[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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