[Congressional Record Volume 170, Number 139 (Monday, September 9, 2024)]
[House]
[Pages H5042-H5046]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 TAIWAN CONFLICT DETERRENCE ACT OF 2023

  Mrs. KIM of California. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 554) to deter Chinese aggression towards Taiwan by 
requiring the Secretary of the Treasury to publish a report on 
financial institutions and accounts connected to senior officials of 
the People's Republic of China, to restrict financial services for 
certain immediate family of such officials, and for other purposes, as 
amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                H.R. 554

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

[[Page H5043]]

  


     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Taiwan Conflict Deterrence 
     Act of 2023''.

     SEC. 2. REPORT ON FINANCIAL INSTITUTIONS AND ACCOUNTS 
                   CONNECTED TO CERTAIN CHINESE GOVERNMENT 
                   OFFICIALS.

       (a) Financial Institutions Report.--
       (1) In general.--Not later than 90 days after the date that 
     the President, pursuant to section 3(c) of the Taiwan 
     Relations Act (22 U.S.C. 3302(c)), informs the Congress of a 
     threat resulting from actions of the People's Republic of 
     China and any danger to the interests of the United States 
     arising therefrom, and annually thereafter for 3 years, the 
     Secretary of the Treasury shall submit a report to the 
     appropriate Members of Congress containing the following:
       (A) With respect to each of at least 10 natural persons 
     described under subsection (b), at least 1 of whom is a 
     natural person listed under paragraph (1) of such subsection 
     (b) and at least 1 of whom is a natural person listed under 
     paragraph (2) of such subsection (b), the estimated total 
     funds that are held in financial institutions and are under 
     direct or indirect control by such natural person and a 
     description of such funds.
       (B) A list of any financial institutions that--
       (i) maintain an account in connection with significant 
     funds described in subparagraph (A); or
       (ii) otherwise provide significant financial services to a 
     natural person covered by the report.
       (2) Briefing required.--Not later than 30 days after 
     submitting a report described under paragraph (1), the 
     Secretary of the Treasury, or a designee of the Secretary, 
     shall provide to the appropriate Members of Congress an 
     unclassified or classified briefing (as determined 
     appropriate by the Secretary) on the funds covered by the 
     report, including a description of how the funds were 
     acquired, and any illicit or corrupt means employed to 
     acquire or use the funds.
       (3) Exemptions.--The requirements described under paragraph 
     (1) may not be applied with respect to a natural person or a 
     financial institution, as the case may be, if the President 
     determines:
       (A) The funds described under paragraph (1)(A) were 
     primarily acquired through legal and noncorrupt means.
       (B) The natural person has agreed to provide significant 
     cooperation to the United States for an important national 
     security purpose with respect to China.
       (C) A financial institution has agreed to--
       (i) no longer maintain an account described under paragraph 
     (1)(B)(i);
       (ii) no longer provide significant financial services to a 
     natural person covered by the report; or
       (iii) provide significant cooperation to the United States 
     for an important national security purpose with respect to 
     China.
       (4) Waiver.--The President may waive any requirement 
     described under paragraph (1) with respect to a natural 
     person or a financial institution upon reporting to the 
     appropriate Members of Congress that--
       (A) the waiver would substantially promote the objective of 
     ending the threat described under paragraph (1);
       (B) the threat described under paragraph (1) is no longer 
     present; or
       (C) the waiver is essential to the national security 
     interests of the United States.
       (b) Natural Persons Described.--The natural persons 
     described in this subsection are persons who, at the time of 
     a report, are the following:
       (1) A member of the Politburo Standing Committee of the 
     Chinese Communist Party.
       (2) A member of the Politburo of the Chinese Communist 
     Party that is not described under paragraph (1).
       (3) A member of the Central Committee of the Chinese 
     Communist Party that--
       (A) is none of the foregoing; and
       (B) performs any official duty that directly or indirectly 
     affects Taiwan.
       (c) Form of Reports; Public Availability.--
       (1) Form.--The reports required under paragraphs (1) and 
     (4) of subsection (a) shall be submitted in unclassified form 
     but may contain a classified annex.
       (2) Public availability.--The Secretary of the Treasury 
     shall make the unclassified portion of the report required 
     under subsection (a)(1) available to the public on the 
     website and social media accounts of the Department of the 
     Treasury--
       (A) in English, Chinese, and any other language that the 
     Secretary finds appropriate; and
       (B) in precompressed, easily downloadable versions that are 
     made available in all appropriate formats.

     SEC. 3. PROHIBITION ON FINANCIAL SERVICES FOR CERTAIN 
                   IMMEDIATE FAMILY.

       (a) In General.--The Secretary of the Treasury shall 
     prohibit a United States financial institution, and any 
     person owned or controlled by a United States financial 
     institution, from engaging in a significant transaction 
     with--
       (1) a natural person covered by a report made under section 
     2(a); and
       (2) the immediate family of a person described under 
     paragraph (1), if the Secretary finds that such immediate 
     family benefits from funds described in the report.
       (b) Exceptions.--
       (1) Exception for intelligence, law enforcement, and 
     national security activities.--Subsection (a) shall not apply 
     with respect to any intelligence, law enforcement, or 
     national security activity of the United States.
       (2) Waiver.--The President may waive the application of 
     subsection (a) with respect to a person upon reporting to the 
     appropriate Members of Congress that--
       (A) the waiver would substantially promote the objective of 
     ending the threat described under section 2(a)(1);
       (B) the threat described under section 2(a)(1) is no longer 
     present; or
       (C) the waiver is essential to the national security 
     interests of the United States.
       (3) Form of reports.--The reports required under paragraph 
     (2) shall be submitted in unclassified form but may contain a 
     classified annex.
       (4) Rule of construction.--
       (A) In general.--Nothing in this section shall be construed 
     as authorizing or requiring any sanction with respect to the 
     importation of any good.
       (B) Good defined.--In this paragraph, the term ``good'' 
     means any article, natural or manmade substance, material, 
     supply or manufactured product, including inspection and test 
     equipment, and excluding technical data.
       (c) Implementation; Penalties.--
       (1) Implementation.--The President may exercise all 
     authorities provided to the President under sections 203 and 
     205 of the International Emergency Economic Powers Act (50 
     U.S.C. 1702 and 1704) to carry out this section. Not later 
     than 60 days after issuing a license pursuant to this 
     section, the President shall submit a copy of the license to 
     the appropriate Members of Congress.
       (2) Penalties.--A person that violates, attempts to 
     violate, conspires to violate, or causes a violation of this 
     section or any regulation, license, or order issued to carry 
     out this 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 206.
       (d) Termination.--This section shall have no force or 
     effect on the earlier of--
       (1) the date that is 30 days after the date that the 
     President reports to the appropriate Members of Congress that 
     the threat described under section 2(a)(1) is no longer 
     present; or
       (2) the date that is 25 years after the date that the 
     Secretary of the Treasury submits the final report required 
     under section 2(a)(1).

     SEC. 4. DEFINITIONS.

       For purposes of this Act:
       (1) Appropriate members of congress.--The term 
     ``appropriate Members of Congress'' means the Speaker and 
     minority leader of the House of Representatives, the majority 
     leader and minority leader of the Senate, the Chairman and 
     Ranking Member of the Committee on Financial Services of the 
     House of Representatives, and the Chairman and Ranking Member 
     of the Committee on Banking, Housing, and Urban Affairs of 
     the Senate.
       (2) Financial institution.--The term ``financial 
     institution'' means a United States financial institution or 
     a foreign financial institution.
       (3) Foreign financial institution.--The term ``foreign 
     financial institution'' has the meaning given that term in 
     section 561.308 of title 31, Code of Federal Regulations.
       (4) Funds.--The term ``funds'' has the meaning given to 
     such term by the Secretary of the Treasury.
       (5) Immediate family.--The term ``immediate family'' of any 
     natural person means the following (whether by the full or 
     half blood or by adoption):
       (A) Such person's spouse, father, mother, children, 
     brothers, sisters, and grandchildren.
       (B) The father, mother, brothers, and sisters of such 
     person's spouse.
       (C) The spouse of a child, brother, or sister of such 
     person.
       (6) United states financial institution.--The term ``United 
     States financial institution'' has the meaning given the term 
     ``U.S. financial institution'' under section 561.309 of title 
     31, Code of Federal Regulations.

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


                             General Leave

  Mrs. KIM of California. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days in which to revise and extend their 
remarks and include extraneous material on this bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from California?
  There was no objection.
  Mrs. KIM of California. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, I rise in support of H.R. 554, the Taiwan Conflict 
Deterrence Act, authored by the gentleman from Arkansas (Mr. Hill).
  The Financial Services Committee has repeatedly pressed 
administration officials to devise a plan that imposes real costs on 
the Chinese Communist Party in the event it invades Taiwan. The time to 
formulate those measures is now. We must publicly communicate what we 
intend to do so that Beijing thinks twice before launching an attack 
against our friends on the island.
  This is why Mr. Hill's legislation is so important. If Beijing 
chooses to invade Taiwan, this bill requires the

[[Page H5044]]

Treasury Secretary to publish the ill-gotten gains of the Chinese 
Communist Party's top leadership no matter where they may be held 
around the world.
  It would also require Treasury to expose the financial institutions 
that maintain accounts for those officials while prohibiting U.S. banks 
from letting their immediate families benefit from any of the funds.
  Too often, Washington chooses to be reactive when it comes to our 
adversaries, scrambling to develop sanctions and other measures after 
the fact. Russia's invasion of Ukraine is a case in point. Mr. Hill's 
legislation is proactive. It signals what is at stake to the Chinese 
Communist Party before Beijing goes too far.
  I also point out that this legislation underscores an important point 
that Republicans and Democrats alike have made. Our problem lies with 
the Chinese Government, not the people of China, many of whom suffer 
daily under the thumb of Beijing's dictatorship. The Taiwan Conflict 
Deterrence Act recognizes this.
  By promising to publish the corrupt assets of PRC's top leadership, 
the bill would force CCP officials to face the ire of their own people, 
so many of whom are fed up with the illicit wealth of the CCP insiders.
  I again commend Mr. Hill for his leadership in crafting this measure, 
which received unanimous support from the Financial Services Committee 
when we marked it up last year.
  Mr. Speaker, I urge all of my colleagues to vote in support of H.R. 
554, and I reserve the balance of my time.
  Mr. SHERMAN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 554, the Taiwan Conflict 
Deterrence Act of 2023, sponsored by Representative Hill. I am pleased 
to be the chief Democratic cosponsor of this legislation.
  As China contemplates the possibility of an invasion or blockade of 
Taiwan, keeping in mind President Xi has told his military to be ready 
for an invasion by 2027, they faced from the United States strategic 
ambiguity as to what our military response would be.
  Mr. Speaker, President Biden has announced that he would respond 
militarily, but President Biden will be leaving office in a few months. 
Any decision by the executive branch to deploy our forces is actually 
something that would be decided upon at the time and given the 
circumstances that exist.
  We in Congress, while I don't think, by statute, we could compel the 
deployment of our military forces, we can lock into statute economic 
responses that should not be ambiguous but should be very clear to 
Beijing.
  Mr. Speaker, I have a bill that goes beyond the legislation we are 
considering here today that would remove most-favored-nation status 
from China if it invades or blockades Taiwan and lock that in so that 
Beijing knows that a military action against Taiwan would result in 
that enormous economic consequence.
  This bill, I think, is a step in the right direction. As the bill's 
title suggests, it is designed to put the government of China on notice 
that the United States is closely watching its increasing threats 
toward Taiwan, and it serves as a warning that the U.S. will respond 
economically and that that is locked into statute should its aggression 
amount to a violation of section 3(c) of the Taiwan Relations Act.

                              {time}  1445

  I will point out that a violation of section 3(c) would include an 
invasion or blockade, but could also involve other aggressive actions 
of a less significant nature.
  This is a tangible concern given the Chinese military activity in the 
region appears to be escalating as demonstrated by daily incursions 
undertaken by the Chinese military into Taiwan's air defense 
identification zone or across the median line of the Taiwan Strait.
  In May, China conducted a large-scale military exercise near the 
island of Taiwan, intended to intimidate the Taiwanese people as they 
celebrated the inauguration of a new democratically elected President.
  This bill would put pressure on China to not go further by requiring 
a response of the U.S. Government if its intimidation and coercion go 
to the point of triggering section 3(c) of the Taiwan Relations Act.
  Specifically, if there is a notification by the President under 
section 3(c) of a threat resulting from the actions of the People's 
Republic of China and a danger to the interests of the United States 
arising therefrom, the bill would require the Secretary of the Treasury 
to create and to make public the findings of a report on financial 
institutions and accounts that are connected to a select group of 
Chinese Communist Party officials.
  This bill does not focus on retaliating against the Chinese 
Government per se, but rather on individuals who are in that 
government. The report is intended to raise public awareness of the 
hidden and corruptly gained funds that are directly or indirectly 
controlled by such individuals. It is designed to undermine the support 
of the Chinese Communist Party and its level of support inside China 
once we publish the corrupt gains of some of its high-ranking 
officials.
  For those listed in the report and their immediate family members, 
the bill would also restrict U.S.-based financial services, intending 
to limit the financial options for these officials and to extend the 
deterrent or punitive impacts on those officials and their families. 
For assets in the United States, it is a freezing of those assets.
  I will underscore again that these actions as set forth in the bill 
occur only if the President exercises his, or soon, her, authority 
under section 3(c) of the Taiwan Relations Act.
  Now, no President in the past has ever triggered section 3(c), and I 
hope that such a triggering is never necessary. I don't expect that a 
triggering will ever occur, but it is important to put Beijing on 
notice of what would happen if their threats against Taiwan raise to 
that level. The Taiwan Relations Act has been in effect for 40 years, 
and as I have said, no administration has triggered section 3(c). It 
did not even occur during the third Taiwan Strait crisis of the 1990s.
  Democrats have worked on this bill. We have seen changes in the 
original bill, including the addition of Presidential waivers for 
national security, intelligence, and other purposes. For these reasons, 
I urge my colleagues to support this bill, and I reserve the balance of 
my time.
  Mrs. KIM of California. Mr. Speaker, I yield such time as he may 
consume to the gentleman from Arkansas (Mr. Hill).
  Mr. HILL. Mr. Speaker, I thank very much Chair Kim for yielding.
  Mr. Speaker, what a marvelous signal it sends to the world and to the 
United States to have Young Kim as our chair on the Foreign Affairs 
Subcommittee of the Indo-Pacific. She is a young woman born in South 
Korea, a proud American citizen, a proud American mom, and now Member 
of Congress and spectacular chair.
  Mr. Speaker, to my other friend from California, Mr. Sherman, I think 
he has made some outstanding arguments on behalf of our bill, and I 
thank him for being an original cosponsor of H.R. 554, the Taiwan 
Conflict Deterrence Act.
  I modeled this bill on the Holding Iranian Leaders Accountable Act 
included in our national security package, which the House passed and 
President Biden signed into law this spring.
  The idea is very straightforward: If we want to see the world's 
Communists and autocratic dictatorships change course, we must expose 
their wealth, corruption, and financial privilege of their elites to 
the citizens suffering daily under their rule.
  This approach certainly applies to China's Communist Party, as well. 
The CCP leaders sit atop an authoritarian state littered with cronyism, 
kickbacks, graft, bribery, and a colossal misuse of public funds.
  If China chooses to attack the free people of Taiwan, H.R. 554 
requires the Treasury Secretary to publish the illicit assets of 
Beijing's senior-most leaders, including the names of financial 
institutions that maintain the accounts.
  As Mr. Sherman noted, our 1979 recognition of the government in 
Peking, now Beijing, rests on the foundation that the future of Taiwan 
would be determined by peaceful means and that any other method, 
including boycotts or embargoes, is considered a threat to

[[Page H5045]]

peace and security in the western Pacific.
  At a time when the Chinese youth face a 17 percent unemployment rate, 
Xi has failed to deliver a social safety net, and families are battered 
by sinking real estate debt. Let these corrupt officials explain to 
ordinary Chinese citizens how they acquired their riches on a 
government salary, even as they call on their public to support war 
across the Taiwan Strait.
  This bill goes beyond just naming and shaming. It will also cut off 
access to the United States financial system for those CCP officials 
and their immediate family. This point is worth highlighting in order 
to convey the costs that Beijing will bear if they impose an embargo, 
boycott, or launch military action. Blocking Chinese leaders' use of 
the dollar will certainly be mirrored by restrictions from other major 
economies, as well. Further, for Chinese officials whose families 
profit from their ill-gotten gains, they too will find the world 
becoming a much smaller place.

  In 2012, The Washington Post reported that most of China's politburo 
standing committee have children or grandchildren studying here in the 
United States, including CCP Chairman, Xi Jinping. Such privileges will 
be put in jeopardy if China decides to act against Taiwan. H.R. 554 
guarantees it.
  Let me underline one other detail of this legislation, which is 
central to how it works.
  The bill triggers reporting on China's leadership, but it also 
contains exemptions for those who cooperate with the United States. If 
Chairman Xi engages in hostilities against Taiwan, the asset report 
required by this bill might leave out a number of his colleagues, but 
is this because the Treasury Secretary simply targeted other 
individuals or because the unnamed officials turned state's evidence, 
earning themselves an exemption from the U.S. sanctions?
  No one in the CCP will ever know for sure.
  By the same token, everyone covered by this bill has an incentive to 
turn against the politburo if they determine to take aggressive action 
in violation of their commitments against Taiwan before it is too late 
for them and they see their finances laid bare.
  The legislation treats the CCP like the kleptocratic centrally 
planned Communist state that it is. It is the same way we frequently 
have defeated organized crime, sowing distrust and paranoia. We must do 
the same in Beijing if China moves against Taiwan.
  Mr. Speaker, as Mr. Sherman noted, no one wishes to see conflict 
involving Taiwan, but we want to deter China from their worst instincts 
of potentially taking hostile actions. We must signal those 
consequences clearly and early.
  Earlier this summer, Taiwan recorded 66 Chinese military planes 
operating around the island setting a single-day record. Fifty-six of 
those aircraft entered Taiwan's air defense identification zone.
  Last month, Taiwan's defense ministry reported to lawmakers in Taipei 
how Beijing is developing new weapons and tactics to pressure the 
island. It is up to Congress and the executive branch to communicate 
that war across the Taiwan Strait would destroy the global economy, 
impoverish the Chinese people, and now, thanks to H.R. 554, impose 
significant personal costs for the Chinese elite and high-ranking CCP 
members, but the time to do this is before the outbreak of any threats 
or hostilities.
  Again, I thank Chairwoman Kim and my colleagues on the Financial 
Services Committee for endorsing this legislation during its markup.
  Mr. Speaker, I urge all our colleagues to support this bill with a 
``yes'' vote.
  Mr. SHERMAN. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, I join the gentlewoman from California in a parallel 
career. She is our chair of the Foreign Affairs Subcommittee on Asia 
and the Pacific. I was once chair of that subcommittee, and we both 
serve on two committees: Financial Services, Foreign Affairs. She has 
reflected an understanding of our situation with China, and that 
situation is that we don't want to respond to an invasion or blockade 
of Taiwan. We want to prevent an invasion or blockade of Taiwan.
  The way to do that is on three levels. Most important and most 
expensive for the United States is that we have very substantial 
military capacities in the South China Sea and the Pacific in general. 
We have spent much time on this floor and literally hundreds of 
billions of dollars developing that capacity.
  Second, and an element that Congress should explore, is that we need 
to have locked into statute broad-based and immediate economic 
consequences to the entire Chinese economy if, God forbid, their 
government invades or blockades. That is why I am seeking cosponsors 
for legislation that would say in the case of such an invasion or 
blockade, China would lose its MFN status.
  Third, in addition to the military and the broad economic, we need 
the focused, personal economic consequences. That is what this bill 
does. It provides that if China were to take such action against Taiwan 
as to trigger the section 3(c) of the Taiwan Relations Act that we 
would take two actions against their top officials.

                              {time}  1500

  First, we would name and shame. We would publicize their assets, 
wherever they may be in the world. Then, second, we would deny them and 
their immediate families access to the American financial system.
  It is time for China to give up the idea of intimidating the people 
of Taiwan and to recognize that America's response will involve the 
military, will involve broad-based economic response, and will involve 
very personal economic disclosures and response.
  That is the way to prevent what could cause an incredible disruption 
in the world and even possibly a world war. That is why Beijing needs 
to look at this bill and everything else that America would do and 
decide to put aside the idea of invading or blockading Taiwan.
  Mr. Speaker, I again urge my colleagues to support this important 
legislation and yield back the balance of my time.
  Mrs. KIM of California. Mr. Speaker, I thank my colleague, the 
gentleman from California, for his support of this very important bill, 
and I thank Mr. Hill for his outstanding leadership and for introducing 
this thoughtful legislation.
  Mr. Speaker, I urge my colleagues to support H.R. 554, and I yield 
back the balance of my time.
  Mr. SMITH of New Jersey. Mr. Speaker, I rise in strong support of the 
Taiwan Conflict Deterrence Act, H.R. 554, first and foremost, because 
it underscores support for Taiwan, a true democracy and bastion of 
freedom in the Chinese-speaking world, and an example to which the 
repressed people of China can aspire.
  Secondly, however, this bill would illuminate the extent to which the 
Chinese Communist Party, centered around Xi Jinping, is a gang of 
thieves who have exploited the Chinese people struggling to make ends 
meet in a ``9-9-6 economy--working 9 a.m. to 9 p.m. six days a week for 
a pittance with no job security.
  All while Xi Jinping himself has amassed a Putin-like fortune.
  We know that in 2012, when he was on the cusp of assuming supreme 
power, he had already squirreled away corporate investments worth 
approximately $375 million.
  Since then, it is estimated that his wealth has grown by leaps and 
bounds.
  No wonder then that the Chinese government has lobbied extensively 
against the release of a long-delayed report by the Director of 
National Intelligence on the corrupt wealth of Xi and his Politburo 
cronies. They know that revelation of their ill-gotten gains undermines 
the Communist Party's so-called claims to revolutionary legitimacy.
  The report that this bill calls for would also strip away any 
vestiges of Xi Jinping's claim to being an anti-corruption reformer. He 
never was. When he went against party rival Bo Xilai at the beginning 
of his regime, he was using ``anti-corruption'' as a weapon.
  Sadly, many in America at the time called him a ``rule-of-law'' 
reformer. That was completely wrong. Xi never believed in rule-of-law; 
it was always ``rule-by-law''--the dictates of the Chinese Communist 
Party and Xi Jinping cloaked in law that was selectively enforced.
  For all these reasons, I urge my colleagues to support this bill.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from California (Mrs. Kim) that the House suspend the rules 
and pass the bill, H.R. 554, as amended.
  The question was taken; and (two-thirds being in the affirmative) the

[[Page H5046]]

rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________