[Congressional Record Volume 166, Number 121 (Wednesday, July 1, 2020)]
[House]
[Pages H3039-H3044]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         HONG KONG AUTONOMY ACT

  Mr. SHERMAN. Madam Speaker, I ask unanimous consent that the 
Committee on Foreign Affairs, the Committee on Financial Services, the 
Committee on the Judiciary, the Committee on Ways and Means, and the 
Committee on Rules be discharged from further consideration of the bill 
(H.R. 7440) to impose sanctions with respect to foreign persons 
involved in the erosion of certain obligations of China with respect to 
Hong Kong, and for other purposes, and I ask for its immediate 
consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore (Ms. Finkenauer). Is there objection to the 
request of the gentleman from California?
  There was no objection.
  The text of the bill is as follows:

                               H.R. 7440

       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 ``Hong Kong 
     Autonomy Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Findings.

[[Page H3040]]

Sec. 4. Sense of Congress regarding Hong Kong.
Sec. 5. Identification of foreign persons involved in the erosion of 
              the obligations of China under the Joint Declaration or 
              the Basic Law and foreign financial institutions that 
              conduct significant transactions with those persons.
Sec. 6. Sanctions with respect to foreign persons that contravene the 
              obligations of China under the Joint Declaration or the 
              Basic Law.
Sec. 7. Sanctions with respect to foreign financial institutions that 
              conduct significant transactions with foreign persons 
              that contravene the obligations of China under the Joint 
              Declaration or the Basic Law.
Sec. 8. Waiver, termination, exceptions, and congressional review 
              process.
Sec. 9. Implementation; penalties.
Sec. 10. Rule of construction.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Alien; national; national of the united states.--The 
     terms ``alien'', ``national'', and ``national of the United 
     States'' have the meanings given those terms in section 101 
     of the Immigration and Nationality Act (8 U.S.C. 1101).
       (2) Appropriate congressional committees and leadership.--
     The term ``appropriate congressional committees and 
     leadership'' means--
       (A) the Committee on Armed Services, the Committee on 
     Banking, Housing, and Urban Affairs, the Committee on Foreign 
     Relations, the Committee on Homeland Security and 
     Governmental Affairs, the Committee on the Judiciary, the 
     Select Committee on Intelligence, and the majority leader and 
     the minority leader of the Senate; and
       (B) the Committee on Armed Services, the Committee on 
     Financial Services, the Committee on Foreign Affairs, the 
     Committee on Homeland Security, the Committee on the 
     Judiciary, the Permanent Select Committee on Intelligence, 
     and the Speaker and the minority leader of the House of 
     Representatives.
       (3) Basic law.--The term ``Basic Law'' means the Basic Law 
     of the Hong Kong Special Administrative Region of the 
     People's Republic of China.
       (4) China.--The term ``China'' means the People's Republic 
     of China.
       (5) Entity.--The term ``entity'' means a partnership, joint 
     venture, association, corporation, organization, network, 
     group, or subgroup, or any other form of business 
     collaboration.
       (6) Financial institution.--The term ``financial 
     institution'' means a financial institution specified in 
     section 5312(a)(2) of title 31, United States Code.
       (7) Hong kong.--The term ``Hong Kong'' means the Hong Kong 
     Special Administrative Region of the People's Republic of 
     China.
       (8) Joint declaration.--The term ``Joint Declaration'' 
     means the Joint Declaration of the Government of the United 
     Kingdom of Great Britain and Northern Ireland and the 
     Government of the People's Republic of China on the Question 
     of Hong Kong, done at Beijing on December 19, 1984.
       (9) Knowingly.--The term ``knowingly'', with respect to 
     conduct, a circumstance, or a result, means that a person has 
     actual knowledge of the conduct, the circumstance, or the 
     result.
       (10) Person.--The term ``person'' means an individual or 
     entity.
       (11) United states person.--The term ``United States 
     person'' means--
       (A) any citizen or national of the United States;
       (B) any alien lawfully admitted for permanent residence in 
     the United States;
       (C) any entity organized under the laws of the United 
     States or any jurisdiction within the United States 
     (including a foreign branch of such an entity); or
       (D) any person located in the United States.

     SEC. 3. FINDINGS.

       Congress makes the following findings:
       (1) The Joint Declaration and the Basic Law clarify certain 
     obligations and promises that the Government of China has 
     made with respect to the future of Hong Kong.
       (2) The obligations of the Government of China under the 
     Joint Declaration were codified in a legally-binding treaty, 
     signed by the Government of the United Kingdom of Great 
     Britain and Northern Ireland and registered with the United 
     Nations.
       (3) The obligations of the Government of China under the 
     Basic Law originate from the Joint Declaration, were passed 
     into the domestic law of China by the National People's 
     Congress, and are widely considered by citizens of Hong Kong 
     as part of the de facto legal constitution of Hong Kong.
       (4) Foremost among the obligations of the Government of 
     China to Hong Kong is the promise that, pursuant to Paragraph 
     3b of the Joint Declaration, ``the Hong Kong Special 
     Administrative Region will enjoy a high degree of autonomy, 
     except in foreign and defence affairs which are the 
     responsibilities of the Central People's Government''.
       (5) The obligation specified in Paragraph 3b of the Joint 
     Declaration is referenced, reinforced, and extrapolated on in 
     several portions of the Basic Law, including Articles 2, 12, 
     13, 14, and 22.
       (6) Article 22 of the Basic Law establishes that ``No 
     department of the Central People's Government and no 
     province, autonomous region, or municipality directly under 
     the Central Government may interfere in the affairs which the 
     Hong Kong Special Administrative Region administers on its 
     own in accordance with this Law.''.
       (7) The Joint Declaration and the Basic Law make clear that 
     additional obligations shall be undertaken by China to ensure 
     the ``high degree of autonomy'' of Hong Kong.
       (8) Paragraph 3c of the Joint Declaration states, as 
     reinforced by Articles 2, 16, 17, 18, 19, and 22 of the Basic 
     Law, that Hong Kong ``will be vested with executive, 
     legislative and independent judicial power, including that of 
     final adjudication''.
       (9) On multiple occasions, the Government of China has 
     undertaken actions that have contravened the letter or intent 
     of the obligation described in paragraph (8) of this section, 
     including the following:
       (A) In 1999, the Standing Committee of the National 
     People's Congress overruled a decision by the Hong Kong Court 
     of Final Appeal on the right of abode.
       (B) On multiple occasions, the Government of Hong Kong, at 
     the advice of the Government of China, is suspected to have 
     not allowed persons entry into Hong Kong allegedly because of 
     their support for democracy and human rights in Hong Kong and 
     China.
       (C) The Liaison Office of China in Hong Kong has, despite 
     restrictions on interference in the affairs of Hong Kong as 
     detailed in Article 22 of the Basic Law--
       (i) openly expressed support for candidates in Hong Kong 
     for Chief Executive and Legislative Council;
       (ii) expressed views on various policies for the Government 
     of Hong Kong and other internal matters relating to Hong 
     Kong; and
       (iii) on April 17, 2020, asserted that both the Liaison 
     Office of China in Hong Kong and the Hong Kong and Macau 
     Affairs Office of the State Council ``have the right to 
     exercise supervision . . . on affairs regarding Hong Kong and 
     the mainland, in order to ensure correct implementation of 
     the Basic Law''.
       (D) The National People's Congress has passed laws 
     requiring Hong Kong to pass laws banning disrespectful 
     treatment of the national flag and national anthem of China.
       (E) The State Council of China released a white paper on 
     June 10, 2014, that stressed the ``comprehensive 
     jurisdiction'' of the Government of China over Hong Kong and 
     indicated that Hong Kong must be governed by ``patriots''.
       (F) The Government of China has directed operatives to 
     kidnap and bring to the mainland, or is otherwise responsible 
     for the kidnapping of, residents of Hong Kong, including 
     businessman Xiao Jianhua and bookseller Gui Minhai.
       (G) The Government of Hong Kong, acting with the support of 
     the Government of China, introduced an extradition bill that 
     would have permitted the Government of China to request and 
     enforce extradition requests for any individual present in 
     Hong Kong, regardless of the legality of the request or the 
     degree to which it compromised the judicial independence of 
     Hong Kong.
       (H) The spokesman for the Standing Committee of the 
     National People's Congress said, ``Whether Hong Kong's laws 
     are consistent with the Basic Law can only be judged and 
     decided by the National People's Congress Standing Committee. 
     No other authority has the right to make judgments and 
     decisions.''.
       (10) Paragraph 3e of the Joint Declaration states, as 
     reinforced by Article 5 of the Basic Law, that the ``current 
     social and economic systems in Hong Kong will remain 
     unchanged, as so will the life-style.''.
       (11) On multiple occasions, the Government of China has 
     undertaken actions that have contravened the letter or intent 
     of the obligation described in paragraph (10) of this 
     section, including the following:
       (A) In 2002, the Government of China pressured the 
     Government of Hong Kong to introduce ``patriotic'' curriculum 
     in primary and secondary schools.
       (B) The governments of China and Hong Kong proposed the 
     prohibition of discussion of Hong Kong independence and self-
     determination in primary and secondary schools, which 
     infringes on freedom of speech.
       (C) The Government of Hong Kong mandated that Mandarin, and 
     not the native language of Cantonese, be the language of 
     instruction in Hong Kong schools.
       (D) The governments of China and Hong Kong agreed to a 
     daily quota of mainland immigrants to Hong Kong, which is 
     widely believed by citizens of Hong Kong to be part of an 
     effort to ``mainlandize'' Hong Kong.
       (12) Paragraph 3e of the Joint Declaration states, as 
     reinforced by Articles 4, 26, 27, 28, 29, 30, 31, 32 33, 34, 
     and 39 of the Basic Law, that the ``rights and freedoms, 
     including those of person, of speech, of the press, of 
     assembly, of association, of travel, of movement, of 
     correspondence, of strike, of choice of occupation, of 
     academic research and of religious belief will be ensured by 
     law'' in Hong Kong.
       (13) On multiple occasions, the Government of China has 
     undertaken actions that have contravened the letter or intent 
     of the obligation described in paragraph (12) of this 
     section, including the following:
       (A) On February 26, 2003, the Government of Hong Kong 
     introduced a national security bill that would have placed 
     restrictions on freedom of speech and other protected rights.

[[Page H3041]]

       (B) The Liaison Office of China in Hong Kong has pressured 
     businesses in Hong Kong not to advertise in newspapers and 
     magazines critical of the governments of China and Hong Kong.
       (C) The Hong Kong Police Force selectively blocked 
     demonstrations and protests expressing opposition to the 
     governments of China and Hong Kong or the policies of those 
     governments.
       (D) The Government of Hong Kong refused to renew work visa 
     for a foreign journalist, allegedly for hosting a speaker 
     from the banned Hong Kong National Party.
       (E) The Justice Department of Hong Kong selectively 
     prosecuted cases against leaders of the Umbrella Movement, 
     while failing to prosecute police officers accused of using 
     excessive force during the protests in 2014.
       (F) On April 18, 2020, the Hong Kong Police Force arrested 
     14 high-profile democracy activists and campaigners for their 
     role in organizing a protest march that took place on August 
     18, 2019, in which almost 2,000,000 people rallied against a 
     proposed extradition bill.
       (14) Articles 45 and 68 of the Basic Law assert that the 
     selection of Chief Executive and all members of the 
     Legislative Council of Hong Kong should be by ``universal 
     suffrage.''.
       (15) On multiple occasions, the Government of China has 
     undertaken actions that have contravened the letter or intent 
     of the obligation described in paragraph (14) of this 
     section, including the following:
       (A) In 2004, the National People's Congress created new, 
     antidemocratic procedures restricting the adoption of 
     universal suffrage for the election of the Chief Executive of 
     Hong Kong.
       (B) The decision by the National People's Congress on 
     December 29, 2007, which ruled out universal suffrage in 2012 
     elections and set restrictions on when and if universal 
     suffrage will be implemented.
       (C) The decision by the National People's Congress on 
     August 31, 2014, which placed limits on the nomination 
     process for the Chief Executive of Hong Kong as a condition 
     for adoption of universal suffrage.
       (D) On November 7, 2016, the National People's Congress 
     interpreted Article 104 of the Basic Law in such a way to 
     disqualify 6 elected members of the Legislative Council.
       (E) In 2018, the Government of Hong Kong banned the Hong 
     Kong National Party and blocked the candidacy of pro-
     democracy candidates.
       (16) The ways in which the Government of China, at times 
     with the support of a subservient Government of Hong Kong, 
     has acted in contravention of its obligations under the Joint 
     Declaration and the Basic Law, as set forth in this section, 
     are deeply concerning to the people of Hong Kong, the United 
     States, and members of the international community who 
     support the autonomy of Hong Kong.

     SEC. 4. SENSE OF CONGRESS REGARDING HONG KONG.

       It is the sense of Congress that--
       (1) the United States continues to uphold the principles 
     and policy established in the United States-Hong Kong Policy 
     Act of 1992 (22 U.S.C. 5701 et seq.) and the Hong Kong Human 
     Rights and Democracy Act of 2019 (Public Law 116-76; 22 
     U.S.C. 5701 note), which remain consistent with China's 
     obligations under the Joint Declaration and certain 
     promulgated objectives under the Basic Law, including that--
       (A) as set forth in section 101(1) of the United States-
     Hong Kong Policy Act of 1992 (22 U.S.C. 5711(1)), ``The 
     United States should play an active role, before, on, and 
     after July 1, 1997, in maintaining Hong Kong's confidence and 
     prosperity, Hong Kong's role as an international financial 
     center, and the mutually beneficial ties between the people 
     of the United States and the people of Hong Kong.''; and
       (B) as set forth in section 2(5) of the United States-Hong 
     Kong Policy Act of 1992 (22 U.S.C. 5701(5)), ``Support for 
     democratization is a fundamental principle of United States 
     foreign policy. As such, it naturally applies to United 
     States policy toward Hong Kong. This will remain equally true 
     after June 30, 1997.'';
       (2) although the United States recognizes that, under the 
     Joint Declaration, the Government of China ``resumed the 
     exercise of sovereignty over Hong Kong with effect on 1 July 
     1997'', the United States supports the autonomy of Hong Kong 
     in furtherance of the United States-Hong Kong Policy Act of 
     1992 and the Hong Kong Human Rights and Democracy Act of 2019 
     and advances the desire of the people of Hong Kong to 
     continue the ``one country, two systems'' regime, in addition 
     to other obligations promulgated by China under the Joint 
     Declaration and the Basic Law;
       (3) in order to support the benefits and protections that 
     Hong Kong has been afforded by the Government of China under 
     the Joint Declaration and the Basic Law, the United States 
     should establish a clear and unambiguous set of penalties 
     with respect to foreign persons determined by the Secretary 
     of State, in consultation with the Secretary of the Treasury, 
     to be involved in the contravention of the obligations of 
     China under the Joint Declaration and the Basic Law and the 
     financial institutions transacting with those foreign 
     persons;
       (4) the Secretary of State should provide an unclassified 
     assessment of the reason for imposition of certain economic 
     penalties on entities, so as to permit a clear path for the 
     removal of economic penalties if the sanctioned behavior is 
     reversed and verified by the Secretary of State;
       (5) relevant Federal agencies should establish a 
     multilateral sanctions regime with respect to foreign persons 
     involved in the contravention of the obligations of China 
     under the Joint Declaration and the Basic Law; and
       (6) in addition to the penalties on foreign persons, and 
     financial institutions transacting with those foreign 
     persons, for the contravention of the obligations of China 
     under the Joint Declaration and the Basic Law, the United 
     States should take steps, in a time of crisis, to assist 
     permanent residents of Hong Kong who are persecuted or fear 
     persecution as a result of the contravention by China of its 
     obligations under the Joint Declaration and the Basic Law to 
     become eligible to obtain lawful entry into the United 
     States.

     SEC. 5. IDENTIFICATION OF FOREIGN PERSONS INVOLVED IN THE 
                   EROSION OF THE OBLIGATIONS OF CHINA UNDER THE 
                   JOINT DECLARATION OR THE BASIC LAW AND FOREIGN 
                   FINANCIAL INSTITUTIONS THAT CONDUCT SIGNIFICANT 
                   TRANSACTIONS WITH THOSE PERSONS.

       (a) In General.--Not later than 90 days after the date of 
     the enactment of this Act, if the Secretary of State, in 
     consultation with the Secretary of the Treasury, determines 
     that a foreign person is materially contributing to, has 
     materially contributed to, or attempts to materially 
     contribute to the failure of the Government of China to meet 
     its obligations under the Joint Declaration or the Basic Law, 
     the Secretary of State shall submit to the appropriate 
     congressional committees and leadership a report that 
     includes--
       (1) an identification of the foreign person; and
       (2) a clear explanation for why the foreign person was 
     identified and a description of the activity that resulted in 
     the identification.
       (b) Identifying Foreign Financial Institutions.--Not 
     earlier than 30 days and not later than 60 days after the 
     Secretary of State submits to the appropriate congressional 
     committees and leadership the report under subsection (a), 
     the Secretary of the Treasury, in consultation with the 
     Secretary of State, shall submit to the appropriate 
     congressional committees and leadership a report that 
     identifies any foreign financial institution that knowingly 
     conducts a significant transaction with a foreign person 
     identified in the report under subsection (a).
       (c) Exclusion of Certain Information.--
       (1) Intelligence.--The Secretary of State shall not 
     disclose the identity of a person in a report submitted under 
     subsection (a) or (b), or an update under subsection (e), if 
     the Director of National Intelligence determines that such 
     disclosure could compromise an intelligence operation, 
     activity, source, or method of the United States.
       (2) Law enforcement.--The Secretary of State shall not 
     disclose the identity of a person in a report submitted under 
     subsection (a) or (b), or an update under subsection (e), if 
     the Attorney General, in coordination, as appropriate, with 
     the Director of the Federal Bureau of Investigation, the head 
     of any other appropriate Federal law enforcement agency, and 
     the Secretary of the Treasury, determines that such 
     disclosure could reasonably be expected--
       (A) to compromise the identity of a confidential source, 
     including a State, local, or foreign agency or authority or 
     any private institution that furnished information on a 
     confidential basis;
       (B) to jeopardize the integrity or success of an ongoing 
     criminal investigation or prosecution;
       (C) to endanger the life or physical safety of any person; 
     or
       (D) to cause substantial harm to physical property.
       (3) Notification required.--If the Director of National 
     Intelligence makes a determination under paragraph (1) or the 
     Attorney General makes a determination under paragraph (2), 
     the Director or the Attorney General, as the case may be, 
     shall notify the appropriate congressional committees and 
     leadership of the determination and the reasons for the 
     determination.
       (d) Exclusion or Removal of Foreign Persons and Foreign 
     Financial Institutions.--
       (1) Foreign persons.--The President may exclude a foreign 
     person from the report under subsection (a), or an update 
     under subsection (e), or remove a foreign person from the 
     report or update prior to the imposition of sanctions under 
     section 6(a) if the material contribution (as described in 
     subsection (g)) that merited inclusion in that report or 
     update--
       (A) does not have a significant and lasting negative effect 
     that contravenes the obligations of China under the Joint 
     Declaration and the Basic Law;
       (B) is not likely to be repeated in the future; and
       (C) has been reversed or otherwise mitigated through 
     positive countermeasures taken by that foreign person.
       (2) Foreign financial institutions.--The President may 
     exclude a foreign financial institution from the report under 
     subsection (b), or an update under subsection (e), or remove 
     a foreign financial institution from the report or update 
     prior to the imposition of sanctions under section 7(a) if 
     the significant transaction or significant transactions of 
     the foreign financial institution that merited inclusion in 
     that report or update--

[[Page H3042]]

       (A) does not have a significant and lasting negative effect 
     that contravenes the obligations of China under the Joint 
     Declaration and the Basic Law;
       (B) is not likely to be repeated in the future; and
       (C) has been reversed or otherwise mitigated through 
     positive countermeasures taken by that foreign financial 
     institution.
       (3) Notification required.--If the President makes a 
     determination under paragraph (1) or (2) to exclude or remove 
     a foreign person or foreign financial institution from a 
     report under subsection (a) or (b), as the case may be, the 
     President shall notify the appropriate congressional 
     committees and leadership of the determination and the 
     reasons for the determination.
       (e) Update of Reports.--
       (1) In general.--Each report submitted under subsections 
     (a) and (b) shall be updated in an ongoing manner and, to the 
     extent practicable, updated reports shall be resubmitted with 
     the annual report under section 301 of the United States-Hong 
     Kong Policy Act of 1992 (22 U.S.C. 5731).
       (2) Rule of construction.--Nothing in this subsection shall 
     be construed to terminate the requirement to update the 
     reports under subsections (a) and (b) upon the termination of 
     the requirement to submit the annual report under section 301 
     of the United States-Hong Kong Policy Act of 1992 (22 U.S.C. 
     5731).
       (f) Form of Reports.--
       (1) In general.--Each report under subsection (a) or (b) 
     (including updates under subsection (e)) shall be submitted 
     in unclassified form and made available to the public.
       (2) Classified annex.--The explanations and descriptions 
     included in the report under subsection (a)(2) (including 
     updates under subsection (e)) may be expanded on in a 
     classified annex.
       (g) Material Contributions Related to Obligations of China 
     Described.--For purposes of this section, a foreign person 
     materially contributes to the failure of the Government of 
     China to meet its obligations under the Joint Declaration or 
     the Basic Law if the person--
       (1) took action that resulted in the inability of the 
     people of Hong Kong--
       (A) to enjoy freedom of assembly, speech, press, or 
     independent rule of law; or
       (B) to participate in democratic outcomes; or
       (2) otherwise took action that reduces the high degree of 
     autonomy of Hong Kong.

     SEC. 6. SANCTIONS WITH RESPECT TO FOREIGN PERSONS THAT 
                   CONTRAVENE THE OBLIGATIONS OF CHINA UNDER THE 
                   JOINT DECLARATION OR THE BASIC LAW.

       (a) Imposition of Sanctions.--
       (1) In general.--On and after the date on which a foreign 
     person is included in the report under section 5(a) or an 
     update to that report under section 5(e), the President may 
     impose sanctions described in subsection (b) with respect to 
     that foreign person.
       (2) Mandatory sanctions.--Not later than one year after the 
     date on which a foreign person is included in the report 
     under section 5(a) or an update to that report under section 
     5(e), the President shall impose sanctions described in 
     subsection (b) with respect to that foreign person.
       (b) Sanctions Described.--The sanctions described in this 
     subsection with respect to a foreign person are the 
     following:
       (1) Property transactions.--The President may, pursuant to 
     such regulations as the President may prescribe, prohibit any 
     person from--
       (A) acquiring, holding, withholding, using, transferring, 
     withdrawing, transporting, or exporting any property that is 
     subject to the jurisdiction of the United States and with 
     respect to which the foreign person has any interest;
       (B) dealing in or exercising any right, power, or privilege 
     with respect to such property; or
       (C) conducting any transaction involving such property.
       (2) Exclusion from the united states and revocation of visa 
     or other documentation.--In the case of a foreign person who 
     is an individual, the President may direct the Secretary of 
     State to deny a visa to, and the Secretary of Homeland 
     Security to exclude from the United States, the foreign 
     person, subject to regulatory exceptions to permit the United 
     States to comply with the Agreement regarding the 
     Headquarters of the United Nations, signed at Lake Success 
     June 26, 1947, and entered into force November 21, 1947, 
     between the United Nations and the United States, or other 
     applicable international obligations.

     SEC. 7. SANCTIONS WITH RESPECT TO FOREIGN FINANCIAL 
                   INSTITUTIONS THAT CONDUCT SIGNIFICANT 
                   TRANSACTIONS WITH FOREIGN PERSONS THAT 
                   CONTRAVENE THE OBLIGATIONS OF CHINA UNDER THE 
                   JOINT DECLARATION OR THE BASIC LAW.

       (a) Imposition of Sanctions.--
       (1) Initial sanctions.--Not later than one year after the 
     date on which a foreign financial institution is included in 
     the report under section 5(b) or an update to that report 
     under section 5(e), the President shall impose not fewer than 
     5 of the sanctions described in subsection (b) with respect 
     to that foreign financial institution.
       (2) Expanded sanctions.--Not later than two years after the 
     date on which a foreign financial institution is included in 
     the report under section 5(b) or an update to that report 
     under section 5(e), the President shall impose each of the 
     sanctions described in subsection (b).
       (b) Sanctions Described.--The sanctions described in this 
     subsection with respect to a foreign financial institution 
     are the following:
       (1) Loans from united states financial institutions.--The 
     United States Government may prohibit any United States 
     financial institution from making loans or providing credits 
     to the foreign financial institution.
       (2) Prohibition on designation as primary dealer.--Neither 
     the Board of Governors of the Federal Reserve System nor the 
     Federal Reserve Bank of New York may designate, or permit the 
     continuation of any prior designation of, the foreign 
     financial institution as a primary dealer in United States 
     Government debt instruments.
       (3) Prohibition on service as a repository of government 
     funds.--The foreign financial institution may not serve as 
     agent of the United States Government or serve as repository 
     for United States Government funds.
       (4) Foreign exchange.--The President may, pursuant to such 
     regulations as the President may prescribe, prohibit any 
     transactions in foreign exchange that are subject to the 
     jurisdiction of the United States and involve the foreign 
     financial institution.
       (5) Banking transactions.--The President may, pursuant to 
     such regulations as the President may prescribe, prohibit any 
     transfers of credit or payments between financial 
     institutions or by, through, or to any financial institution, 
     to the extent that such transfers or payments are subject to 
     the jurisdiction of the United States and involve the foreign 
     financial institution.
       (6) Property transactions.--The President may, pursuant to 
     such regulations as the President may prescribe, prohibit any 
     person from--
       (A) acquiring, holding, withholding, using, transferring, 
     withdrawing, transporting, importing, or exporting any 
     property that is subject to the jurisdiction of the United 
     States and with respect to which the foreign financial 
     institution has any interest;
       (B) dealing in or exercising any right, power, or privilege 
     with respect to such property; or
       (C) conducting any transaction involving such property.
       (7) Restriction on exports, reexports, and transfers.--The 
     President, in consultation with the Secretary of Commerce, 
     may restrict or prohibit exports, reexports, and transfers 
     (in-country) of commodities, software, and technology subject 
     to the jurisdiction of the United States directly or 
     indirectly to the foreign financial institution.
       (8) Ban on investment in equity or debt.--The President 
     may, pursuant to such regulations or guidelines as the 
     President may prescribe, prohibit any United States person 
     from investing in or purchasing significant amounts of equity 
     or debt instruments of the foreign financial institution.
       (9) Exclusion of corporate officers.--The President may 
     direct the Secretary of State, in consultation with the 
     Secretary of the Treasury and the Secretary of Homeland 
     Security, to exclude from the United States any alien that is 
     determined to be a corporate officer or principal of, or a 
     shareholder with a controlling interest in, the foreign 
     financial institution, subject to regulatory exceptions to 
     permit the United States to comply with the Agreement 
     regarding the Headquarters of the United Nations, signed at 
     Lake Success June 26, 1947, and entered into force November 
     21, 1947, between the United Nations and the United States, 
     or other applicable international obligations.
       (10) Sanctions on principal executive officers.--The 
     President may impose on the principal executive officer or 
     officers of the foreign financial institution, or on 
     individuals performing similar functions and with similar 
     authorities as such officer or officers, any of the sanctions 
     described in paragraphs (1) through (8) that are applicable.
       (c) Timing of Sanctions.--The President may impose 
     sanctions required under subsection (a) with respect to a 
     financial institution included in the report under section 
     5(b) or an update to that report under section 5(e) beginning 
     on the day on which the financial institution is included in 
     that report or update.

     SEC. 8. WAIVER, TERMINATION, EXCEPTIONS, AND CONGRESSIONAL 
                   REVIEW PROCESS.

       (a) National Security Waiver.--Unless a disapproval 
     resolution is enacted under subsection (e), the President may 
     waive the application of sanctions under section 6 or 7 with 
     respect to a foreign person or foreign financial institution 
     if the President--
       (1) determines that the waiver is in the national security 
     interest of the United States; and
       (2) submits to the appropriate congressional committees and 
     leadership a report on the determination and the reasons for 
     the determination.
       (b) Termination of Sanctions and Removal From Report.--
     Unless a disapproval resolution is enacted under subsection 
     (e), the President may terminate the application of sanctions 
     under section 6 or 7 with respect to a foreign person or 
     foreign financial institution and remove the foreign person 
     from the report required under section 5(a) or the foreign 
     financial institution from the report required under section 
     5(b), as the case may be, if the Secretary of State, in 
     consultation with the Secretary of the Treasury, determines 
     that the actions taken by the foreign

[[Page H3043]]

     person or foreign financial institution that led to the 
     imposition of sanctions--
       (1) do not have a significant and lasting negative effect 
     that contravenes the obligations of China under the Joint 
     Declaration and the Basic Law;
       (2) are not likely to be repeated in the future; and
       (3) have been reversed or otherwise mitigated through 
     positive countermeasures taken by that foreign person or 
     foreign financial institution.
       (c) Termination of Act.--
       (1) Report.--
       (A) In general.--Not later than July 1, 2046, the 
     President, in consultation with the Secretary of State, the 
     Secretary of the Treasury, and the heads of such other 
     Federal agencies as the President considers appropriate, 
     shall submit to Congress a report evaluating the 
     implementation of this Act and sanctions imposed pursuant to 
     this Act.
       (B) Elements.--The President shall include in the report 
     submitted under subparagraph (A) an assessment of whether 
     this Act and the sanctions imposed pursuant to this Act 
     should be terminated.
       (2) Termination.--This Act and the sanctions imposed 
     pursuant to this Act shall remain in effect unless a 
     termination resolution is enacted under subsection (e) after 
     July 1, 2047.
       (d) Exception Relating to Importation of Goods.--
       (1) In general.--The authorities and requirements to impose 
     sanctions under sections 6 and 7 shall not include the 
     authority or requirement to impose sanctions on the 
     importation of goods.
       (2) Good defined.--In this subsection, the term ``good'' 
     means any article, natural or manmade substance, material, 
     supply, or manufactured product, including inspection and 
     test equipment, and excluding technical data.
       (e) Congressional Review.--
       (1) Resolutions.--
       (A) Disapproval resolution.--In this section, the term 
     ``disapproval resolution'' means only a joint resolution of 
     either House of Congress--
       (i) the title of which is as follows: ``A joint resolution 
     disapproving the waiver or termination of sanctions with 
     respect to a foreign person that contravenes the obligations 
     of China with respect to Hong Kong or a foreign financial 
     institution that conducts a significant transaction with that 
     person.''; and
       (ii) the sole matter after the resolving clause of which is 
     the following: ``Congress disapproves of the action under 
     section 8 of the Hong Kong Autonomy Act relating to the 
     application of sanctions imposed with respect to a foreign 
     person that contravenes the obligations of China with respect 
     to Hong Kong, or a foreign financial institution that 
     conducts a significant transaction with that person, on 
     _______ relating to ________.'', with the first blank space 
     being filled with the appropriate date and the second blank 
     space being filled with a short description of the proposed 
     action.
       (B) Termination resolution.--In this section, the term 
     ``termination resolution'' means only a joint resolution of 
     either House of Congress--
       (i) the title of which is as follows: ``A joint resolution 
     terminating sanctions with respect to foreign persons that 
     contravene the obligations of China with respect to Hong Kong 
     and foreign financial institutions that conduct significant 
     transactions with those persons.''; and
       (ii) the sole matter after the resolving clause of which is 
     the following: ``The Hong Kong Autonomy Act and any sanctions 
     imposed pursuant to that Act shall terminate on ____.'', with 
     the blank space being filled with the termination date.
       (C) Covered resolution.--In this subsection, the term 
     ``covered resolution'' means a disapproval resolution or a 
     termination resolution.
       (2) Introduction.--A covered resolution may be introduced--
       (A) in the House of Representatives, by the majority leader 
     or the minority leader; and
       (B) in the Senate, by the majority leader (or the majority 
     leader's designee) or the minority leader (or the minority 
     leader's designee).
       (3) Floor consideration in house of representatives.--If a 
     committee of the House of Representatives to which a covered 
     resolution has been referred has not reported the resolution 
     within 10 legislative days after the date of referral, that 
     committee shall be discharged from further consideration of 
     the resolution.
       (4) Consideration in the senate.--
       (A) Committee referral.--
       (i) Disapproval resolution.--A disapproval resolution 
     introduced in the Senate shall be--

       (I) referred to the Committee on Banking, Housing, and 
     Urban Affairs if the resolution relates to an action that is 
     not intended to significantly alter United States foreign 
     policy with regard to China; and
       (II) referred to the Committee on Foreign Relations if the 
     resolution relates to an action that is intended to 
     significantly alter United States foreign policy with regard 
     to China.

       (ii) Termination resolution.--A termination resolution 
     introduced in the Senate shall be referred to the Committee 
     on Banking, Housing, and Urban Affairs and the Committee on 
     Foreign Relations.
       (B) Reporting and discharge.--If a committee to which a 
     covered resolution was referred has not reported the 
     resolution within 10 calendar days after the date of referral 
     of the resolution, that committee shall be discharged from 
     further consideration of the resolution and the resolution 
     shall be placed on the appropriate calendar.
       (C) Proceeding to consideration.--Notwithstanding Rule XXII 
     of the Standing Rules of the Senate, it is in order at any 
     time after the Committee on Banking, Housing, and Urban 
     Affairs or the Committee on Foreign Relations, as the case 
     may be, reports a covered resolution to the Senate or has 
     been discharged from consideration of such a resolution (even 
     though a previous motion to the same effect has been 
     disagreed to) to move to proceed to the consideration of the 
     resolution, and all points of order against the resolution 
     (and against consideration of the resolution) are waived. The 
     motion to proceed is not debatable. The motion is not subject 
     to a motion to postpone. A motion to reconsider the vote by 
     which the motion is agreed to or disagreed to shall not be in 
     order.
       (D) Rulings of the chair on procedure.--Appeals from the 
     decisions of the Chair relating to the application of the 
     rules of the Senate, as the case may be, to the procedure 
     relating to a covered resolution shall be decided without 
     debate.
       (E) Consideration of veto messages.--Debate in the Senate 
     of any veto message with respect to a covered resolution, 
     including all debatable motions and appeals in connection 
     with the resolution, shall be limited to 10 hours, to be 
     equally divided between, and controlled by, the majority 
     leader and the minority leader or their designees.
       (5) Rules relating to senate and house of 
     representatives.--
       (A) Treatment of senate resolution in house.--In the House 
     of Representatives, the following procedures shall apply to a 
     covered resolution received from the Senate (unless the House 
     has already passed a resolution relating to the same proposed 
     action):
       (i) The resolution shall be referred to the appropriate 
     committees.
       (ii) If a committee to which a resolution has been referred 
     has not reported the resolution within 10 legislative days 
     after the date of referral, that committee shall be 
     discharged from further consideration of the resolution.
       (iii) Beginning on the third legislative day after each 
     committee to which a resolution has been referred reports the 
     resolution to the House or has been discharged from further 
     consideration thereof, it shall be in order to move to 
     proceed to consider the resolution in the House. All points 
     of order against the motion are waived. Such a motion shall 
     not be in order after the House has disposed of a motion to 
     proceed on the resolution. The previous question shall be 
     considered as ordered on the motion to its adoption without 
     intervening motion. The motion shall not be debatable. A 
     motion to reconsider the vote by which the motion is disposed 
     of shall not be in order.
       (iv) The resolution shall be considered as read. All points 
     of order against the resolution and against its consideration 
     are waived. The previous question shall be considered as 
     ordered on the resolution to final passage without 
     intervening motion except 2 hours of debate equally divided 
     and controlled by the offeror of the motion to proceed (or a 
     designee) and an opponent. A motion to reconsider the vote on 
     passage of the resolution shall not be in order.
       (B) Treatment of house resolution in senate.--
       (i) Received before passage of senate resolution.--If, 
     before the passage by the Senate of a covered resolution, the 
     Senate receives an identical resolution from the House of 
     Representatives, the following procedures shall apply:

       (I) That resolution shall not be referred to a committee.
       (II) With respect to that resolution--

       (aa) the procedure in the Senate shall be the same as if no 
     resolution had been received from the House of 
     Representatives; but
       (bb) the vote on passage shall be on the resolution from 
     the House of Representatives.
       (ii) Received after passage of senate resolution.--If, 
     following passage of a covered resolution in the Senate, the 
     Senate receives an identical resolution from the House of 
     Representatives, that resolution shall be placed on the 
     appropriate Senate calendar.
       (iii) No senate companion.--If a covered resolution is 
     received from the House of Representatives, and no companion 
     resolution has been introduced in the Senate, the Senate 
     procedures under this subsection shall apply to the 
     resolution from the House of Representatives.
       (C) Application to revenue measures.--The provisions of 
     this paragraph shall not apply in the House of 
     Representatives to a covered resolution that is a revenue 
     measure.
       (6) Rules of house of representatives and senate.--This 
     subsection is enacted by Congress--
       (A) as an exercise of the rulemaking power of the Senate 
     and the House of Representatives, respectively, and as such 
     is deemed a part of the rules of each House, respectively, 
     and supersedes other rules only to the extent that it is 
     inconsistent with such rules; and
       (B) with full recognition of the constitutional right of 
     either House to change the rules (so far as relating to the 
     procedure of

[[Page H3044]]

     that House) at any time, in the same manner, and to the same 
     extent as in the case of any other rule of that House.

     SEC. 9. IMPLEMENTATION; PENALTIES.

       (a) Implementation.--The President may exercise all 
     authorities provided under sections 203 and 205 of the 
     International Emergency Economic Powers Act (50 U.S.C. 1702 
     and 1704) to the extent necessary to carry out this Act.
       (b) Penalties.--A person that violates, attempts to 
     violate, conspires to violate, or causes a violation of 
     section 6 or 7 or any regulation, license, or order issued to 
     carry out that section shall be subject to the penalties set 
     forth in subsections (b) and (c) of section 206 of the 
     International Emergency Economic Powers Act (50 U.S.C. 1705) 
     to the same extent as a person that commits an unlawful act 
     described in subsection (a) of that section.

     SEC. 10. RULE OF CONSTRUCTION.

       Nothing in this Act shall be construed as an authorization 
     of military force against China.

                    Amendment Offered by Mr. Sherman

  Mr. SHERMAN. Madam Speaker, I have an amendment at the desk.
  The SPEAKER pro tempore. The Clerk will report the amendment.
  The Clerk read as follows:
       On page 35, line 16, strike ``calendar'' and insert 
     ``legislative''.
  The amendment was agreed to.
  The bill was ordered to be engrossed and read a third time, was read 
the third time, and passed, and a motion to reconsider was laid on the 
table.

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