[Congressional Record Volume 167, Number 183 (Tuesday, October 19, 2021)]
[Senate]
[Pages S7075-S7077]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 3861. Mr. CASEY submitted an amendment intended to be proposed by
him to the bill S. 2792, to authorize appropriations for fiscal year
2022 for military activities of the Department of Defense, for military
construction, and for defense activities of the Department of Energy,
to prescribe military personnel strengths for such fiscal year, and for
other purposes.; which was ordered to lie on the table; as follows:
At the end of subtitle G of title X, add the following:
SEC. 1064. NATIONAL CRITICAL CAPABILITIES REVIEWS.
(a) In General.--The Trade Act of 1974 (19 U.S.C. 2101 et
seq.) is amended by adding at the end the following:
``TITLE X--NATIONAL CRITICAL CAPABILITIES REVIEWS
``SEC. 1001. DEFINITIONS.
``In this title:
``(1) Appropriate congressional committees.--The term
`appropriate congressional committees' means--
``(A) the Committee on Finance, the Committee on Armed
Services, the Committee on Banking, Housing, and Urban
Affairs, the Committee on Commerce, Science, and
Transportation, the Committee on Health, Education, Labor,
and Pensions, and the Committee on Homeland Security and
Governmental Affairs of the Senate; and
``(B) the Committee on Ways and Means, the Committee on
Armed Services, the Committee on Education and Labor, the
Committee on Financial Services, the Committee on Homeland
Security, and the Committee on Transportation and
Infrastructure of the House of Representatives.
``(2) Committee.--The term `Committee' means the Committee
on National Critical Capabilities established under section
1002.
``(3) Control.--The term `control' means the power, direct
or indirect, whether exercised or not exercised, to
determine, direct, or decide important matters affecting an
entity, subject to regulations prescribed by the Committee.
``(4) Country of concern.--The term `country of concern'--
``(A) has the meaning given the term `foreign adversary' in
section 8(c)(2) of the Secure and Trusted Communications
Networks Act of 2019 (47 U.S.C. 1607(c)(2)); and
``(B) may include a nonmarket economy country (as defined
in section 771(18) of the Tariff Act of 1930 (19 U.S.C.
1677(18))) identified by the Committee for purposes of this
paragraph by regulation.
``(5) Covered transaction.--
``(A) In general.--Except as otherwise provided, the term
`covered transaction' means any of the following
transactions, proposed or pending on or after the date of the
enactment of this title:
``(i) Any transaction by a United States business that--
``(I) shifts or relocates to a country of concern, or
transfers to an entity of concern, the design, development,
production, manufacture, fabrication, supply, servicing,
testing, management, operation, investment, ownership, or any
other essential elements involving one or more national
critical capabilities identified under subparagraph (B)(ii);
or
``(II) could result in an unacceptable risk to a national
critical capability.
``(ii) Any other transaction, transfer, agreement, or
arrangement, the structure of which is designed or intended
to evade or circumvent the application of this title, subject
to regulations prescribed by the Committee.
``(B) Regulations.--
``(i) In general.--The Committee shall prescribe
regulations further defining the term `covered transaction'
in accordance with subchapter II of chapter 5, and chapter 7,
of title 5, United States Code (commonly known as the
`Administrative Procedure Act').
``(ii) Identification of national critical capabilities.--
For purposes of subparagraph (A)(I), the regulations
prescribed by the Committee under clause (i) shall--
``(I) identify the national critical capabilities subject
to that subparagraph based on criteria intended to limit
application of that subparagraph to the subset of national
critical capabilities that is likely to pose an unacceptable
risk to the national security and crisis preparedness of the
United States; and
``(II) enumerate, quantify, prioritize, and set forth
sufficient allowances of, specific types and examples of such
capabilities.
``(6) Crisis preparedness.--The term `crisis preparedness'
means preparedness for--
``(A) a public health emergency declared under section 319
of the Public Health Service Act (42 U.S.C. 247d); or
``(B) a major disaster declared under section 401 of the
Robert T. Stafford Disaster Relief and Emergency Assistance
Act (42 U.S.C. 5170).
``(7) Critical infrastructure.--The term `critical
infrastructure' means systems and assets, whether physical or
virtual, so vital to the United States that the incapacity or
destruction of such systems and assets would have a
debilitating impact on national security, national economic
security, national public health or safety, or any
combination of those matters.
``(8) Entity of concern.--The term `entity of concern'
means an entity--
``(A) the ultimate parent entity of which is domiciled in a
country of concern; or
``(B) that is directly or indirectly controlled by, owned
by, or subject to the influence of a foreign person that has
a substantial nexus with a country of concern.
``(9) Foreign entity.--
``(A) In general.--Except as provided by subparagraph (B),
the term `foreign entity' means any branch, partnership,
group or sub-group, association, estate, trust, corporation
or division of a corporation, or organization organized under
the laws of a foreign country if--
``(i) its principal place of business is outside the United
States; or
``(ii) its equity securities are primarily traded on one or
more foreign exchanges.
``(B) Exception.--The term `foreign entity' does not
include any entity described in subparagraph (A) that can
demonstrate that a majority of the equity interest in such
entity is ultimately owned by nationals of the United States.
``(10) Foreign person.--The term `foreign person' means--
``(A) any foreign national, foreign government, or foreign
entity;
``(B) any entity over which control is exercised or
exercisable by a foreign national, foreign government, or
foreign entity; or
``(C) any entity over which control is exercised or
exercisable by a person described in subparagraph (A) or (B).
``(11) National critical capabilities.--The term `national
critical capabilities', subject to regulations prescribed by
the Committee--
``(A) means systems and assets, whether physical or
virtual, so vital to the United States that the inability to
develop such systems and assets or the incapacity or
destruction of such systems or assets would have a
debilitating impact on national security or crisis
preparedness; and
``(B) includes the following:
``(i) The production, in sufficient quantities, of any of
the following articles:
``(I) Medical supplies, medicines, and personal protective
equipment.
``(II) Articles essential to the operation, manufacture,
supply, service, or maintenance of critical infrastructure.
``(III) Articles critical to infrastructure construction
after a natural or manmade disaster.
``(IV) Articles that are components of systems critical to
the operation of weapons systems, intelligence collection
systems, or items critical to the conduct of military or
intelligence operations.
``(V) Any other articles identified in regulations
prescribed under section 1007.
``(ii) Supply chains for the production of articles
described in clause (i).
``(iii) Essential supply chains for the Department of
Defense.
``(iv) Any other supply chains identified in regulations
prescribed under section 1007.
``(v) Services critical to the production of articles
described in clause (i) or a supply chain described in clause
(ii), (iii), or (iv).
``(vi) Medical services.
``(vii) Services critical to the maintenance of critical
infrastructure.
``(viii) Services critical to infrastructure construction
after a natural or manmade disaster.
``(ix) Any other services identified in regulations
prescribed under section 1007.
``(12) National security.--The term `national security'
includes--
``(A) national security, as defined in section 721(a) of
the Defense Production Act of 1950 (50 U.S.C. 4565(a));
``(B) national defense, as defined in section 702 of that
Act (50 U.S.C. 4552); and
``(C) agricultural security and natural resources security.
``(13) Party.--The term `party', with respect to a
transaction, has the meaning given that term in regulations
prescribed by the Committee.
``(14) United states.--The term `United States' means the
several States, the District of Columbia, and any territory
or possession of the United States.
``(15) United states business.--The term `United States
business' means a person engaged in interstate commerce in
the United States.
``SEC. 1002. COMMITTEE ON NATIONAL CRITICAL CAPABILITIES.
``(a) In General.--There is established a committee, to be
known as the `Committee on National Critical Capabilities',
which shall carry out this title and such other assignments
as the President may designate.
``(b) Membership.--
``(1) In general.--The Committee shall be comprised of the
head, or a designee of the head, of each of the following:
``(A) The Office of the United States Trade Representative.
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``(B) The Department of Commerce.
``(C) The Office of Science and Technology Policy.
``(D) The Department of the Treasury.
``(E) The Department of Homeland Security.
``(F) The Department of Defense.
``(G) The Department of State.
``(H) The Department of Justice.
``(I) The Department of Energy.
``(J) The Department of Health and Human Services.
``(K) The Department of Agriculture.
``(L) The Department of Labor.
``(M) Any other Federal agency the President determines
appropriate, generally or on a case-by-case basis.
``(2) Ex officio members.--
``(A) In general.--In addition to the members of the
Committee specified in paragraph (1), the following shall,
except as provided in subparagraph (B), be nonvoting, ex
officio members of the Committee:
``(i) The Director of National Intelligence.
``(ii) The Administrator of the Federal Emergency
Management Agency.
``(iii) The Director of the National Institute of Standards
and Technology.
``(iv) The Director of the Centers for Disease Control and
Prevention.
``(v) The Director of the National Institute of Allergy and
Infectious Diseases.
``(vi) The Chairperson of the Federal Communications
Commission.
``(vii) The Chairperson of the Securities and Exchange
Commission.
``(viii) The Chairperson of the Commodity Futures Trading
Commission.
``(ix) The Administrator of the Federal Aviation
Administration.
``(B) Designation as voting members.--The chairperson of
the Committee may designate any of the officials specified in
clauses (ii) through (ix) of subparagraph (A) as voting
members of the Committee.
``(c) Chairperson.--
``(1) In general.--The United States Trade Representative
shall serve as the chairperson of the Committee.
``(2) Consultations with secretaries of defense and
commerce.--In carrying out the duties of the chairperson of
the Committee, the United States Trade Representative shall
consult with the Secretary of Defense and the Secretary of
Commerce.
``(d) Designation of Officials to Carry Out Duties Related
to Committee.--The head of each agency represented on the
Committee shall designate an official, at or equivalent to
the level of Assistant Secretary in the Department of the
Treasury, who is appointed by the President, by and with the
advice and consent of the Senate, to carry out such duties
related to the Committee as the head of the agency may
assign.
``SEC. 1003. REVIEW OF COVERED TRANSACTIONS.
``(a) Mandatory Notification.--A United States business
that engages in a covered transaction shall submit a written
notification of the transaction to the Committee.
``(b) Review.--
``(1) In general.--Not later than 60 days after receiving
written notification under subsection (a) of a covered
transaction, the Committee may--
``(A) review the transaction to determine if the
transaction is likely to result in an unacceptable risk to
one or more national critical capabilities, including by
considering factors specified in section 1005; and
``(B) if the Committee determines under subparagraph (A)
that the transaction poses a risk described in that
subparagraph, make recommendations--
``(i) to the President for appropriate action that may be
taken under this title or under other existing authorities to
address or mitigate that risk; and
``(ii) to Congress for the establishment or expansion of
Federal programs to support the production or supply of
articles and services described in section 1001(a)(11)(B) in
the United States.
``(2) Unilateral initiation of review.--The Committee may
initiate a review under paragraph (1) of a covered
transaction for which written notification is not submitted
under subsection (a).
``(3) Initiation of review by request from congress.--The
Committee shall initiate a review under paragraph (1) of a
covered transaction if the chairperson and the ranking member
of one of the appropriate congressional committees jointly
request the Committee to review the transaction.
``(c) Treatment of Business Confidential Information.--A
United States business shall submit each notification
required by subsection (a) to the Committee--
``(1) in a form that includes business confidential
information; and
``(2) in a form that omits business confidential
information and is appropriate for disclosure to the public.
``SEC. 1004. ACTION BY THE PRESIDENT.
``(a) In General.--Subject to subsection (d), the President
may take such action for such time as the President considers
appropriate to address or mitigate any unacceptable risk
posed by a covered transaction to one or more national
critical capabilities, including suspending or prohibiting
the covered transaction.
``(b) Announcement by the President.--The President shall
announce the decision on whether or not to take action
pursuant to subsection (a) with respect to a covered
transaction not later than 15 days after the date on which
the review of the transaction under section 1003 is
completed.
``(c) Enforcement.--The President may direct the Attorney
General of the United States to seek appropriate relief,
including divestment relief, in the district courts of the
United States, in order to implement and enforce this
section.
``(d) Findings of the President.--The President may
exercise the authority conferred by subsection (a) to suspend
or prohibit a covered transaction only if the President finds
that--
``(1) there is credible evidence that leads the President
to believe that the transaction poses an unacceptable risk to
one or more national critical capabilities; and
``(2) provisions of law (other than this section) do not,
in the judgment of the President, provide adequate and
appropriate authority for the President to protect such
capabilities.
``(e) Factors To Be Considered.--For purposes of
determining whether to take action under subsection (a), the
President shall consider, among other factors, each of the
factors described in section 1005, as appropriate.
``SEC. 1005. FACTORS TO BE CONSIDERED.
``The Committee, in reviewing and making a determination
with respect to a covered transaction under section 1003, and
the President, in determining whether to take action under
section 1004 with respect to a covered transaction, shall
consider any factors relating to national critical
capabilities that the Committee or the President considers
relevant, including--
``(1) the long-term strategic economic, national security,
and crisis preparedness interests of the United States;
``(2) the history of distortive or predatory trade
practices in each country in which a foreign person that is a
party to the transaction is domiciled;
``(3) control and beneficial ownership (as determined in
accordance with section 847 of the National Defense
Authorization Act for Fiscal Year 2020 (Public Law 116-92; 10
U.S.C. 2509 note)) of each foreign person that is a party to
the transaction; and
``(4) impact on the domestic industry and resulting
resiliency, including the domestic skills base, taking into
consideration any pattern of foreign investment in the
domestic industry.
``SEC. 1006. SUPPLY CHAIN SENSITIVITIES.
``The Committee shall determine the sensitivities and risks
for sourcing of articles described in section
1001(a)(11)(B)(i), in accordance with the following:
``(1) The sourcing of least concern shall be articles the
supply chains for which are housed in whole within countries
that are allies of the United States.
``(2) The sourcing of greater concern shall be articles the
supply chains for which are housed in part within countries
of concern or from an entity of concern but for which
substitute production is available from elsewhere at required
scale.
``(3) The sourcing of greatest concern shall be articles
the supply chains for which are housed wholly or in part in
countries of concern or from an entity of concern and for
which substitute production is unavailable elsewhere at
required scale.
``SEC. 1007. IDENTIFICATION OF ADDITIONAL NATIONAL CRITICAL
CAPABILITIES.
``(a) In General.--The Committee should prescribe
regulations to identify additional articles, supply chains,
and services to recommend for inclusion in the definition of
`national critical capabilities' under section 1001(a)(11).
``(b) Review of Industries.--
``(1) In general.--In identifying under subsection (a)
additional articles, supply chains, and services to recommend
for inclusion in the definition of `national critical
capabilities' under section 1001(a)(11), the Committee should
conduct a review of industries identified by Federal
Emergency Management Agency as carrying out emergency support
functions, including the following industries:
``(A) Energy.
``(B) Medical.
``(C) Communications, including electronic and
communications components.
``(D) Defense.
``(E) Transportation.
``(F) Aerospace, including space launch.
``(G) Robotics.
``(H) Artificial intelligence.
``(I) Semiconductors.
``(J) Shipbuilding.
``(K) Water, including water purification.
``(2) Quantification.--In conducting a review of industries
under paragraph (1), the Committee should specify the
quantity of articles, supply chains, and services, and
specific types and examples of transactions, from each
industry sufficient to maintain national critical
capabilities.
``SEC. 1008. REPORTING REQUIREMENTS.
``(a) Annual Report to Congress.--
``(1) In general.--Not later than 90 days after the date of
the enactment of the National Defense Authorization Act for
Fiscal Year 2022, and annually thereafter, the Committee
shall submit to the appropriate congressional committees a
report--
``(A) on the determination under section 1006 with respect
to sensitivities and risks for sourcing of articles described
in section 1001(a)(11)(B)(i);
``(B) assessing whether identification of additional
national critical capabilities under section 1007 is
necessary; and
``(C) describing, for the year preceding submission of the
report--
``(i) the notifications received under subsection (a) of
section 1003 and reviews conducted pursuant to such
notifications;
``(ii) reviews initiated under paragraph (2) or (3) of
subsection (b) of that section;
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``(iii) actions recommended by the Committee under
subsection (b)(1)(B) of that section as a result of such
reviews; and
``(iv) reviews during which the Committee determined no
action was required; and
``(D) assessing the overall impact of such reviews on
national critical capabilities.
``(2) Form of report.--The report required by paragraph (1)
shall be submitted in unclassified form but may include a
classified annex.
``(b) Use of Defense Production Act of 1950 Authorities.--
Not later than 180 days after the date of the enactment of
the National Defense Authorization Act for Fiscal Year 2022,
the Committee shall submit to Congress a report that includes
recommendations relating to use the authorities under title
III of the Defense Production Act of 1950 (50 U.S.C. 4531 et
seq.) to make investments to enhance national critical
capabilities and reduce dependency on materials and services
imported from foreign countries.
``SEC. 1009. REQUIREMENT FOR REGULATIONS.
``(a) In General.--The Committee shall prescribe
regulations to carry out this title.
``(b) Elements.--Regulations prescribed to carry out this
title shall--
``(1) provide for the imposition of civil penalties for any
violation of this title, including any mitigation agreement
entered into, conditions imposed, or order issued pursuant to
this title; and
``(2) include specific examples of the types of--
``(A) the transactions that will be considered to be
covered transactions; and
``(B) the articles, supply chains, and services that will
be considered to be national critical capabilities.
``(c) Coordination.--In prescribing regulations to carry
out this title, the Committee shall coordinate with the
United States Trade Representative, the Under Secretary of
Commerce for Industry and Security, and the Committee on
Foreign Investment in the United States to avoid duplication
of effort.
``SEC. 1010. REQUIREMENTS RELATED TO GOVERNMENT PROCUREMENT.
``(a) In General.--Not later than 90 days after the date of
the enactment of the National Defense Authorization Act for
Fiscal Year 2022, the Federal Acquisition Regulation shall be
revised to require each person that is a prospective
contractor for an executive agency to disclose the supply
chains the person would use to carry out the contract and the
extent to which the person would depend on articles and
services imported from foreign countries, including the
percentage of such materials and services imported from
countries of concern.
``(b) Materiality.--The head of an executive agency shall
consider the failure of a person to make the disclosures
required by subsection (a) to be material determinants in
awarding a contract to that person.
``(c) Applicability.--The revisions to the Federal
Acquisition Regulation required under subsection (a) shall
apply with respect to contracts for which solicitations are
issued on or after the date that is 90 days after the date of
the enactment of the National Defense Authorization Act for
Fiscal Year 2022.
``(d) Definitions.--In this section:
``(1) Executive agency.--The term `executive agency' has
the meaning given that term in section 133 of title 41,
United States Code.
``(2) Federal acquisition regulation.--The term `Federal
Acquisition Regulation' means the regulation issued pursuant
to section 1303(a)(1) of title 41, United States Code.
``SEC. 1011. MULTILATERAL ENGAGEMENT AND COORDINATION.
``The United States Trade Representative--
``(1) should, in coordination and consultation with
relevant Federal agencies, conduct multilateral engagement
with the governments of countries that are allies of the
United States to secure coordination of protocols and
procedures with respect to covered transactions with
countries of concern; and
``(2) upon adoption of protocols and procedures described
in paragraph (1), shall work with those governments to
establish information sharing regimes.
``SEC. 1012. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated such sums as may
be necessary to carry out this title, including to provide
outreach to industry and persons affected by this title.
``SEC. 1013. RULE OF CONSTRUCTION WITH RESPECT TO FREE AND
FAIR COMMERCE.
``Nothing in this title may be construed as prohibiting or
limiting the free and fair flow of commerce outside of the
United States that does not pose an unacceptable risk to a
national critical capability.''.
(b) Clerical Amendment.--The table of contents for the
Trade Act of 1974 is amended by adding at the end the
following:
``TITLE X--NATIONAL CRITICAL CAPABILITIES REVIEWS
``Sec. 1001. Definitions.
``Sec. 1002. Committee on National Critical Capabilities.
``Sec. 1003. Review of covered transactions.
``Sec. 1004. Action by the President.
``Sec. 1005. Factors to be considered.
``Sec. 1006. Supply chain sensitivities.
``Sec. 1007. Identification of additional national critical
capabilities.
``Sec. 1008. Reporting requirements.
``Sec. 1009. Requirement for regulations.
``Sec. 1010. Requirements related to government procurement.
``Sec. 1011. Multilateral engagement and coordination.
``Sec. 1012. Authorization of appropriations.
``Sec. 1013. Rule of construction with respect to free and fair
commerce.''.
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