements.--In the administration of this 
     section, reporting requirements shall be designed to reduce 
     the cost of reporting, recordkeeping, and documentation to 
     the extent consistent with effective enforcement and 
     compilation of useful trade statistics. Reporting, 
     recordkeeping, and documentation requirements shall be 
     periodically reviewed and revised in the light of 
     developments in the field of information technology.
       (h) Civil Forfeiture.--
       (1) In general.--Any tangible items seized under subsection 
     (a) by designated officers or

[[Page H5687]]

     employees shall be subject to forfeiture to the United States 
     in accordance with applicable law, except that property 
     seized shall be returned if the property owner is not found 
     guilty of a civil or criminal violation under section 819.
       (2) Procedures.--Any seizure or forfeiture under this 
     subsection shall be carried out in accordance with the 
     procedures set forth in section 981 of title 18, United 
     States Code.
       (i) Rule of Construction.--Nothing in this Act shall be 
     construed to limit or otherwise affect the enforcement 
     authorities of the Department of Homeland Security which may 
     also complement those set forth herein.

     SEC. 822. ADMINISTRATIVE PROCEDURE.

       (a) In General.--The functions exercised under this 
     subtitle shall not be subject to sections 551, 553 through 
     559, and 701 through 706 of title 5, United States Code.
       (b) Administrative Law Judges.--The Secretary is authorized 
     to appoint an administrative law judge, and may designate 
     administrative law judges from other Federal agencies who are 
     provided pursuant to a legally authorized interagency 
     agreement with the Department of Commerce, and consistent 
     with the provisions of section 3105 of title 5, United States 
     Code.
       (c) Amendments to Regulations.--The President shall notify 
     in advance the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Foreign Affairs of 
     the House of Representatives of any proposed amendments to 
     the Export Administration Regulations with an explanation of 
     the intent and rationale of such amendments.

     SEC. 823. REVIEW OF INTERAGENCY DISPUTE RESOLUTION PROCESS.

       (a) In General.--The President shall review and evaluate 
     the interagency export license referral, review, and 
     escalation processes for dual-use items and munitions under 
     the licensing jurisdiction of the Department of Commerce or 
     any other Federal agency, as appropriate, to determine 
     whether current practices and procedures are consistent with 
     established national security and foreign policy objectives.
       (b) Report.--Not later than 180 days after the date of the 
     enactment of this Act, the President shall submit to the 
     appropriate congressional committees a report that contains 
     the results of the review carried out under subsection (a).
       (c) Operating Committee for Export Policy.--In any case in 
     which the Operating Committee for Export Policy established 
     by Executive Order 12981 (December 5, 1991; relating to 
     Administration of Export Controls) is meeting to conduct an 
     interagency dispute resolution relating to applications for 
     export licenses under the Export Administration Regulations, 
     matters relating to jet engine hot section technology, 
     commercial communication satellites, and emerging or 
     foundational technology shall be decided by majority vote.
       (d) Appropriate Congressional Committees Defined.--In this 
     section, the term ``appropriate congressional committees'' 
     means--
       (1) the Committee on Armed Services and the Committee on 
     Foreign Affairs of the House of Representatives; and
       (2) the Committee on Armed Services and the Committee on 
     Banking, Housing, and Urban Affairs of the Senate.

     SEC. 824. COORDINATION WITH OTHER AGENCIES ON COMMODITY 
                   CLASSIFICATION AND REMOVAL OF EXPORT CONTROLS.

       (a) In General.--Notwithstanding any other provision of 
     law, the Secretary shall coordinate with the Secretary of 
     Defense, the Secretary of State, and the Secretary of Energy 
     before taking any of the actions described in subsection (b).
       (b) Actions Described.--The actions described in this 
     subsection are the following:
       (1) Amending the Commerce Control List set forth in 
     Supplement No. 1 to part 774 of the Export Administration 
     Regulations to remove an item from the list.
       (2) Providing a commodity classification determination 
     under section 748.3 of the Export Administration Regulations, 
     including with respect to--
       (A) ``600 series'' items;
       (B) commercial communication satellites (ECCN 9x515);
       (C) emerging and foundational technologies identified under 
     section 818(a);
       (D) ``specially designed'' items under part 774 of title 
     15, Code of Federal Regulations; or
       (E) any other items that the Secretary, in coordination 
     with the Secretary of Defense, the Secretary of State, and 
     the Secretary of Energy, identifies and mutually determines 
     is materially significant enough to warrant interagency 
     consultation before the Secretary determines to add the item 
     to the Commerce Control List and provide the item with a 
     Export Control Classification Number (ECCN).
       (3) Amending the Commerce Control List to remove any 
     control imposed pursuant to subsection (b) of section 818 on 
     the export, reexport, or transfer of an emerging or 
     foundational technology identified under subsection (a) of 
     that section.
       (4) Amending the Export Administration Regulations to 
     expand the scope or application of a license exception 
     authorized by section 740 of the Export Administration 
     Regulations.

     SEC. 825. ANNUAL REPORT TO CONGRESS.

       (a) In General.--The President shall submit to Congress, by 
     December 31 of each year, a report on the implementation of 
     this subtitle during the preceding fiscal year. The report 
     shall include a review of--
       (1) the effect of controls imposed under this subtitle on 
     exports, reexports, and transfers of items in addressing 
     threats to the national security or foreign policy of the 
     United States, including a description of licensing 
     processing times;
       (2) the impact of such controls on the scientific and 
     technological leadership of the United States;
       (3) the consistency with such controls of export controls 
     imposed by other countries;
       (4) efforts to provide exporters with compliance 
     assistance, including specific actions to assist small- and 
     medium-sized businesses;
       (5) a summary of regulatory changes from the prior fiscal 
     year;
       (6) a summary of export enforcement actions, including of 
     actions taken to implement end-use monitoring of dual-use, 
     military, and other items subject to the Export 
     Administration Regulations;
       (7) a summary of approved license applications to 
     proscribed persons;
       (8) efforts undertaken within the previous year to comply 
     with the requirements of section 819, including any critical 
     technologies identified under such section and how or whether 
     such critical technologies were controlled for export; and
       (9) a summary of industrial base assessments conducted 
     during the previous year by the Department of Commerce, 
     including with respect to counterfeit electronics, 
     foundational technologies, and other research and analysis of 
     critical technologies and industrial capabilities of key 
     defense-related sectors.
       (b) Form.--The report required under subsection (a) shall 
     be submitted in unclassified form, but may contain a 
     classified annex.

     SEC. 826. REPEAL.

       (a) In General.--The Export Administration Act of 1979 (50 
     U.S.C. App. 2401 et seq.) (as continued in effect pursuant to 
     the International Emergency Economic Powers Act) is repealed.
       (b) Implementation.--The President shall implement the 
     amendment made by subsection (a) by exercising the 
     authorities of the President under the International 
     Emergency Economic Powers Act (50 U.S.C. 1701 et seq.).

     SEC. 827. EFFECT ON OTHER ACTS.

       (a) In General.--Except as otherwise provided in this 
     subtitle, nothing contained in this subtitle shall be 
     construed to modify, repeal, supersede, or otherwise affect 
     the provisions of any other laws authorizing control over 
     exports, reexports, or transfers of any item, or activities 
     of United States persons subject to the Export Administration 
     Regulations.
       (b) Coordination of Controls.--
       (1) In general.--The authority granted to the President 
     under this subtitle shall be exercised in such manner so as 
     to achieve effective coordination with all export control and 
     sanctions authorities exercised by Federal departments and 
     agencies delegated with authority under this subtitle, 
     particularly the Department of State, the Department of the 
     Treasury, and the Department of Energy.
       (2) Sense of congress.--It is the sense of Congress that in 
     order to achieve effective coordination described in 
     paragraph (1), such Federal departments and agencies--
       (A) should continuously work to create enforceable 
     regulations with respect to the export, reexport, and 
     transfer by United States and foreign persons of commodities, 
     software, technology, and services to various end uses and 
     end users for foreign policy and national security reasons;
       (B) should regularly work to reduce complexity in the 
     system, including complexity caused merely by the existence 
     of structural, definitional, and other non-policy based 
     differences between and among different export control and 
     sanctions systems; and
       (C) should coordinate controls on items exported, 
     reexported, or transferred in connection with a foreign 
     military sale under chapter 2 of the Arms Export Control Act 
     or a commercial sale under section 38 of the Arms Export 
     Control Act to reduce as much unnecessary administrative 
     burden as possible that is a result of differences between 
     the exercise of those two authorities.
       (c) Nonproliferation Controls.--Nothing in this subtitle 
     shall be construed to supersede the procedures published by 
     the President pursuant to section 309(c) of the Nuclear Non-
     Proliferation Act of 1978.

     SEC. 828. TRANSITION PROVISIONS.

       (a) In General.--All delegations, rules, regulations, 
     orders, determinations, licenses, or other forms of 
     administrative action that have been made, issued, conducted, 
     or allowed to become effective under the Export 
     Administration Act of 1979 (as in effect on the day before 
     the date of the enactment of this Act and as continued in 
     effect pursuant to the International Emergency Economic 
     Powers Act), or the Export Administration Regulations, and 
     are in effect as of the date of the enactment of this Act, 
     shall continue in effect according to their terms until 
     modified, superseded, set aside, or revoked under the 
     authority of this subtitle.
       (b) Administrative and Judicial Proceedings.--This subtitle 
     shall not affect any administrative or judicial proceedings 
     commenced, or any applications for licenses made, under the 
     Export Administration Act of 1979 (as in effect on the day 
     before the

[[Page H5688]]

     date of the enactment of this Act and as continued in effect 
     pursuant to the International Emergency Economic Powers Act), 
     or the Export Administration Regulations.
       (c) Certain Determinations and References.--
       (1) State sponsors of terrorism.--Any determination that 
     was made under section 6(j) of the Export Administration Act 
     of 1979 (as in effect on the day before the date of the 
     enactment of this Act and as continued in effect pursuant to 
     the International Emergency Economic Powers Act) shall 
     continue in effect as if the determination had been made 
     under section 814(c) of this Act.
       (2) Reference.--Any reference in any other provision of law 
     to a country the government of which the Secretary of State 
     has determined, for purposes of section 6(j) of the Export 
     Administration Act of 1979 (as in effect on the day before 
     the date of the enactment of this Act and as continued in 
     effect pursuant to the International Emergency Economic 
     Powers Act), is a government that has repeatedly provided 
     support for acts of international terrorism shall be deemed 
     to refer to a country the government of which the Secretary 
     of State has determined, for purposes of section 814(c), is a 
     government that has repeatedly provided support for acts of 
     international terrorism.

                  Subtitle B--Anti-Boycott Act of 2018

     SEC. 831. SHORT TITLE.

       This subtitle may be cited as the ``Anti-Boycott Act of 
     2018''.

     SEC. 832. STATEMENT OF POLICY.

       Congress declares it is the policy of the United States--
       (1) to oppose restrictive trade practices or boycotts 
     fostered or imposed by any foreign country against other 
     countries friendly to the United States or against any United 
     States person;
       (2) to encourage and, in specified cases, require United 
     States persons engaged in the export of goods or technology 
     or other information to refuse to take actions, including 
     furnishing information or entering into or implementing 
     agreements, which have the effect of furthering or supporting 
     the restrictive trade practices or boycotts fostered or 
     imposed by any foreign country against a country friendly to 
     the United States or any United States person; and
       (3) to foster international cooperation and the development 
     of international rules and institutions to assure reasonable 
     access to world supplies.

     SEC. 833. FOREIGN BOYCOTTS.

       (a) Prohibitions and Exceptions.--
       (1) Prohibitions.--For the purpose of implementing the 
     policies set forth in section 832, the President shall issue 
     regulations prohibiting any United States person, with 
     respect to that person's activities in the interstate or 
     foreign commerce of the United States, from taking or 
     knowingly agreeing to take any of the following actions with 
     intent to comply with, further, or support any boycott 
     fostered or imposed by any foreign country, against a country 
     which is friendly to the United States and which is not 
     itself the object of any form of boycott pursuant to United 
     States law or regulation:
       (A) Refusing, or requiring any other person to refuse, to 
     do business with or in the boycotted country, with any 
     business concern organized under the laws of the boycotted 
     country, with any national or resident of the boycotted 
     country, or with any other person, pursuant to an agreement 
     with, a requirement of, or a request from or on behalf of the 
     boycotting country. The mere absence of a business 
     relationship with or in the boycotted country with any 
     business concern organized under the laws of the boycotted 
     country, with any national or resident of the boycotted 
     country, or with any other person, does not indicate the 
     existence of the intent required to establish a violation of 
     regulations issued to carry out this subparagraph.
       (B) Refusing, or requiring any other person to refuse, to 
     employ or otherwise discriminating against any United States 
     person on the basis of race, religion, sex, or national 
     origin of that person or of any owner, officer, director, or 
     employee of such person.
       (C) Furnishing information with respect to the race, 
     religion, sex, or national origin of any United States person 
     or of any owner, officer, director, or employee of such 
     person.
       (D) Furnishing information about whether any person has, 
     has had, or proposes to have any business relationship 
     (including a relationship by way of sale, purchase, legal or 
     commercial representation, shipping or other transport, 
     insurance, investment, or supply) with or in the boycotted 
     country, with any business concern organized under the laws 
     of the boycotted country, with any national or resident of 
     the boycotted country, or with any other person which is 
     known or believed to be restricted from having any business 
     relationship with or in the boycotting country. Nothing in 
     this subparagraph shall prohibit the furnishing of normal 
     business information in a commercial context as defined by 
     the Secretary.
       (E) Furnishing information about whether any person is a 
     member of, has made contributions to, or is otherwise 
     associated with or involved in the activities of any 
     charitable or fraternal organization which supports the 
     boycotted country.
       (F) Paying, honoring, confirming, or otherwise implementing 
     a letter of credit which contains any condition or 
     requirement compliance with which is prohibited by 
     regulations issued pursuant to this paragraph, and no United 
     States person shall, as a result of the application of this 
     paragraph, be obligated to pay or otherwise honor or 
     implement such letter of credit.
       (2) Exceptions.--Regulations issued pursuant to paragraph 
     (1) shall provide exceptions for--
       (A) complying or agreeing to comply with requirements--
       (i) prohibiting the import of goods or services from the 
     boycotted country or goods produced or services provided by 
     any business concern organized under the laws of the 
     boycotted country or by nationals or residents of the 
     boycotted country; or
       (ii) prohibiting the shipment of goods to the boycotting 
     country on a carrier of the boycotted country, or by a route 
     other than that prescribed by the boycotting country or the 
     recipient of the shipment;
       (B) complying or agreeing to comply with import and 
     shipping document requirements with respect to the country of 
     origin, the name of the carrier and route of shipment, the 
     name of the supplier of the shipment or the name of the 
     provider of other services, except that no information 
     knowingly furnished or conveyed in response to such 
     requirements may be stated in negative, blacklisting, or 
     similar exclusionary terms, other than with respect to 
     carriers or route of shipment as may be permitted by such 
     regulations in order to comply with precautionary 
     requirements protecting against war risks and confiscation;
       (C) complying or agreeing to comply in the normal course of 
     business with the unilateral and specific selection by a 
     boycotting country, or national or resident thereof, of 
     carriers, insurers, suppliers of services to be performed 
     within the boycotting country or specific goods which, in the 
     normal course of business, are identifiable by source when 
     imported into the boycotting country;
       (D) complying or agreeing to comply with export 
     requirements of the boycotting country relating to shipments 
     or transshipments of exports to the boycotted country, to any 
     business concern of or organized under the laws of the 
     boycotted country, or to any national or resident of the 
     boycotted country;
       (E) compliance by an individual or agreement by an 
     individual to comply with the immigration or passport 
     requirements of any country with respect to such individual 
     or any member of such individual's family or with requests 
     for information regarding requirements of employment of such 
     individual within the boycotting country; and
       (F) compliance by a United States person resident in a 
     foreign country or agreement by such person to comply with 
     the laws of that country with respect to his activities 
     exclusively therein, and such regulations may contain 
     exceptions for such resident complying with the laws or 
     regulations of that foreign country governing imports into 
     such country of trademarked, trade named, or similarly 
     specifically identifiable products, or components of products 
     for his own use, including the performance of contractual 
     services within that country, as may be defined by such 
     regulations.
       (3) Special rules.--Regulations issued pursuant to 
     paragraphs (2)(C) and (2)(F) shall not provide exceptions 
     from paragraphs (1)(B) and (1)(C).
       (4) Rule of construction.--Nothing in this subsection may 
     be construed to supersede or limit the operation of the 
     antitrust or civil rights laws of the United States.
       (5) Application.--This section shall apply to any 
     transaction or activity undertaken, by or through a United 
     States person or any other person, with intent to evade the 
     provisions of this section as implemented by the regulations 
     issued pursuant to this subsection, and such regulations 
     shall expressly provide that the exceptions set forth in 
     paragraph (2) shall not permit activities or agreements 
     (expressed or implied by a course of conduct, including a 
     pattern of responses) otherwise prohibited, which are not 
     within the intent of such exceptions.
       (b) Foreign Policy Controls.--
       (1) In general.--In addition to the regulations issued 
     pursuant to subsection (a), regulations issued under subtitle 
     A to carry out the policies set forth in section 812(1)(D) 
     shall implement the policies set forth in this section.
       (2) Requirements.--Such regulations shall require that any 
     United States person receiving a request for the furnishing 
     of information, the entering into or implementing of 
     agreements, or the taking of any other action referred to in 
     subsection (a) shall report that fact to the Secretary, 
     together with such other information concerning such request 
     as the Secretary may require for such action as the Secretary 
     considers appropriate for carrying out the policies of that 
     section. Such person shall also report to the Secretary 
     whether such person intends to comply and whether such person 
     has complied with such request. Any report filed pursuant to 
     this paragraph shall be made available promptly for public 
     inspection and copying, except that information regarding the 
     quantity, description, and value of any goods or technology 
     to which such report relates may be kept confidential if the 
     Secretary determines that disclosure thereof would place the 
     United States person involved at a competitive disadvantage. 
     The Secretary shall periodically transmit summaries of the 
     information contained in such reports to the Secretary of 
     State for such action as the Secretary of State, in 
     consultation with the Secretary, considers appropriate for 
     carrying out the policies set forth in section 832.
       (c) Preemption.--The provisions of this section and the 
     regulations issued pursuant

[[Page H5689]]

     thereto shall preempt any law, rule, or regulation of any of 
     the several States or the District of Columbia, or any of the 
     territories or possessions of the United States, or of any 
     governmental subdivision thereof, which law, rule, or 
     regulation pertains to participation in, compliance with, 
     implementation of, or the furnishing of information regarding 
     restrictive trade practices or boycotts fostered or imposed 
     by foreign countries against other countries friendly to the 
     United States.

     SEC. 834. ENFORCEMENT.

       (a) Criminal Penalty.--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 section 833--
       (1) shall, upon conviction, be fined not more than 
     $1,000,000; or
       (2) if a natural person, may be imprisoned for not more 
     than 20 years, or both.
       (b) Civil Penalties.--The President may impose the 
     following civil penalties on a person who violates section 
     833 or any regulation issued under this subtitle:
       (1) A fine of not more than $300,000 or an amount that is 
     twice the value of the transaction that is the basis of the 
     violation with respect to which the penalty is imposed, 
     whichever is greater.
       (2) Revocation of a license issued under title I to the 
     person.
       (3) A prohibition on the person's ability to export, 
     reexport, or transfer any items controlled under subtitle A.
       (c) Procedures.--Any civil penalty or administrative 
     sanction (including any suspension or revocation of authority 
     to export) under this section may be imposed only after 
     notice and opportunity for an agency hearing on the record in 
     accordance with sections 554 through 557 of title 5, United 
     States Code, and shall be subject to judicial review in 
     accordance with chapter 7 of such title.
       (d) Standards for Levels of Civil Penalty.--The President 
     may by regulation provide standards for establishing levels 
     of civil penalty under this section based upon factors such 
     as the seriousness of the violation, the culpability of the 
     violator, and the violator's record of cooperation with the 
     Government in disclosing the violation.

Subtitle C--Sanctions Regarding Missile Proliferation and Chemical and 
                    Biological Weapons Proliferation

     SEC. 841. MISSILE PROLIFERATION CONTROL VIOLATIONS.

       (a) Violations by United States Persons.--
       (1) Sanctions.--
       (A) Sanctionable activity.--The President shall impose the 
     applicable sanctions described in subparagraph (B) if the 
     President determines that a United States person knowingly--
       (i) exports, reexports, or transfers of any item on the 
     MTCR Annex, in violation of the provisions of section 38 (22 
     U.S.C. 2778) or chapter 7 of the Arms Export Control Act, 
     subtitle A, or any regulations or orders issued under any 
     such provisions; or
       (ii) conspires to or attempts to engage in such export, 
     reexport, or transfer.
       (B) Sanctions.--The sanctions that apply to a United States 
     person under subparagraph (A) are the following:
       (i) If the item on the MTCR Annex involved in the export, 
     reexport, or transfer is missile equipment or technology 
     within category II of the MTCR Annex, then the President 
     shall deny to such United States person, for a period of 2 
     years, licenses for the transfer of missile equipment or 
     technology controlled under subtitle A.
       (ii) If the item on the MTCR Annex involved in the export, 
     reexport, or transfer is missile equipment or technology 
     within category I of the MTCR Annex, then the President shall 
     deny to such United States person, for a period of not less 
     than 2 years, all licenses for items the transfer of which is 
     controlled under subtitle A.
       (2) Discretionary sanctions.--In the case of any 
     determination referred to in paragraph (1), the President may 
     pursue any other appropriate penalties under section 820.
       (3) Waiver.--The President may waive the imposition of 
     sanctions under paragraph (1) on a person with respect to a 
     product or service if the President certifies to the Congress 
     that--
       (A) the product or service is essential to the national 
     security of the United States; and
       (B) such person is a sole source supplier of the product or 
     service, the product or service is not available from any 
     alternative reliable supplier, and the need for the product 
     or service cannot be met in a timely manner by improved 
     manufacturing processes or technological developments.
       (b) Transfers of Missile Equipment or Technology by Foreign 
     Persons.--
       (1) Sanctions.--
       (A) Sanctionable activity.--Subject to paragraphs (3) 
     through (7), the President shall impose the applicable 
     sanctions under subparagraph (B) on a foreign person if the 
     President--
       (i) determines that a foreign person knowingly--

       (I) exports, reexports, or transfers any MTCR equipment or 
     technology that contributes to the design, development, or 
     production of missiles in a country that is not an MTCR 
     adherent and would be, if it were United States-origin 
     equipment or technology, subject to the jurisdiction of the 
     United States under subtitle A;
       (II) conspires to or attempts to engage in such export, 
     reexport, or transfer; or
       (III) facilitates such export, reexport, or transfer by any 
     other person; or

       (ii) has made a determination with respect to the foreign 
     person under section 73(a) of the Arms Export Control Act.
       (B) Sanctions.--The sanctions that apply to a foreign 
     person under subparagraph (A) are the following:
       (i) If the item involved in the export, reexport, or 
     transfer is within category II of the MTCR Annex, then the 
     President shall deny, for a period of 2 years, licenses for 
     the transfer to such foreign person of missile equipment or 
     technology the transfer of which is controlled under subtitle 
     A.
       (ii) If the item involved in the export, reexport, or 
     transfer is within category I of the MTCR Annex, then the 
     President shall deny, for a period of not less than 2 years, 
     licenses for the transfer to such foreign person of items the 
     transfer of which is controlled under subtitle A.
       (2) Inapplicability with respect to MTCR adherents.--
     Paragraph (1) does not apply with respect to--
       (A) any export, reexport, or transfer that is authorized by 
     the laws of an MTCR adherent, if such authorization is not 
     obtained by misrepresentation or fraud; or
       (B) any export, reexport, or transfer of an item to an end 
     user in a country that is an MTCR adherent.
       (3) Effect of enforcement actions by MTCR adherents.--
     Sanctions set forth in paragraph (1) may not be imposed under 
     this subsection on a person with respect to acts described in 
     such paragraph or, if such sanctions are in effect against a 
     person on account of such acts, such sanctions shall be 
     terminated, if an MTCR adherent is taking judicial or other 
     enforcement action against that person with respect to such 
     acts, or that person has been found by the government of an 
     MTCR adherent to be innocent of wrongdoing with respect to 
     such acts.
       (4) Waiver and report to congress.--
       (A) Waiver authority.--The President may waive the 
     application of paragraph (1) to a foreign person if the 
     President determines that such waiver is essential to the 
     national security of the United States.
       (B) Notification and report to congress.--In the event that 
     the President decides to apply the waiver described in 
     subparagraph (A), the President shall so notify the 
     appropriate congressional committees not less than 20 working 
     days before issuing the waiver. Such notification shall 
     include a report fully articulating the rationale and 
     circumstances which led the President to apply the waiver.
       (5) Additional waiver.--The President may waive the 
     imposition of sanctions under paragraph (1) on a person with 
     respect to a product or service if the President certifies to 
     the appropriate congressional committees that--
       (A) the product or service is essential to the national 
     security of the United States; and
       (B) such person is a sole source supplier of the product or 
     service, the product or service is not available from any 
     alternative reliable supplier, and the need for the product 
     or service cannot be met in a timely manner by improved 
     manufacturing processes or technological developments.
       (6) Exceptions.--The President shall not apply the sanction 
     under this subsection prohibiting the importation of the 
     products of a foreign person--
       (A) in the case of procurement of defense articles or 
     defense services--
       (i) under existing contracts or subcontracts, including the 
     exercise of options for production quantities to satisfy 
     requirements essential to the national security of the United 
     States;
       (ii) if the President determines that the person to which 
     the sanctions would be applied is a sole source supplier of 
     the defense articles or defense services, that the defense 
     articles or defense services are essential to the national 
     security of the United States, and that alternative sources 
     are not readily or reasonably available; or
       (iii) if the President determines that such articles or 
     services are essential to the national security of the United 
     States under defense coproduction agreements or NATO Programs 
     of Cooperation;
       (B) to products or services provided under contracts 
     entered into before the date on which the President publishes 
     his intention to impose the sanctions; or
       (C) to--
       (i) spare parts;
       (ii) component parts, but not finished products, essential 
     to United States products or production;
       (iii) routine services and maintenance of products, to the 
     extent that alternative sources are not readily or reasonably 
     available; or
       (iv) information and technology essential to United States 
     products or production.
       (c) Definitions.--In this section:
       (1) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means--
       (A) the Committee on Foreign Affairs of the House of 
     Representatives; and
       (B) the Committee on Foreign Relations and the Committee on 
     Banking, Housing, and Urban Affairs of the Senate.
       (2) Defense articles; defense services.--The terms 
     ``defense articles'' and ``defense services'' mean those 
     items on the United States Munitions List as defined in 
     section

[[Page H5690]]

     47(7) of the Arms Export Control Act (22 U.S.C. 2794 note).
       (3) Missile.--The term ``missile'' means a category I 
     system as defined in the MTCR Annex.
       (4) Missile technology control regime; mtcr.--The term 
     ``Missile Technology Control Regime'' or ``MTCR'' means the 
     policy statement, between the United States, the United 
     Kingdom, the Federal Republic of Germany, France, Italy, 
     Canada, and Japan, announced on April 16, 1987, to restrict 
     sensitive missile-relevant transfers based on the MTCR Annex, 
     and any amendments thereto.
       (5) MTCR adherent.--The term ``MTCR adherent'' means a 
     country that participates in the MTCR or that, pursuant to an 
     international understanding to which the United States is a 
     party, controls MTCR equipment or technology in accordance 
     with the criteria and standards set forth in the MTCR.
       (6) MTCR annex.--The term ``MTCR Annex'' means the 
     Guidelines and Equipment and Technology Annex of the MTCR, 
     and any amendments thereto.
       (7) Missile equipment or technology; mtcr equipment or 
     technology.--The terms ``missile equipment or technology'' 
     and ``MTCR equipment or technology'' mean those items listed 
     in category I or category II of the MTCR Annex.

     SEC. 842. CHEMICAL AND BIOLOGICAL WEAPONS PROLIFERATION 
                   SANCTIONS.

       (a) Imposition of Sanctions.--
       (1) Determination by the president.--Except as provided in 
     subsection (b)(2), the President shall impose the sanction 
     described in subsection (c) if the President determines that 
     a foreign person has knowingly and materially contributed--
       (A) through the export from the United States of any item 
     that is subject to the jurisdiction of the United States 
     under this subtitle; or
       (B) through the export from any other country of any item 
     that would be, if they were United States goods or 
     technology, subject to the jurisdiction of the United States 
     under this subtitle,
     to the efforts by any foreign country, project, or entity 
     described in paragraph (2) to use, develop, produce, 
     stockpile, or otherwise acquire chemical or biological 
     weapons.
       (2) Countries, projects, or entities receiving 
     assistance.--Paragraph (1) applies in the case of--
       (A) any foreign country that the President determines has, 
     at any time after January 1, 1980--
       (i) used chemical or biological weapons in violation of 
     international law;
       (ii) used lethal chemical or biological weapons against its 
     own nationals; or
       (iii) made substantial preparations to engage in the 
     activities described in clause (i) or (ii);
       (B) any foreign country whose government is determined for 
     purposes of section 914(c) to be a government that has 
     repeatedly provided support for acts of international 
     terrorism; or
       (C) any other foreign country, project, or entity 
     designated by the President for purposes of this section.
       (3) Persons against which sanctions are to be imposed.--A 
     sanction shall be imposed pursuant to paragraph (1) on--
       (A) the foreign person with respect to which the President 
     makes the determination described in that paragraph;
       (B) any successor entity to that foreign person; and
       (C) any foreign person that is a parent, subsidiary, or 
     affiliate of that foreign person if that parent, subsidiary, 
     or affiliate knowingly assisted in the activities which were 
     the basis of that determination.
       (b) Consultations With and Actions by Foreign Government of 
     Jurisdiction.--
       (1) Consultations.--If the President makes the 
     determinations described in subsection (a)(1) with respect to 
     a foreign person, the Congress urges the President to 
     initiate consultations immediately with the government with 
     primary jurisdiction over that foreign person with respect to 
     the imposition of a sanction pursuant to this section.
       (2) Actions by government of jurisdiction.--In order to 
     pursue such consultations with that government, the President 
     may delay imposition of a sanction pursuant to this section 
     for a period of up to 90 days. Following such consultations, 
     the President shall impose the sanction unless the President 
     determines and certifies to the appropriate congressional 
     committees that the Government has taken specific and 
     effective actions, including appropriate penalties, to 
     terminate the involvement of the foreign person in the 
     activities described in subsection (a)(1). The President may 
     delay imposition of the sanction for an additional period of 
     up to 90 days if the President determines and certifies to 
     the Congress that the government is in the process of taking 
     the actions described in the preceding sentence.
       (3) Report to congress.--The President shall report to the 
     appropriate congressional committees, not later than 90 days 
     after making a determination under subsection (a)(1), on the 
     status of consultations with the appropriate government under 
     this subsection, and the basis for any determination under 
     paragraph (2) of this subsection that such government has 
     taken specific corrective actions.
       (c) Sanction.--
       (1) Description of sanction.--The sanction to be imposed 
     pursuant to subsection (a)(1) is, except as provided that the 
     United States Government shall not procure, or enter into any 
     contract for the procurement of, any goods or services from 
     any person described in subsection (a)(3).
       (2) Exceptions.--The President shall not be required to 
     apply or maintain a sanction under this section--
       (A) in the case of procurement of defense articles or 
     defense services--
       (i) under existing contracts or subcontracts, including the 
     exercise of options for production quantities to satisfy 
     United States operational military requirements;
       (ii) if the President determines that the person or other 
     entity to which the sanctions would otherwise be applied is a 
     sole source supplier of the defense articles or defense 
     services, that the defense articles or defense services are 
     essential, and that alternative sources are not readily or 
     reasonably available; or
       (iii) if the President determines that such articles or 
     services are essential to the national security under defense 
     coproduction agreements;
       (B) to products or services provided under contracts 
     entered into before the date on which the President publishes 
     his intention to impose sanctions;
       (C) to--
       (i) spare parts;
       (ii) component parts, but not finished products, essential 
     to United States products or production; or
       (iii) routine servicing and maintenance of products, to the 
     extent that alternative sources are not readily or reasonably 
     available;
       (D) to information and technology essential to United 
     States products or production; or
       (E) to medical or other humanitarian items.
       (d) Termination of Sanctions.--A sanction imposed pursuant 
     to this section shall apply for a period of at least 12 
     months following the imposition of one sanction and shall 
     cease to apply thereafter only if the President determines 
     and certifies to the appropriate congressional committees 
     that reliable information indicates that the foreign person 
     with respect to which the determination was made under 
     subsection (a)(1) has ceased to aid or abet any foreign 
     government, project, or entity in its efforts to acquire 
     chemical or biological weapons capability as described in 
     that subsection.
       (e) Waiver.--
       (1) Criterion for waiver.--The President may waive the 
     application of any sanction imposed on any person pursuant to 
     this section if the President determines and certifies to the 
     appropriate congressional committees that such waiver is 
     important to the national security interests of the United 
     States.
       (2) Notification of and report to congress.--If the 
     President decides to exercise the waiver authority provided 
     in paragraph (1), the President shall so notify the 
     appropriate congressional committees not less than 20 days 
     before the waiver takes effect. Such notification shall 
     include a report fully articulating the rationale and 
     circumstances which led the President to exercise the waiver 
     authority.
       (f) Definitions.--In this section:
       (1) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means--
       (A) the Committee on Foreign Affairs of the House of 
     Representatives; and
       (B) the Committee on Foreign Relations and the Committee on 
     Banking, Housing, and Urban Affairs of the Senate.
       (2) Defense articles; defense services.--The terms 
     ``defense articles'' and ``defense services'' mean those 
     items on the United States Munitions List or are otherwise 
     controlled under the Arms Export Control Act.

                 Subtitle D--Administrative Authorities

     SEC. 851. UNDER SECRETARY OF COMMERCE FOR INDUSTRY AND 
                   SECURITY.

       (a) In General.--The President shall appoint, by and with 
     the advice and consent of the Senate, an Under Secretary of 
     Commerce for Industry and Security who shall carry out all 
     the functions of the Secretary under this title and such 
     other provisions of law that relate to the implementation of 
     the dual-use export system.
       (b) Assistant Secretaries of Commerce.--The President shall 
     appoint, by and with the advice and consent of the Senate, 
     two Assistant Secretaries of Commerce to assist the Under 
     Secretary in carrying out the functions described in 
     paragraph (1).

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
California (Mr. Royce) and the gentleman from California (Mr. Sherman) 
each will control 20 minutes.
  The Chair recognizes the gentleman from California (Mr. Royce).


                             General Leave

  Mr. ROYCE of California. Mr. Speaker, I ask unanimous consent that 
all Members may have 5 legislative days to revise and extend their 
remarks and to include any extraneous material in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. ROYCE of California. Mr. Speaker, I yield 10 minutes to the 
gentleman from Texas (Mr Hensarling), chairman of the Financial 
Services Committee,

[[Page H5691]]

and I ask unanimous consent that he be allowed to control that time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. ROYCE of California. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, over the past decade, we have seen rapid technological 
advances. We have seen an increase in foreign investment in the United 
States, but we have seen it especially from countries like China and 
Russia that pose national security concerns to us.
  Of great alarm, our regulatory system has not kept pace. Mr. 
Pittenger's bill before us today seeks to change that.
  The Foreign Investment Risk Review Modernization Act of 2018 
represents a broad bipartisan agreement to reform our regulatory 
systems to protect both our national security and to protect our 
economic prosperity. Specifically, this bill strengthens national 
security reviews of certain commercial transactions conducted by CFIUS, 
as well as reforms and modernizations in order to bring up to date 
outdated U.S. export control systems.

                              {time}  1345

  That regime is reformed here.
  I want to thank the chairman of the Financial Services Committee, Mr. 
Hensarling, for his leadership on this issue.
  The Committees on Armed Services, on Intelligence, Energy and 
Commerce, Budget, and Oversight and Government Reform also played 
important roles in shaping this legislation. This has been a truly 
collaborative process.
  Mr. Speaker, this body has not addressed exports of dual-use items--
products and services that have both commercial and military 
application--since the Export Administration Act of 1979.
  Since that lapse, nearly 25 years ago, successive administrations 
have relied on emergency authorities that have not kept pace with 
technological advances.
  Today, we are acting to fix that problematic lapse because the United 
States' position as the world's largest exporter of goods and services 
is at risk. We will lose many good-paying jobs if we don't better 
secure advanced technology and if we don't better secure intellectual 
property.
  That is why, this spring, the Foreign Affairs Committee passed the 
Export Control Reform Act of 2018. We passed this legislation. And 
under this approach, reflected in title VIII of the bill before us, 
modernized U.S. export control laws and regulations will continue to 
have broad authority governing the transfer of dual-use items and 
technology to foreign persons, whether that transfer takes place abroad 
or if that transfer takes place here in the United States.
  Let me just highlight a few critical features of the export control 
provisions of the legislation.
  This title of the bill requires that export controls be calibrated 
and continually updated to ensure lasting U.S. leadership in these 
fields: science, technology, engineering, manufacturing, and other 
sectors critical to the industrial base.
  It ensures that sensitive manufacturing know-how, which may include 
such items as written or oral communications, blueprints, engineering 
designs, specifications, are subject to appropriate export controls 
regardless of the nature of the underlying transaction.
  And lastly, it establishes a new authority for the U.S. export 
control agencies and the Department of Defense to identify and 
appropriately control emerging and foundational technologies that may 
be critical to U.S. national security.
  This includes artificial intelligence, robotics, augmented and 
virtual reality, new biotechnologies, new financial technologies, and 
advanced materials.
  Ten years ago, Mr. Sherman and I held a series of hearings to examine 
China's increasingly aggressive policies in the wake of the EAA'S 
expiration. I appreciate his passion for these issues and his 
understanding of the need to balance our economic and national security 
interests.
  We do need a nimble, adaptable system that protects but doesn't 
unduly burden our world-class industries.
  Modernized U.S. export controls and CFIUS reforms are both critical 
to the challenges posed by China and by Russia and by others.
  This bill will help keep America safe, help keep us strong.
  Mr. Speaker, I reserve the balance of my time.

         House of Representatives, Committee on Oversight and 
           Government Reform
                                    Washington, DC, June 26, 2018.
     Hon. Edward R. Royce,
     Chairman, Committee on Foreign Affairs,
     House of Representatives, Washington, DC.
       Dear Mr. Chairman: I write concerning H.R. 5841, the 
     Foreign Investment Risk Review Modernization Act of 2018. 
     This bill contains provisions within the jurisdiction of the 
     Committee on Oversight and Government Reform. As a result of 
     your having consulted with me concerning the provisions of 
     the bill that fall within our Rule X jurisdiction, I agree to 
     forgo consideration of the bill, so the bill may proceed 
     expeditiously to the House floor.
       The Committee takes this action with our mutual 
     understanding that by foregoing consideration of H.R. 5841 we 
     do not waive any jurisdiction over the subject matter 
     contained in this or similar legislation, and we will be 
     appropriately consulted and involved as the bill or similar 
     legislation moves forward so we may address any remaining 
     issues within our Rule X jurisdiction. Further, I request 
     your support for the appointment of conferees from the 
     Committee on Oversight and Government Reform during any 
     House-Senate conference on this or related legislation.
       Finally, I would appreciate a response confirming this 
     understanding and ask that a copy of our exchange of letters 
     on this matter be included in the bill report filed by the 
     Committee on Armed Services, as well as in the Congressional 
     Record during floor consideration thereof.
           Sincerely,
     Trey Gowdy.
                                  ____

                                         House of Representatives,


                                 Committee on Foreign Affairs,

                                    Washington, DC, June 26, 2018.
     Hon. Trey Gowdy,
     Chairman, Committee on Oversight and Government Reform, 
         Washington, DC.
       Dear Chairman Gowdy: Thank you for consulting with the 
     Foreign Affairs Committee and agreeing to be discharged from 
     further consideration of H.R. 5841, the Foreign Investment 
     Risk Review Modernization Act of 2018, so that the bill may 
     proceed expeditiously to the House floor.
       I agree that your forgoing further action on this measure 
     does not in any way diminish or alter the jurisdiction of 
     your committee, or prejudice its jurisdictional prerogatives 
     on this resolution or similar legislation in the future. I 
     would support your effort to seek appointment of an 
     appropriate number of conferees from your committee to any 
     House-Senate conference on this legislation.
       I will seek to place our letters on this bill into the 
     Congressional Record during floor consideration of the bill. 
     I appreciate your cooperation regarding this legislation and 
     look forward to continuing to work together as this measure 
     moves through the legislative process.
           Sincerely,
                                                  Edward R. Royce,
     Chairman.
                                  ____

         House of Representatives, Permanent Select Committee on 
           Intelligence,
                                    Washington, DC, June 26, 2018.
     Hon. Ed Royce,
     Chairman, Committee on Foreign Affairs,
     House of Representatives, Washington, DC.
       Dear Mr. Chairman: On May 16, 2018, H.R. 5841, the 
     ``Foreign Investment Risk Review and Modernization Act of 
     2018'' was additionally referred to the Permanent Select 
     Committee on Intelligence.
       In order to expedite the House's consideration of the 
     measure, the Permanent Select Committee on Intelligence will 
     forgo consideration of the measure. This courtesy is 
     conditioned on our mutual understanding and agreement that it 
     will in no way diminish or alter the jurisdiction of the 
     Permanent Select Committee on Intelligence with respect to 
     any future jurisdictional claim over the subject matter 
     contained in the legislation or any similar measure, nor will 
     this waiver inhibit the Permanent Select Committee on 
     Intelligence's to address issues of concern going forward. I 
     appreciate your support to the appointment of Members from 
     the Permanent Select Committee on Intelligence to any House-
     Senate conference on this legislation.
       I would appreciate you including our exchange of letters in 
     the Congressional Record during floor consideration of H.R. 
     5841. Thank you for the cooperative spirit in which you have 
     worked regarding this and other matters between our 
     respective committees.
           Sincerely,
                                                      Devin Nunes,
                                                         Chairman.

[[Page H5692]]

     
                                  ____
                                         House of Representatives,


                                 Committee on Foreign Affairs,

                                    Washington, DC, June 26, 2018.
     Hon. Devin Nunes,
     Chairman, Permanent Select Committee on Intelligence, 
         Washington, DC.
       Dear Chairman Nunes: Thank you for consulting with the 
     Foreign Affairs Committee and agreeing to be discharged from 
     further consideration of H.R. 5841, the Foreign Investment 
     Risk Review Modernization Act of 2018, so that the bill may 
     proceed expeditiously to the House floor.
       I agree that your forgoing further action on this measure 
     does not in any way diminish or alter the jurisdiction of 
     your committee, or prejudice its jurisdictional prerogatives 
     on this resolution or similar legislation in the future. I 
     would support your effort to seek appointment of an 
     appropriate number of conferees from your committee to any 
     House-Senate conference on this legislation.
       I will seek to place our letters on this bill into the 
     Congressional Record during floor consideration of the bill. 
     I appreciate your cooperation regarding this legislation and 
     look forward to continuing to work together as this measure 
     moves through the legislative process.
           Sincerely,
                                                  Edward R. Royce,
     Chairman.
                                  ____

         House of Representatives, Committee on Energy and 
           Commerce,
                                    Washington, DC, June 26, 2018.
     Hon. Edward R. Royce,
     Chairman, Committee on Foreign Affairs,
     Washington, DC.
       Dear Chairman Royce: I write in regard to H.R. 5841, 
     Foreign Investment Risk Review Modernization Act of 2018, 
     which was referred in addition to the Committee on Energy and 
     Commerce. I wanted to notify you that the Committee will 
     forgo action on the bill so that it may proceed expeditiously 
     to the House floor for consideration.
       The Committee on Energy and Commerce takes this action with 
     our mutual understanding that by foregoing consideration of 
     H.R. 5841, the Committee does not waive any jurisdiction over 
     the subject matter contained in this or similar legislation 
     and will be appropriately consulted and involved as this or 
     similar legislation moves forward to address any remaining 
     issues within the Committee's jurisdiction. The Committee 
     also reserves the right to seek appointment of conferees to 
     any House-Senate conference involving this or similar 
     legislation and asks that you support any such request.
       I would appreciate your response confirming this 
     understanding with respect to H.R. 5841 and ask that a copy 
     of our exchange of letters on this matter be included in the 
     Congressional Record during its consideration on the House 
     floor.
           Sincerely,
                                                      Greg Walden,
     Chairman.
                                  ____

                                         House of Representatives,


                                 Committee on Foreign Affairs,

                                    Washington, DC, June 26, 2018.
     Hon. Greg Walden,
     Chairman, Committee on Energy and Commerce,
     Washington, DC.
       Dear Chairman Walden: Thank you for consulting with the 
     Foreign Affairs Committee and agreeing to be discharged from 
     further consideration of H.R. 5841, the Foreign Investment 
     Risk Review Modernization Act of 2018, so that the bill may 
     proceed expeditiously to the House floor.
       I agree that your forgoing further action on this measure 
     does not in any way diminish or alter the jurisdiction of 
     your committee, or prejudice its jurisdictional prerogatives 
     on this resolution or similar legislation in the future. I 
     would support your effort to seek appointment of an 
     appropriate number of conferees from your committee to any 
     House-Senate conference on this legislation.
       I will seek to place our letters on this bill into the 
     Congressional Record during floor consideration of the bill. 
     I appreciate your cooperation regarding this legislation and 
     look forward to continuing to work together as this measure 
     moves through the legislative process.
           Sincerely,
                                                  Edward R. Royce,
                                                         Chairman.

  Mr. SHERMAN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in strong support of H.R. 5861 and I want to 
associate myself with the remarks of Chairman Royce of the Foreign 
Affairs Committee.
  This bill deals with two very related issues. One is investment in 
the United States when that could indeed undermine our national 
security. So this bill would reform the CFIUS process, the process by 
which we review taking control of a business enterprise in the United 
States that may have strategic implications. That part of the bill is 
the product of the Financial Services Committee.
  The second part of the bill reauthorizes and reforms our long-lapsed 
export control statute.
  I would like to commend Representatives Heck, Pittenger, and Barr for 
their work on the first part of this bill, and commend Chairman Royce 
and Ranking Member Engel for their leadership on the reform and 
recodification of the Export Control Reform Act.
  This is a bill that deals with our national security as it may relate 
to business; first focusing on investments, then focusing on the sale 
of products abroad.
  I have served on the two committees of jurisdiction for over 20 
years, and have been working on this issue for all of that time.
  First, as to the investment or CFIUS portion of the bill, I serve as 
ranking member of the Asia and the Pacific Subcommittee and know 
firsthand that Chinese companies are not always driven just by their 
own company profits. But instead, they are looking at a bigger picture, 
working with Beijing to advance China's global interests. And all too 
often, these interests undermine American national security.
  Foreign investment in the United States often benefits us. We should 
encourage and welcome foreign investments that create jobs for American 
workers. But when a firm absorbs innovative American technology and an 
innovative American company and then transfers the know-how and the 
jobs, often to China, we may have a problem.
  I am pleased to indicate that the CFIUS portion of this bill has 
three of my amendments, which are designed to recognize that national 
security is not just a matter of missiles and warships, but also 
maintaining our strategic technological edge.
  The first of my amendments requires that CFIUS focus on the national 
security risks of offshoring American jobs. Because when you hollow out 
the American workforce, when you create a circumstance where Americans 
no longer have those technical skills, then you undermine our ability 
to provide for our own national defense.
  The second deals with the risk of censorship that arises when foreign 
companies acquire our companies engaged in entertainment and 
information, and requires CFIUS to report to Congress on this issue of 
controlling our entertainment and information industries.
  We learned in the 2016 election that hostile foreign countries 
attempt to influence the American public, so we should study the 
potential for foreign ownership of media in the United States to 
influence our political discourse and ultimately our elections and 
government power.
  I would point out that if you control broadcasting, if you control 
movie screens, if you control mechanisms of distribution, you control 
what movies and TV shows will be made, and we should not put any 
hostile foreign power in a position to dictate that we never make 
another movie about Tibet.
  We never want to put ourselves in a position where China controls 
what we see on our screens, in our entertainment, in our newspapers.
  I would point out that China already has control over films being 
distributed in China. They unjustly limit that through a protectionist 
quota system and use that to try to force American studios to make 
movies that are consistent with the objectives of the Chinese 
Government.
  My third amendment focuses on the Made in China 2025 program by 
acknowledging that supposedly independent Chinese companies are, in 
fact, required to work with their own government.
  Simply put, if you are based in Shanghai, you are going to listen to 
Beijing, and when the CFIUS process provides heightened scrutiny for 
government-controlled investment, that should apply to any company in a 
managed economy that is, in effect, under government supervision and 
control.
  Mr. Speaker, I now move on to the export control portion of this 
bill, the portion that limits what technology we can sell abroad.
  This act has not been amended since 1990. It expired in 2001. It has 
been held together through a series of temporary executive orders.
  This bill provides for export controls that support U.S. foreign 
policy goals such as complementing economic sanctions, combating 
terrorism, and prohibiting the export of items that will be used in 
human rights violations.

[[Page H5693]]

  I offered, and I am pleased that the committee accepted, one of my 
amendments that would require the Department of Commerce to look at the 
significantly negative impacts of controlled exports on our defense 
industrial base.
  When we allow the tools, the dies, the materials for manufacturing to 
be exported, we, therefore, lose the workforce, lose the capacity, and 
lose the ability to provide for our own defense.
  Mr. Speaker, I urge the support of this important legislation which 
modernizes CFIUS and our export control laws.
  Mr. Speaker, seeing no other speakers on our side from the Foreign 
Affairs Committee, I would urge my colleagues to vote for this bill.
  Mr. Speaker, I yield the balance of my time to the gentlewoman from 
California (Ms. Maxine Waters), the ranking member of the Financial 
Services Committee, and I ask unanimous consent that she be allowed to 
control that time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance 
of my time.
  Mr. HENSARLING. Mr. Speaker, I yield myself 4 minutes.
  Mr. Speaker, I rise in strong support of H.R. 5841, the Foreign 
Investment Risk Review Modernization Act, which the Financial Services 
Committee approved last month by a unanimous vote of 53-0.
  I want to thank both Republican and Democrat Members for their 
effort, but I especially want to thank the bill's sponsor, the 
gentleman from North Carolina (Mr. Pittenger), who has worked 
tirelessly to develop this legislation and bring it to the House floor. 
Mr. Speaker, we would not be here but for his expertise and leadership.
  I also want to thank Chairman Royce for the cooperation of the 
Foreign Affairs Committee working with us on this very important piece 
of legislation.
  Finally, I want to thank the gentleman from Kentucky (Mr. Barr), who 
chairs our Monetary Policy and Trade Subcommittee, as well as his 
ranking member, Ms. Moore of Wisconsin.
  I also happen to see the gentleman from Washington, Mr. Heck, and I 
want to thank him for his contributions as well.
  The subcommittee held no fewer than four hearings prior to marking up 
this legislation, and the thoughtfulness that they brought to the issue 
is something we should all emulate.
  The bill is a comprehensive reform of the Committee on Foreign 
Investment in the United States, or CFIUS, as it is known; the first 
update of its kind in over a decade.
  CFIUS is authorized to review foreign investment transactions that 
may threaten our national security. And although these authorities have 
been wielded carefully, Congress must remain vigilant when delegating 
additional powers that may have far-reaching effects.
  The reason, Mr. Speaker, is simple. According to a Department of 
Commerce study from 2016, 12 million American workers have jobs 
resulting from foreign investment; 3\1/2\ million in the manufacturing 
sector alone.
  On top of that, the vast majority of foreign investments' value added 
comes from deals with U.S. allies. We need to protect our national 
security while also ensuring that America stays open for business.
  This is exactly what the House version of FIRRMA does. It closes real 
gaps in CFIUS' jurisdiction that could otherwise be exploited by bad 
actors, but it doesn't give the government a foothold to go after deals 
or entire sectors on a whim.
  We target those transactions in countries, including China and 
Russia, that truly present a national security risk, but without 
strangling the investment and innovation that makes our country strong 
to begin with.
  We also focus on particular assets that are sensitive, assets like 
sensitive personal data of U.S. citizens or technical information on 
critical technologies and critical infrastructure rather than walling 
off entire categories of U.S. companies and industries.

                              {time}  1400

  It is also important to know what that bill doesn't do, Mr. Speaker. 
We don't change due process under CFIUS, and we don't weaken 
confidentiality requirements that CFIUS is subject to. H.R. 5841 keeps 
CFIUS accountable.
  Finally, this legislation recognizes that CFIUS and export controls 
are complementary. As two sides of the same coin, reforms to both 
clearly belong in the same bill.
  We are pleased to see this legislation include such reforms to the 
export control regime, again, reforms that passed the Foreign Affairs 
Committee by voice vote in April. They make the House version of FIRRMA 
even stronger.
  Again, Mr. Speaker, I wish to thank Members on both sides of the 
aisle, especially Mr. Pittenger, but all Members on both sides of the 
aisle who contributed so thoughtfully to this legislation, including 
the cooperation of the ranking member.
  I urge all of my colleagues to support it, and I reserve the balance 
of my time.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker, I rise in support of H.R. 5841, the Foreign Investment 
Risk Review Modernization Act of 2018. This bill represents a 
bipartisan effort to bring much-needed reform to the Committee on 
Foreign Investment in the United States, or CFIUS, which serves an 
important function in the national security area.
  I would like to thank Chairman Hensarling, Chairman Barr, Ranking 
Member Moore, Congressman Pittenger, Congresswoman Maloney, and also 
Congressman Heck, who is here today, in particular.
  Congressman Heck has, for the good part of a year, been working very 
hard to ensure that any legislation addresses key jurisdictional gaps 
in the current scope of CFIUS authority, and this bill does just that. 
I thank him for his leadership.
  It is Congress' responsibility to ensure that CFIUS appropriately 
balances the benefits of our traditionally open investment climate with 
the need to protect our national security. And make no mistake, the 
national security threats we face today in this area are both serious 
and evolving. The world has become a much more complicated place since 
Congress last reviewed and reformed the CFIUS process a decade ago. The 
bill brings CFIUS into the 21st century.
  H.R. 5841 would expand the jurisdiction of CFIUS with regard to 
certain types of transactions that have previously avoided scrutiny, 
and it reforms the national security reviews performed by CFIUS to 
address growing concerns that foreign entities may be using 
acquisitions of and partnerships with U.S. businesses to chip away at 
American technological leadership.
  The primary concern here is that China's aggressive industrial policy 
and their efforts to invest in early stage, cutting-edge U.S. 
technologies with potential military applications, including artificial 
intelligence and robotics, in part to advance China's military 
modernization, will diminish America's technological advantage.
  During the course of our deliberations on this legislation, despite 
some honest intellectual disagreements as to how best to counter this 
threat, at the end of the day, we understood that we have a 
responsibility to address these problems in the most effective and 
efficient way possible, in ways that do not undermine other important 
functions of government, many of which also contribute to our national 
security.
  Importantly, this legislation also recognizes that, as the volume of 
cases and the complexity of transactions continue to increase, 
expanding the scope of CFIUS without additional resources would not 
only undermine CFIUS' mission, but it would also deplete other 
important government services and functions, both domestically and 
internationally.
  So I am very glad that this legislation authorizes $20 million 
annually for the next 5 years to fund CFIUS' operation, as well as 
provide the authority for Treasury to impose a filing fee on the 
companies that file with CFIUS based on the value of the transaction, 
taking into account a number of other factors, including the effect of 
any given fee on small-business concerns.

[[Page H5694]]

  The bill does not address everyone's concerns yet, including concerns 
by some entertainment industry stakeholders, which I share. As we move 
forward, I will continue to support ongoing refinements to the 
legislation.
  H.R. 5841 deserves strong support in the House, and I urge my 
colleagues to vote ``yes.''
  I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I am pleased to yield 3 minutes the 
gentleman from North Carolina (Mr. Pittenger), the vice chairman of the 
Terrorism and Illicit Finance Subcommittee and the author of the FIRRMA 
bill before us.
  Mr. PITTENGER. Mr. Speaker, I would like to thank the chairman for 
his leadership on this very important legislation, H.R. 5841, FIRRMA.
  I would also like to thank Chairman Royce, Congressman Barr, and 
Congressman Heck for the significant leadership role that they played 
with this bill, as well as my chief of staff, Clark Fonda, and 
Assistant Secretary of Treasury Heath Tarbert. They have put in 
countless hours, working through details and language on this bill.
  Mr. Speaker, I have worked on CFIUS-related issues for nearly 3 
years. Prior to FIRRMA, I spent my efforts identifying problematic 
transactions and engaging in a public media campaign to raise awareness 
and stoke government action. Three years later, I am so happy to the 
say that we have had a robust impact on this issue.
  For example, we helped prevent the Chicago Stock Exchange from 
falling into the hands of opaque Chinese ownership. We protected our 
defense supply chain by helping stop Lattice Semiconductor from being 
purchased by a Chinese state-owned investment fund. We helped prevent 
the Chinese from exploiting important personal data during an attempt 
to purchase MoneyGram.
  Our successful initiatives have garnered the attention of Senator 
Cornyn. We began a yearlong process to draft the original version of 
FIRRMA.
  Over the past year, my staff and I have seen dozens of versions of 
FIRRMA, both introduced versions and redline edits, from various 
offices and stakeholders. For months, we have fought for the strongest 
CFIUS reform bill possible.
  Today, we reach a milestone where floor action is imminent, which is 
a huge step forward for the cause of CFIUS reform. The version we are 
considering today, of which I am the sponsor, includes a number of 
reforms to strengthen the current system and prevent the flow of 
military-applicable technologies to the Chinese Government, in 
particular.
  The bill creates a process by which countries of special concern, 
which would include China, would have increased oversight when 
attempting to purchase critical technology companies in the United 
States.
  The bill also helps create an interagency process through export 
controls to review overseas joint ventures, a process that is absent 
under our current system.
  While I am pleased that we have gotten to this point in the 
legislative process, both the House and Senate versions are departures 
from the original FIRRMA concept. However, both would improve 
significantly the CFIUS and export control processes, as well as have a 
strong impact on governing Chinese and other adversarial investments.
  Regardless of what actions are taken next to reconcile the 
differences with the language of the Senate version, passed as part of 
their NDAA, there are certain principles that should be addressed in 
the final version.
  History will record whether we have done our job to prevent the 
transfer of proprietary intellectual property and critical technologies 
to adversarial governments.
  The SPEAKER pro tempore (Mr. Poe of Texas). The time of the gentleman 
has expired.
  Mr. HENSARLING. Mr. Speaker, I yield an additional 15 seconds to the 
gentleman from North Carolina.
  Mr. PITTENGER. Mr. Speaker, to this end, I am encouraged by the 
progress we have made on this issue, and I am grateful for the 
opportunity to help move forward important legislation to reform CFIUS 
and export controls.
  Ms. MAXINE WATERS of California. Mr. Speaker, it is my pleasure to 
yield 2 minutes to the gentleman from Washington (Mr. Heck), a member 
of the Financial Services Committee who has fought tirelessly on CFIUS 
reform and has been engaged in this process from the beginning, for the 
purposes of a colloquy.
  Mr. HECK. Mr. Speaker, I thank the ranking member. I do indeed rise 
to engage in a colloquy with the gentleman from Kentucky.
  The bill we are considering today, unlike the Senate CFIUS bill, does 
not have specific language dealing with board seats. That 
notwithstanding, Chairman Barr and I share an understanding that the 
language of the bill that covers ``involvement, other than through 
voting shares, in the substantive decision-making of the United States 
business'' gives CFIUS jurisdiction over investments which would confer 
membership or observer rights or the right to nominate someone from the 
board of directors or equivalent governing body of a business.
  I ask my friend to confirm that understanding.
  Mr. BARR. Will the gentleman yield?
  Mr. HECK. I yield to the gentleman from Kentucky.
  Mr. BARR. Mr. Speaker, I thank the gentleman for yielding, and I 
especially thank the gentleman for his cooperative, constructive, and 
bipartisan approach to the legislation, and improving the legislation.
  We are in agreement on this point, that such involvement could cover 
activity, including membership on the board of directors and observer 
rights. In addition, the gentleman makes note of board nominations. As 
we have seen under current law, CFIUS looks at nominations and the 
risks that may arise from them. The Broadcom deal was a case in point. 
However, the language in this bill makes this jurisdiction clearer.
  The gentleman is right to focus on risks that a board member may pose 
who is acting on behalf of a foreign investor who nominates the member. 
The whole point of such nominations could be to involve the foreign 
investor in substantive decision-making in a way that results in 
national security risks.
  H.R. 5841 could cover such a scenario. I thank the gentleman for 
yielding.
  Mr. HECK. Mr. Speaker, I thank the gentleman for this exchange.
  Mr. HENSARLING. Mr. Speaker, how much time do I have remaining?
  The SPEAKER pro tempore. The gentleman from Texas has 2\3/4\ minutes 
remaining.
  Mr. HENSARLING. Mr. Speaker, I yield the balance of my time to the 
gentleman from Kentucky (Mr. Barr), the chairman of the Monetary Policy 
and Trade Subcommittee, and the subcommittee chairman who helped craft 
the bill and helped shepherd it to the markup process.
  Mr. BARR. Mr. Speaker, I rise today in support of the Foreign 
Investment Risk Review Modernization Act.
  I want to thank the House authors of this bill, particularly the 
gentleman from North Carolina (Mr. Pittenger), for his outstanding 
leadership on this effort; and my friend, the gentleman from Washington 
(Mr. Heck); also the Senate authors, Senator Cornyn and Senator 
Feinstein; and House Chairman Hensarling, Chairman Royce, Chairman 
Nunes, Chairman Thornberry, and Chairman Walden; as well as House 
leadership for their efforts in bringing this nonpartisan legislation 
to the floor.
  Just by that list, you understand how complex this issue is because 
it involves not only a multiagency effort of this government, it 
requires the concerted and cooperative efforts of many committees in 
this House and in Congress generally because of the shared 
jurisdiction.
  In 2016, new foreign direct investment added $894 billion in value to 
the U.S. economy. Today, 6.8 million American workers are employed by 
international companies, including 20 percent of U.S. manufacturing 
workers.
  In my own district in Kentucky, Toyota Motor Manufacturing, Kentucky, 
Inc. supports 8,500 jobs as a result of benign foreign direct 
investment, a great example of this. These are typically higher paying 
jobs. So it is critical that we preserve in the United States an open 
investment climate, to the extent possible, consistent with national 
security objectives.
  But a comprehensive update to both the export control regime and the 
Committee on Foreign Investment in the

[[Page H5695]]

United States, or CFIUS as is it commonly called, is needed due to the 
massive surge in malign investments by the Chinese and other bad actors 
in U.S. assets.
  This legislation closes loopholes in CFIUS' jurisdiction and 
modernizes our process for identifying critical technologies without 
duplicating agency efforts like earlier drafts of this legislation 
called for, all the while ensuring these transactions are thoroughly 
vetted in a timely manner so that America continues to attract much-
needed foreign investment that does not implicate national security.
  This legislation also authorizes CFIUS to review sensitive, 
noncontrolling investments in critical technology or infrastructure 
made by persons affiliated with countries of special concern or 
threatening actors.
  These changes improve upon previous versions of the bill that failed 
to focus CFIUS' limited resources on the most serious threats and bad 
actors, including China.
  Importantly, this legislation grants CFIUS the authority to review 
the acquisition of real estate near U.S. military installations and 
other important national security assets. The legislation uses a new 
and strengthened interagency export control process to review joint 
ventures and outbound activities. I want to thank Chairman Royce for 
his leadership on that point.
  These reforms strike the right balance between bolstering national 
security and ensuring strong economic growth. I encourage my colleagues 
to support the legislation.

                              {time}  1415

  Ms. MAXINE WATERS of California. Mr. Speaker, I yield 3 minutes to 
the gentleman from Washington (Mr. Heck).
  Mr. HECK. Mr. Speaker, I thank the ranking member for yielding.
  Mr. Speaker, I rise in support of this legislation which is urgently 
needed. Our adversaries and competitors are indeed actively exploiting 
gaps in our existing CFIUS process, which I would argue has not been 
materially modernized in 30 years, and there are gaps.
  Right now, purchases of land near our most sensitive national 
security installations which are purchased to facilitate espionage go 
unreviewed unless there happens to be an existing business on that 
site.
  Investments that could give our strategic competitors influence and 
insights into our critical technology or the critical infrastructure 
our country relies on go unreviewed because they fall just short of 
control of a company.
  Rights changes that can confer control of a company even without new 
equity being contributed are not clearly within CFIUS jurisdiction.
  There is a gap between CFIUS' existing authority over joint ventures 
involving a whole U.S. business and the export control system's 
authority over individual pieces of technology and know-how.
  Good news. We close these gaps in this bill.
  I appreciate deeply the willingness of Chairmen Hensarling and Barr 
to work to ensure this legislation effectively addresses investments 
that could expose details of critical technology or critical 
infrastructure to our strategic competitors and to incorporate other 
improvements suggested by our national security committees.
  Frankly, however, as is no secret, I think there are some other 
changes that I would like to have had made. For example, the Senate and 
the original House bill contained delegation authority to help manage 
an increased workload and more senior officials to oversee the CFIUS 
process.
  I also continue to believe that the blacklist used in the House bill 
will ultimately be too easy for our adversaries to evade. Compared to 
the approach taken by the Senate bill and the original House 
legislation, the blacklist is also kind of a missed opportunity, I 
think, to encourage our allies and partners to establish their own 
CFIUS-like mechanisms compatible with ours because the truth is, we are 
no safer if we block our competitors from buying a capability here but 
they buy it from one of our allies or partners. That all said, this is 
a very important step forward.
  Mr. Speaker, I am glad to stand before you today and urge your 
support on what I believe is a critical issue of national security. I 
am equally glad to express my deep appreciation to the ranking member 
and to the chairmen, both Mr. Hensarling and Mr. Barr, and to my 
friend,  Robert Pittenger.
  Last statement of the obvious warning, none of us is any better than 
the quality of our staff. I want to acknowledge that I have been very 
ably assisted on this matter for the better part of a year by Erik 
Ashida of my staff. He has been with me 6 years.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield such time as he 
may consume to the gentleman from Washington (Mr. Heck).
  Mr. HECK. Mr. Speaker, he is leaving staff because he has been 
admitted to the extremely prestigious SAIS program, School of Advanced 
International Studies at Johns Hopkins University. I know each of us 
has experiences who have been here any length of time, when you have 
had a young person be with you for many, many years, it creates a sense 
of loss when they finally decide to take that next step. I am only able 
to do this because I know that as ably as he has served the people of 
the 10th Congressional District in our State from which he is from, I 
know with equal confidence that he will continue to serve America upon 
completion of his graduate program. He has been the point person in my 
office working with Members' offices, and I am deeply appreciative to 
him for all of his service.
  Mr. Speaker, I urge the Members of this House to endorse and to 
support this very important national security measure.
  Mr. ROYCE of California. Mr. Speaker, I yield 3 minutes to the 
gentleman from Texas, and I ask unanimous consent that he may control 
that time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. HENSARLING. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman 
from Ohio (Mr. Davidson), who is a hardworking member of the Financial 
Services Committee and a member of the Monetary Policy and Trade 
Subcommittee that dealt with this FIRRMA legislation.
  Mr. DAVIDSON. Mr. Speaker, I want to thank my colleagues for working 
together on this bipartisan legislation, H.R. 4311, the Foreign 
Investment Risk Review Modernization Act. It addresses the intersection 
of national security, intellectual property, and property rights.
  We have a responsibility to protect the people of the United States 
of America from threats abroad, and we also have a responsibility to 
protect the system that has truly made the United States the world's 
land of opportunity. We have had free flow of goods, services, capital, 
ideas, and, indeed, people because we have a high functioning rule of 
law here in America.
  How can the entrepreneur living the American Dream truly thrive in 
the spirit of enterprise when competing against a foreign state? But 
that is the very state that he is up against a lot of times in trade as 
an entrepreneur seeks to grow a corporation backed by a foreign 
government.
  This legislation addresses many of these types of concerns--countries 
acting as companies that pose threats to our national security--and 
this legislation has been done in a bipartisan, constructive manner, 
and I appreciate the input and efforts from Members of both sides of 
the aisle as well as those in the administration and the private sector 
who have helped make this meaningful legislation what it is today.

  Mr. HENSARLING. Mr. Speaker, I yield 30 seconds to the gentleman from 
Kentucky (Mr. Barr), who is the chairman of our Monetary Policy and 
Trade Subcommittee.
  Mr. BARR. Mr. Speaker, this effort has been a success because we are 
balancing the imperatives of national security with maintaining an 
important open investment climate in the United States. Why that 
balance is so important is because preserving benign foreign direct 
investment and capital so that research and development in the United 
States can flourish is important not only to preserve our competitive 
edge in the global economy, it is important for national security.
  Our economic strength contributes to our national security. We are 
striking

[[Page H5696]]

the right balance with this new FIRRMA legislation.
  Mr. HENSARLING. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, again, I think this is a very important piece of 
legislation that has come before the body. I also want to acknowledge 
that, yes, it is very challenging for this body to engage in bipartisan 
legislation. But we have clearly achieved it today. I think we have 
achieved it because we know that as Americans we must rally around when 
it comes to issues of national security.
  So, again, I want to thank the ranking member. I want to thank the 
gentleman from Washington and all other Members on the other side of 
the aisle for coming together. And as the gentleman from Washington 
said, perhaps not getting exactly the bill that they wanted--I assure 
the gentleman from Washington I didn't get exactly the bill I wanted--
but we have a very strong bill that I think balances our critical need 
to safeguard our technology and at the same time recognizes how 
important foreign direct investment is in growing our economy and being 
able to afford the type of defense structures that we need so that our 
national security is never second to none.
  Again, Mr. Speaker, we could not have done this first without the 
leadership, the expertise, and the drive of the gentleman from North 
Carolina. I believe that some form of this bill will soon end up on the 
President's desk and we will all thank the gentleman from North 
Carolina for his leadership in getting America to this point.
  Mr. Speaker, I urge all Members to vote for this legislation, and I 
yield back the balance of my time.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself the 
balance of my time.
  Mr. Speaker, I think that all of our speakers have been eloquent in 
the way that they have described the work that was done on the bill. I 
am very pleased and proud that on this issue of national security that 
we were able to come together. I think that what we have done is 
certainly in the best interests of our country.
  As the chairman said, some did not get everything that they would 
like to have in the bill, but we were able to work through the various 
concerns, I think, in a very honest and open way.
  Mr. Speaker, I urge all of my colleagues to vote ``aye'' on this 
bill, and I yield back the balance of my time.
  Mr. ROYCE of California. Mr. Speaker, I yield myself the balance of 
my time.
  Mr. Speaker, in closing, I would like to thank several of my 
colleagues, the ranking member of the Foreign Affairs Committee, Mr. 
Engel, as well as, of course, Chairman Hensarling, Ranking Member 
Waters, and Mr. Pittenger.
  I want to thank them for incorporating as title VIII the text that I 
authored as H.R. 5040, this is the Export Control Reform Act of 2018. 
This is the measure we put out of the Foreign Affairs Committee.
  This title modernizes and reforms outdated export controls designed 
to impose trade controls on the old Soviet bloc. It was long past due 
that we update these controls to reflect the realities of modern 
international commerce and the national security threats of the century 
we are in right now.
  I would urge my colleagues to join us in modernizing both the CFIUS 
and export controls process which we do now in this combined bill. A 
``yes'' vote will ensure continued U.S. leadership in high technology 
industries essential to the health of our economy and essential to our 
national security.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from California (Mr. Royce) that the House suspend the rules 
and pass the bill, H.R. 5841, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. HENSARLING. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

                          ____________________