[Congressional Record Volume 170, Number 139 (Monday, September 9, 2024)]
[House]
[Pages H5071-H5074]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ECONOMIC ESPIONAGE PREVENTION ACT
Mr. BARR. Mr. Speaker, I move to suspend the rules and pass the bill
(H.R. 8361) to impose sanctions with respect to economic or industrial
espionage by foreign adversarial companies, and for other purposes, as
amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 8361
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Economic Espionage
Prevention Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) On March 14, 2024, the Department of State notified
Congress of the following:
(A) People's Republic of China exports of semiconductors to
Russia have increased substantially since Russia's full-scale
invasion of Ukraine.
(B) In the second half of 2023, China exported between
$25,000,000 and $50,000,000 in additional semiconductors to
Russia every month relative to pre-invasion levels.
(C) During the same period, China also exported between
$50,000,000 and $100,000,000 in additional exports to Russia
every month to known transshipment hubs.
(D) These exports include both Chinese and United States-
branded semiconductors (integrated circuits), according to
analysis of commercially available trade data by the Bureau
of Industry and Security of the Department of Commerce, and
are almost certainly supporting Russia's military
capabilities based on Ukrainian analysis of recovered Russian
weapons.
(E) Because of the prevalence of United States
manufacturing equipment in global semiconductor supply
chains, nearly all chips produced worldwide, including in the
People's Republic of China, are subject to United States
export controls if destined for Russia or Belarus.
(F) All advanced semiconductors described on the Commerce
Control List have been subject to a license requirement if
destined to an entity in Russia since its further invasion of
Ukraine.
(2) On April 3, 2024, Deputy Secretary of State, Kurt
Campbell, said ``I think we have assessed, over the course of
the last couple of months that Russia has almost completely
reconstituted militarily. And after the initial setbacks on
the battlefield delivered to them by a brave and hearty group
in Ukraine, with the support of China in particular, dual use
capabilities and a variety of other efforts, industrial and
commercial, Russia has retooled and now poses a threat to
Ukraine. . .But not just to Ukraine, its new found
capabilities pose a longer term challenge to stability in
Europe and threatens NATO allies.''.
SEC. 3. REPORT.
(a) In General.--Not later than 90 days after the date of
the enactment of this Act, the Secretary of State, in
coordination with the heads of relevant Federal departments
and agencies, as appropriate, shall submit to the appropriate
congressional committees, a written report that contains the
following:
(1) An analysis and description of the extent to which any
foreign person who is a citizen of the People's Republic of
China or an entity organized under the laws of the People's
Republic of China, or any foreign person or entity controlled
by or operating at the direction of the Government of the
People's Republic of China--
(A) is knowingly a material source of critical components
necessary for the manufacture of weapons, vehicles, and other
military equipment by the defense industrial base of the
Russian Federation;
(B) has knowingly delivered critical components to or
entered into any agreement relating to the sale or delivery
of critical components with any entity operating in the
defense or intelligence sectors of the Government of the
Russian Federation;
(C) has knowingly delivered critical components to or
entered into any agreement relating to the sale or delivery
of critical components with any country or entity with which
the defense or intelligence sectors of the Government of
Russian Federation are cooperating in support of Russia's war
against Ukraine; or
(D) has knowingly delivered critical components to or
entered into any agreement relating to the sale or delivery
of critical components with a foreign person that knowingly
and directly provides these components to the defense or
intelligence sectors of the Government of the Russian
Federation.
(2) The extent to which--
(A) any foreign person that is a citizen of the People's
Republic of China or an entity organized under the laws of
the People's Republic of China has knowingly engaged, on or
after the date of the enactment of this Act, in transactions
with a person that is part of, or operates on behalf of, the
defense or intelligence sectors of the Government of the
Russian Federation;
(B) any foreign person identified pursuant to subparagraph
(A) has engaged in transactions which would constitute a
significant transaction with persons that have been
sanctioned for being part of, or operating on behalf of, the
defense or intelligence sectors of the Government of the
Russian Federation; or
(C) any foreign person identified pursuant to subparagraph
(A) has been subjected to sanctions imposed pursuant to
sections 231 and 235 of the Countering America's Adversaries
Through Sanctions Act (22 U.S.C. 9525 and 9529).
(b) Form and Availability.--
(1) Form.--The report required by subsection (a) shall be
submitted in unclassified form, but may include a classified
annex.
(2) Availability.--The unclassified portion of the report
required by subsection (a) may also be made available to the
public.
SEC. 4. IMPOSITION OF SANCTIONS WITH RESPECT TO ECONOMIC OR
INDUSTRIAL ESPIONAGE BY FOREIGN ADVERSARY
ENTITIES.
(a) In General.--On and after the date that is 30 days
after the date of the enactment of this Act, the President
(a) may impose the sanctions described in subsection (c)
against any of the foreign persons described in subsection
(b).
(b) Foreign Persons Described.--A foreign person is
described in this subsection if the President determines on
or after the date of the enactment of this Act that the
person is a foreign adversary entity that knowingly engages
in--
(1) economic or industrial espionage with respect to trade
secrets or proprietary information owned by United States
persons;
(2) the provision of material support or services to a
foreign adversaries' military, intelligence, or other
national security entities; or
(3) the violation of United States export control laws.
(c) Sanctions Described.--The sanctions that may be imposed
with respect to a foreign person under subsection (b) are the
following:
(1) Property blocking.--The exercise of all powers granted
to the President by the International Emergency Economic
Powers Act (50 U.S.C. 1701 et seq.) to the extent necessary
to block and prohibit all transactions in property and
interests in property of the foreign person if such property
and interests in property are in the United States, come
within the United States, or are or come within the
possession or control of a United States person.
[[Page H5072]]
(2) Ineligibility for visas, admission, or parole.--
(A) Visas, admission, or parole.--An alien described in
subsection (b) is--
(i) inadmissible to the United States;
(ii) ineligible to receive a visa or other documentation to
enter the United States; and
(iii) otherwise ineligible to be admitted or paroled into
the United States or to receive any other benefit under the
Immigration and Nationality Act (8 U.S.C. 1101 et seq.).
(B) Current visas revoked.--
(i) In general.--An alien described in subsection (b) is
subject to revocation of any visa or other entry
documentation regardless of when the visa or other entry
documentation is or was issued.
(ii) Immediate effect.--A revocation under clause (i) shall
take effect immediately and automatically cancel any other
valid visa or entry documentation that is in the alien's
possession.
(d) Exceptions.--
(1) Exception for intelligence activities.--Sanctions under
this section shall not apply to any activity subject to the
reporting requirements under title V of the National Security
Act of 1947 (50 U.S.C. 3091 et seq.) or any authorized
intelligence activities of the United States.
(2) Exception to comply with international obligations.--
Sanctions under subsection (c)(2) shall not apply with
respect to the admission of an alien if admitting or paroling
the alien into the United States is necessary to permit the
United States to comply with--
(A) 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
(B) other applicable international obligations.
(3) Exception to carry out or assist law enforcement
activities.--Sanctions under subsection (c)(2) shall not
apply with respect to an alien if admitting or paroling the
alien into the United States is necessary to carry out or
assist law enforcement activity in the United States.
(e) Waiver.--The President may waive the application of
sanctions under this section with respect to a foreign person
for renewable periods of not more than 180 days each if the
President determines and submits to the appropriate
congressional committees a report that contains a
determination of the President that such a waiver is in the
national security interests of the United States.
(f) Implementation; Penalties.--
(1) Implementation.--The President may exercise the
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 the extent necessary to carry out
this section.
(2) Penalties.--A person that violates, attempts to
violate, conspires to violate, or causes a violation of
subsection (a) or any regulation, license, or order issued to
carry out that subsection 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.
(3) Procedures and guidelines for sanctions.--The President
shall establish procedures and guidelines for the
implementation and enforcement of sanctions imposed under
this section.
(4) Annual report.--
(A) Unless the exception in subparagraph (B) applies, not
later than one year after the date of the enactment of this
Act, and for each of the 5 years thereafter, the President
shall submit to the appropriate congressional committees a
report on any notable developments regarding economic or
industrial espionage activities by foreign persons.
(B) The President shall not be required to submit the
annual report described by subparagraph (A) if the President
has imposed sanctions as authorized under this section within
the previous calendar year.
(g) Rule of Construction.--For purposes of this section, a
transaction shall not be construed to include participation
in an international standards-setting body or the activities
of such a body.
SEC. 5. CLARIFYING AMENDMENTS.
Section 203 of the International Emergency Economic Powers
Act (50 U.S.C. 1702) is amended--
(1) in subsection (b)--
(A) in the matter preceding paragraph (1), by striking ``,
directly or indirectly'';
(B) in paragraph (3)--
(i) by striking ``including but not limited to'' and all
that follows through ``news wire feeds.'' and inserting
``except to the extent that the President determines that
such imports and exports would seriously impair his ability
to deal with any national emergency declared under section
202.''; and
(ii) by striking ``under section 5 of the Export
Administration Act of 1979, or under section 6 of such Act''
and inserting ``under other statutory or regulatory export
control authorities''; and
(C) in paragraph (4), by inserting ``, except to the extent
that the President determines that such imports and exports
would seriously impair the ability to deal with any national
emergency declared under section 202'' before the period at
the end; and
(2) by adding at the end the following:
``(d) Rules of Construction Relating to Sensitive and
Personal Data.--The communication, the importation to a
country, or the exportation from a country, directly or
indirectly, whether commercial or otherwise, of bulk
sensitive personal data or of source code used in a connected
software application may not be construed to constitute--
``(1) a `postal, telegraphic, telephonic, or other personal
communication', for purposes of subsection (b)(1); or
``(2) an importation from a country, or an exportation to a
country, of `information or informational materials', for
purposes of subsection (b)(3).''.
SEC. 6. DEFINITIONS.
In this Act:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Foreign Affairs of the House of
Representatives; and
(B) the Committee on Foreign Relations of the Senate.
(2) Economic or industrial espionage.--The term ``economic
or industrial espionage'' has the meaning given that term in
section 1637(d) of the Carl Levin and Howard P. ``Buck''
McKeon National Defense Authorization Act for Fiscal Year
2015.
(3) Foreign person.--The term ``foreign person'' means any
person that is not a United States person.
(4) Knowingly.--The term ``knowingly'', with respect to
conduct, a circumstance, or a result, means that a person has
actual knowledge, or should have known, of the conduct, the
circumstance, or the result.
(5) Own, proprietary information, and trade secret.--The
terms ``own'', ``proprietary information'', and ``trade
secret'' have the meanings given those terms in section
1637(d) of the Carl Levin and Howard P. ``Buck'' McKeon
National Defense Authorization Act for Fiscal Year 2015 (50
U.S.C. 1708(d)).
(6) Person.--The term ``person'' means an individual or
entity.
(7) United states person.--The term ``United States
person'' means--
(A) a United States citizen or an alien lawfully admitted
for permanent residence to the United States; or
(B) an entity organized under the laws of the United States
or any jurisdiction within the United States, including a
foreign branch of such an entity.
(8) Foreign adversary.--The term ``foreign adversary''
means the countries listed in section 7.4 of title 15, Code
of Federal Regulations.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Kentucky (Mr. Barr) and the gentleman from New York (Mr. Meeks) each
will control 20 minutes.
The Chair recognizes the gentleman from Kentucky.
General Leave
Mr. BARR. 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 measure.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Kentucky?
There was no objection.
Mr. BARR. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in strong support of H.R. 8361, the Economic
Espionage Prevention Act, introduced by my colleague and friend from
Georgia, Mr. McCormick.
Today, our adversaries are working more closely than ever before. The
Chinese Communist Party is providing massive industrial and economic
support to Russia's renewed invasion of Ukraine.
In fact, our State Department assesses that in the second half of
2023, China supported the transfer of nearly $300 million worth of
semiconductors to Russia, including for use in missiles and drones.
Deputy Secretary of State Kurt Campbell said: ``I think we have
assessed over the course of the last couple of months that Russia has
almost completely reconstituted militarily . . . with the support of
China in particular.''
The Economic Espionage Prevention Act is therefore essential to
changing the nature of the battlefield in Ukraine. This bill addresses
cooperation between the CCP and Russia's defense industrial base by
providing for sanctions against Chinese and Iranian individuals and
entities that violate U.S. export control laws, engage in economic or
industrial espionage, or support the Russian defense industrial base.
The bill also requires the State Department to issue a report
identifying Chinese individuals and entities that are supporting the
Russian defense industrial base.
The United States and our allies cannot stand for China's decisive
support
[[Page H5073]]
of Russia's illegal war of aggression against Ukraine. The Chinese
companies providing that support must be subjected to the full weight
of our sanctions regime.
Mr. Speaker, I urge my colleagues to support this bipartisan bill,
and I reserve the balance of my time.
House of Representatives,
Committee on the Judiciary,
Washington, DC, September 3, 2024.
Hon. Michael McCaul,
Chairman, Committee on Foreign Affairs,
House of Representatives, Washington, DC.
Dear Chairman McCaul: I write regarding H.R. 8361, the
Economic Espionage Prevention Act. Provisions of this bill
fall within the Judiciary Committee's rule X jurisdiction,
and I appreciate that you consulted with us on those
provisions. The Judiciary Committee agrees that it shall be
discharged from further consideration of the bill so that it
may proceed expeditiously to the House floor.
The Committee takes this action with the understanding that
forgoing further consideration of this measure does not in
any way alter the Committee's jurisdiction or waive any
future jurisdictional claim over these provisions or their
subject matter. We also reserve the right to seek appointment
of an appropriate number of conferees in the event of a
conference with the Senate involving this measure or similar
legislation.
I ask that you please include this letter in your
committee's report to accompany this legislation or insert
this letter in the Congressional Record during consideration
of H.R. 8361 on the House floor. I appreciate the cooperative
manner in which our committees have worked on this matter,
and I look forward to working collaboratively in the future
on matters of shared jurisdiction. Thank you for your
attention to this matter.
Sincerely,
Jim Jordan,
Chairman.
____
House of Representatives,
Committee on Foreign Affairs,
Washington, DC, September 6, 2024.
Hon. Jim Jordan,
Chairman, Committee on the Judiciary,
Washington, DC.
Dear Chairman Jordan: Thank you for consulting with the
Foreign Affairs Committee and agreeing to be discharged from
further consideration of H.R. 8361, the Economic Espionage
Prevention Act, so that the measure may proceed expeditiously
to the House floor.
I agree that your forgoing further action on this measure
does not in any way diminish or alter the jurisdiction of
your committee, or prejudice its jurisdictional prerogatives
on this measure or similar legislation in the future. I would
support your effort to seek appointment of an appropriate
number of conferees from your committee to any House-Senate
conference on this legislation.
I will seek to place our letters on this bill into the
Congressional Record during floor consideration. I appreciate
your cooperation regarding this legislation and look forward
to continuing to work together as this measure moves through
the legislative process.
Sincerely,
Michael T. McCaul,
Chairman.
Mr. MEEKS. Mr. Speaker, I rise in strong support of H.R. 8361, as
amended, and I yield myself such time as I may consume.
Mr. Speaker, 2\1/2\ years ago, we saw an unprovoked and brutal
invasion of Ukraine by Russia, an act that has destabilized Europe and
challenged the principles of sovereignty and self-determination. This
blatant aggression is a direct attack on the international order that
has kept the peace for decades.
Though Russia's illegal behavior is uniquely indefensible, countries
such as China that have aggressively done business with the Russian
military-industrial defense base are certainly not blameless.
The United States Government, including the House Committee on
Foreign Affairs in a bipartisan manner, has engaged in extensive
diplomacy to discourage countries from providing financial and material
support for the Russian invasion.
The Biden-Harris administration has also used economic statecraft,
including expansive export controls, to prevent key dual-use
electronics items from reaching Moscow. Full blocking sanctions are a
particularly formidable economic weapon, and the Biden-Harris
administration has begun to use this part of the arsenal.
Bipartisan support for this legislation affirms that position, and
financial sanctions must be on the table.
Finally, by imposing sanctions on the PRC and other entities that are
fueling Russia's military machine, we send a clear message: We will not
stand idly by while Ukraine's sovereignty is trampled.
This bill underscores the importance of unity among nations in
opposing tyranny and supporting democracy.
Mr. Speaker, I encourage my colleagues to support this bill, and I
reserve the balance of my time.
Mr. BARR. Mr. Speaker, I yield 5 minutes to the gentleman from
Georgia (Mr. McCormick), a member of the Committee on Foreign Affairs
and the author of this bill.
Mr. McCORMICK. Mr. Speaker, since illegally invading Ukraine, the
Russian Federation has become reliant on the People's Republic of China
for the supply of semiconductors and other critical dual-use
technologies.
The State Department notified Congress this March that the PRC
exports of semiconductors significantly increased last year compared to
the pre-invasion levels.
These semiconductors are critical to aspects of the Russian war
effort, including electronic warfare, command and control, and
targeting. These components allow Russia to terrorize Ukrainian
civilians with ballistic missile strikes at will.
The prevalence of U.S. manufacturing equipment in global
semiconductor production means nearly all are subject to U.S. export
controls if destined for Russia or Belarus.
My bill seeks to reduce Russia's access to these semiconductors by
authorizing sanctions on foreign countries and adversaries that
materially support Russia's military and intelligence services, violate
U.S. export laws, and steal U.S. intellectual property.
It further requires a report on whether China is providing
significant support to Russia's military and updates existing law to
provide greater flexibility to pursue sanctions against China and other
foreign adversaries if they violate these export controls.
The PRC may publicly claim that they do not provide material support
to the Russian invasion of Ukraine, but their continued provision of
dual-use technologies with military applications demonstrates
otherwise.
Cutting off the supply of semiconductors will seriously hamper the
Russian war effort and show the world that we will not allow our
adversaries to work together in destroying sovereign nations and
undermining the international system.
I thank Chairman McCaul, Ranking Member Meeks, and my bipartisan
colleagues on the Committee on Foreign Affairs for supporting the bill
before us today. I urge my colleagues to support H.R. 8361.
Mr. MEEKS. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, H.R. 8361, as amended, is a valuable bill that grants
the administration important authorities with necessary flexibility to
sanction the PRC and other foreign businesses in league with the
Russian defense industry base. I think this is something we all agree
upon, and I urge all of my colleagues to vote ``yea'' on this
legislation.
Mr. Speaker, I yield back the balance of my time.
Mr. BARR. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, I thank Representative McCormick for his bill and for
his service, as well as Chairman McCaul, Ranking Member Meeks, and
Judiciary Committee Chairman Jim Jordan for working to bring this
bipartisan bill to the floor to ensure that we address China's support
for Russia's defense industrial base.
There should be no doubt that the Chinese Communists are aiding and
abetting Putin in his illegal aggression against Ukraine. General
Secretary Xi and Putin have described the bilateral alliance between
the PRC and Russia as a no-limits relationship. The material support
that China is providing Russia with the semiconductors is evidence of
that.
Mr. Speaker, that is why I urge all Members to support H.R. 8361, and
I yield back the balance of my time.
{time} 1800
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Kentucky (Mr. Barr) that the House suspend the rules and
pass the bill, H.R. 8361, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
[[Page H5074]]
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