[Congressional Record Volume 168, Number 158 (Thursday, September 29, 2022)]
[Senate]
[Pages S5908-S5910]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 6384. Mr. TOOMEY submitted an amendment intended to be proposed to
amendment SA 5499 submitted by Mr. Reed (for himself and Mr. Inhofe)
and intended to be proposed to the bill H.R. 7900, to authorize
appropriations for fiscal year 2023 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 D of title XII, add the following:
SEC. 1254. TRANSPARENCY IN OUTBOUND INVESTMENT IN NATIONAL
CRITICAL TECHNOLOGIES.
The Defense Production Act of 1950 (50 U.S.C. 4501 et seq.)
is amended by adding at the end the following:
``TITLE VIII--OUTBOUND INVESTMENT IN NATIONAL CRITICAL TECHNOLOGIES
``SEC. 801. DEFINITIONS.
``In this title:
``(1) Appropriate congressional committees.--The term
`appropriate congressional committees' means--
``(A) the Committee on Banking, Housing, and Urban Affairs
of the Senate; and
``(B) the Committee on Financial Services of the House of
Representatives.
``(2) Country of concern.--The term `country of concern'
means the People's Republic of China.
``(3) Covered foreign entity.--
``(A) In general.--Subject to regulations prescribed by the
President in accordance with section 806, and except as
provided in subparagraph (B), the term `covered foreign
entity' means--
``(i) any entity that is incorporated in, has a principal
place of business in, or is organized under the laws of, a
country of concern;
``(ii) any entity the equity securities of which are
primarily traded on one or more exchanges in a country of
concern; or
``(iii) any entity in which any entity described in clause
(i) or (ii), or a group of such
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entities, holds, individually or in aggregate, directly or
indirectly, an ownership interest of greater than 50 percent.
``(B) Exception.--The term `covered foreign entity' shall
not include any entity described in subparagraph (A)(ii) that
can demonstrate that a majority of the equity interest in
such entity is ultimately owned by nationals of the United
States or individuals who are not nationals of a country of
concern, as defined in regulations prescribed by the
President.
``(4) Covered investment.--
``(A) In general.--Subject to such regulations as may be
prescribed by the President in accordance with section 806,
and except as provided in subparagraph (C), the term `covered
investment' means any investment engaged in by a United
States person on or after the effective date of such
regulations--
``(i) that involves--
``(I) a direct acquisition of an equity interest or
contingent equity interest in, or monetary capital
contribution in, a covered foreign entity;
``(II) an arrangement for an interest in the short- or
long-term debt obligations of a covered foreign entity that
include government rights characteristic of an equity
investment, management, or other important rights;
``(III) the establishment of a wholly owned subsidiary in a
country of concern;
``(IV) the establishment of a joint venture in a country of
concern or with a covered foreign entity; or
``(V) any deceptive or structured arrangement attempting to
evade falling into a category described in any of subclauses
(I) through (IV); and
``(ii) if--
``(I) the covered foreign entity the investment is in, or
that is formed as a result of the investment, produces,
designs, tests, manufactures, fabricates, or develops a
national critical technology; and
``(II) as a result of the investment, the United States
person imparts management or procedural know-how to the
entity described in subclause (I) that would result in
product improvement or technology development advances in
such technology.
``(B) Exceptions.--The term `covered investment' does not
include--
``(i) any transaction for which the President determines
the value is de minimis;
``(ii) any category of transactions that the President
determines is in the national interest of the United States,
as may be defined by the President through regulations;
``(iii) the acquisition by a United States person of a
multinational corporation that is not headquartered in a
country of concern but has subsidiaries or other assets
located in a country of concern;
``(iv) basic research collaboration, including open source
research;
``(v) sharing of publicly available know-how, including in
standards organizations related to a country of concern; or
``(vi) any transaction that occurred before the effective
date of regulations prescribed in accordance with section
806.
``(5) Export administration regulations.--The term `Export
Administration Regulations' has the meaning given that term
in section 1742 of the Export Control Reform Act of 2018 (50
U.S.C. 4801).
``(6) National critical technology.--The term `national
critical technology' means a technology that--
``(A) relates to semiconductors, artificial intelligence,
or quantum computing; and
``(B) if the technology were produced in the United States,
would be--
``(i)(I) included on the Commerce Control List maintained
by the Bureau of Industry and Security and set forth in
Supplement No. 1 to part 774 of the Export Administration
Regulations; or
``(II) identified as an emerging and foundational
technology pursuant to section 1758 of the Export Control
Reform Act of 2018 (50 U.S.C. 4817); and
``(ii) subject to the requirement for a license under the
Export Administration Regulations for a United States person
to export the technology to a country of concern.
``(7) United states.--The term `United States' means the
several States, the District of Columbia, and any territory
or possession of the United States.
``(8) United states person.--The term `United States
person' means--
``(A) an individual who is a citizen or national of the
United States or alien admitted for permanent residence in
the United States; and
``(B) any corporation, partnership, or entity organized
under the laws of the United States or the laws of any
jurisdiction within the United States.
``SEC. 802. ADMINISTRATION OF INVESTMENT NOTIFICATION
AUTHORITY.
``The President shall delegate the authorities and
functions under this title to the Assistant Secretary of the
Treasury for Investment Security.
``SEC. 803. MANDATORY NOTIFICATION OF COVERED INVESTMENTS.
``(a) Mandatory Notification.--
``(1) In general.--Subject to regulations prescribed by the
President in accordance with section 806, on and after the
effective date of such regulations, a United States person
that plans to engage in a covered investment shall submit to
the President a complete written notification of the
investment not later than 15 days after the date of the start
of the covered investment.
``(2) Inspection of notification.--The President shall--
``(A) upon receipt of a notification under paragraph (1),
promptly inspect the notification for completeness; and
``(B) if the notification is incomplete, promptly inform
the United States person that submits the notification that
the notification is not complete and provide an explanation
of relevant material respects in which the notification is
not complete.
``(b) Confidentiality of Information.--
``(1) In general.--Except as provided in paragraph (2), any
information or documentary material and any information or
materials derived from such information or documentary
materials filed with the President pursuant to this section
shall be exempt from disclosure under section 552 of title 5,
United States Code, and no such information or documentary
material may be made public.
``(2) Exceptions.--The exemption from disclosure provided
by paragraph (1) shall not prevent the disclosure of the
following:
``(A) Information relevant to any administrative or
judicial action or proceeding.
``(B) Information to the chairman and ranking member of the
appropriate congressional committees.
``(C) Information important to the national security
analysis or actions of the President to any domestic
governmental entity, or to any foreign governmental entity of
a United States ally or partner, under the exclusive
direction and authorization of the President, only to the
extent necessary for national security purposes, and subject
to appropriate confidentiality and classification
requirements.
``(D) Information that the parties have consented to be
disclosed to third parties.
``SEC. 804. ANNUAL REPORT.
``(a) In General.--Not later than one year after the date
on which the regulations required by section 806 take effect,
and annually thereafter, the President shall submit to the
appropriate congressional committees a report describing, for
the year preceding submission of the report, the
notifications received under section 803(a).
``(b) Form of Report.--The report required by subsection
(a) shall be submitted in unclassified form, but may include
a classified annex.
``SEC. 805. PENALTIES AND ENFORCEMENT.
``(a) Unlawful Acts.--Subject to regulations prescribed by
the President in accordance with section 806, the following
shall be unlawful:
``(1) Failing to submit a notification under section 803(a)
with respect to a covered investment.
``(2) Making a material misstatement or to omit a material
fact in any information submitted to the President under this
title.
``(b) Civil Penalties.--A civil penalty may be imposed on
any person that commits an unlawful act described in
subsection (a) in an amount not to exceed the greater of--
``(1) $250,000; or
``(2) an amount that is twice the amount of the covered
investment that is the basis of the violation with respect to
which the penalty is imposed.
``SEC. 806. REQUIREMENT FOR REGULATIONS.
``(a) In General.--Not later than 12 months after the date
of the enactment of this title, the President shall finalize
regulations to carry out this title.
``(b) Elements.--Regulations prescribed to carry out this
title--
``(1) shall include specific examples of the types of
investments that will be considered to be covered
investments;
``(2) shall establish a de minimis value for transactions
that will not be considered to be covered investments under
section 801(3)(B)(i); and
``(3) may include exceptions to the definition of `national
critical technology' for technologies the President
determines do not pose a risk to the national security of the
United States.
``(c) Requirements for Certain Regulations.--The President
shall prescribe regulations further defining the terms used
in this title, including `covered investment' and `covered
foreign entity'.
``SEC. 807. AUTHORIZATION OF APPROPRIATIONS.
``(a) In General.--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.
``(b) Hiring Authority.--The Assistant Secretary of the
Treasury for Investment Security 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). The primary responsibility of positions authorized
under the preceding sentence shall be to administer this
title.
``SEC. 808. EFFECTIVE DATE.
``The notification requirements and associated penalties
provided for under this title shall take effect on the date
on which all regulations have been prescribed to carry out
this title in accordance with section 806.
``SEC. 809. EFFECT ON INVESTMENT, TRADE, AND OTHER LAWS.
``(a) Rules of Construction.--Nothing in this title may be
construed--
``(1) to restrain or deter foreign investment in the United
States, United States investment abroad, or trade in goods or
services, if such investment and trade do not pose a risk to
the national security of the United States; or
``(2) to alter or affect the authorities or requirements
under the Export Control Reform Act of 2018 (50 U.S.C. 4801
et seq.).
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``(b) International Emergency Economic Powers Act.--The
President may not use authorities under the International
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to
establish a mechanism for reviewing, screening, or
prohibiting outbound investment other than the mechanism
established by this title.''.
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