[Congressional Record Volume 171, Number 165 (Tuesday, October 7, 2025)]
[Senate]
[Pages S6983-S6989]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 3926. Mr. CORNYN (for himself, Ms. Cortez Masto, and Mr. Sullivan)
submitted an amendment intended to be proposed by him to the bill S.
2296, to authorize appropriations for fiscal year 2026 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 division A, add the following:
[[Page S6984]]
TITLE XVII--FIGHT CHINA ACT OF 2025
SEC. 1701. SHORT TITLE.
This title may be cited as the ``Foreign Investment
Guardrails to Help Thwart China Act of 2025'' or ``FIGHT
China Act of 2025''.
SEC. 1702. SECRETARY DEFINED.
Except as otherwise provided, in this title, the term
``Secretary'' means the Secretary of the Treasury.
SEC. 1703. SEVERABILITY.
If any provision of this title, or the application thereof,
is held invalid, the validity of the remainder of this title
and the application of such provision to other persons and
circumstances shall not be affected thereby.
SEC. 1704. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There is authorized to be appropriated
$150,000,000 to the Department of the Treasury, out of which
amounts may be transferred to the Department of Commerce to
jointly conduct outreach to industry and persons affected by
this title, for each of the first two fiscal years beginning
on or after the date of the enactment of this Act, to carry
out this title.
(b) Hiring Authority.--
(1) By the president.--The President may appoint, without
regard to the provisions of sections 3309 through 3318 of
title 5, United States Code, not more than 15 individuals
directly to positions in the competitive service (as defined
in section 2102 of that title) to carry out this title.
(2) By agencies.--The Secretary and the Secretary of
Commerce may appoint, without regard to the provisions of
sections 3309 through 3318 of title 5, United States Code,
individuals directly to positions in the competitive service
(as defined in section 2102 of that title) of the Department
of the Treasury and the Department of Commerce, respectively,
to carry out this title.
SEC. 1705. TERMINATION.
This title shall cease to have any force or effect on the
date on which the Secretary of Commerce revises section 791.4
of title 15, Code of Federal Regulations, to remove the
People's Republic of China from the list of foreign
adversaries contained in such section.
Subtitle A--Imposition of Sanctions
SEC. 1711. IMPOSITION OF SANCTIONS.
(a) In General.--The President may impose the sanctions
described in subsection (b) with respect to any foreign
person determined by the Secretary, in consultation with the
Secretary of State, to be a covered foreign person.
(b) Sanctions Described.--The President may exercise all of
the powers granted to the President under 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 a foreign person that
is determined to be a covered foreign person pursuant to
subsection (a) 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.
(c) Penalties.--The penalties provided for in subsections
(b) and (c) of section 206 of the International Emergency
Economic Powers Act (50 U.S.C. 1705) shall apply to any
person who violates, attempts to violate, conspires to
violate, or causes a violation of any prohibition of this
section, or an order or regulation prescribed under this
section, to the same extent that such penalties apply to a
person that commits an unlawful act described in section
206(a) of such Act (50 U.S.C. 1705(a)).
(d) Exception for Intelligence and Law Enforcement
Activities.--Sanctions under this section shall not apply
with respect 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.
(e) Exception for United States Government Activities.--
Nothing in this section shall prohibit transactions for the
conduct of the official business of the Federal Government by
employees, grantees, or contractors thereof.
(f) Report to Congress.--Not later than 365 days after the
date of the enactment of this Act, and annually thereafter
for 7 years, the Secretary shall submit to the appropriate
congressional committees a report that--
(1) states whether each foreign person on the Non-SDN
Chinese Military-Industrial Complex Companies List is a
covered foreign person; and
(2) shall be submitted in unclassified form, but may
include a classified annex.
(g) Consideration of Certain Information in Imposing
Sanctions.--In determining whether a foreign person is a
covered foreign person, the President--
(1) may consider credible information obtained by other
countries, nongovernmental organizations, or the appropriate
congressional committees that relates to the foreign person;
and
(2) may consider any other information that the Secretary
deems relevant.
(h) Administrative Provisions.--The President may exercise
all authorities provided under sections 203 and 205 of the
International Emergency Economic Powers Act (50 U.S.C. 1702
and 1704) to carry out this section.
(i) Delegation.--The President shall delegate the
authorities granted by this section to the Secretary.
SEC. 1712. DEFINITIONS.
In this subtitle:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Financial Services and the Committee
on Foreign Affairs of the House of Representatives; and
(B) the Committee on Banking, Housing, and Urban Affairs
and the Committee on Foreign Relations of the Senate.
(2) Country of concern.--The term ``country of concern''--
(A) means the People's Republic of China; and
(B) includes the Hong Kong Special Administrative Region
and the Macau Special Administrative Region.
(3) Covered foreign person.--The term ``covered foreign
person'' means a foreign person--
(A)(i) that is incorporated in, has a principal place of
business in, or is organized under the laws of a country of
concern;
(ii) the equity securities of which are primarily traded in
the ordinary course of business on one or more exchanges in a
country of concern;
(iii) that is a member of the Central Committee of the
Chinese Communist Party;
(iv) that is the state or the government of a country of
concern, as well as any political subdivision, agency, or
instrumentality thereof;
(v) that is subject to the direction or control of any
entity described in clause (i), (ii), (iii), or (iv); or
(vi) that is owned in the aggregate, directly or
indirectly, 50 percent or more by an entity or a group of
entities described in clause (i), (ii), (iii), or (iv); and
(B) that knowingly engaged in significant operations in the
defense and related materiel sector or the surveillance
technology sector of the economy of a country of concern.
(4) Foreign person.--The term ``foreign person'' means a
person, country, state, or government (and any political
subdivision, agency, or instrumentality thereof) that is not
a United States person.
(5) Non-SDN chinese military-industrial complex companies
list.--The term ``Non-SDN Chinese Military-Industrial Complex
Companies List'' means the list maintained by the Office of
Foreign Assets Control of the Department of the Treasury
under Executive Order 13959, as amended by Executive Order
14032 (50 U.S.C. 1701 note; relating to addressing the threat
from securities investments that finance certain companies of
the People's Republic of China), or any successor order.
(6) United states person.--The term ``United States
person'' means--
(A) any United States citizen or an alien lawfully admitted
for permanent residence to the United States;
(B) an entity organized under the laws of the United States
or of any jurisdiction within the United States (including
any foreign branch of such an entity); or
(C) any person in the United States.
Subtitle B--Prohibition and Notification on Investments Relating to
Covered National Security Transactions
SEC. 1721. PROHIBITION AND NOTIFICATION ON INVESTMENTS
RELATING TO COVERED NATIONAL SECURITY
TRANSACTIONS.
The Defense Production Act of 1950 (50 U.S.C. 4501 et seq.)
is amended by adding at the end the following:
``TITLE VIII--PROHIBITION AND NOTIFICATION ON INVESTMENTS RELATING TO
COVERED NATIONAL SECURITY TRANSACTIONS
``SEC. 801. PROHIBITION ON INVESTMENTS.
``(a) In General.--The Secretary may prohibit, in
accordance with regulations issued under subsection (e), a
United States person from knowingly engaging in a covered
national security transaction in a prohibited technology.
``(b) Evasion.--Any transaction by a United States person
or within the United States that evades or avoids, has the
purpose of evading or avoiding, causes a violation of, or
attempts to violate the prohibition set forth in subsection
(a) is prohibited.
``(c) Waiver.--Subject to subsection (d), the Secretary is
authorized to exempt from the prohibition set forth in
subsection (a) any activity determined by the President, in
consultation with the Secretary, the Secretary of Commerce
and, as appropriate, the heads of other relevant Federal
departments and agencies, to be in the national interest of
the United States.
``(d) Congressional Notification.--The Secretary shall--
``(1) notify the appropriate congressional committees not
later than 5 business days after issuing a waiver under
subsection (c); and
``(2) include in such notification an identification of the
national interest justifying the use of the waiver.
``(e) Regulations.--
``(1) In general.--The Secretary, in consultation with the
Secretary of Commerce and, as appropriate, the heads of other
relevant Federal departments and agencies, may issue
regulations to carry out this section in accordance with
subchapter II of chapter 5 and chapter 7 of title 5, United
States Code (commonly known as `Administrative Procedure
Act').
``(2) Non-binding feedback.--
``(A) In general.--The regulations issued under paragraph
(1) shall include a process
[[Page S6985]]
under which a person can request non-binding feedback on a
confidential basis as to whether a transaction would
constitute a covered national security transaction in a
prohibited technology.
``(B) Authority to limit frivolous feedback requests.--In
establishing the process required by subparagraph (A), the
Secretary may prescribe limitations on requests for feedback
identified as frivolous for purposes of this subsection.
``(3) Notice and opportunity to cure.--
``(A) In general.--The regulations issued under paragraph
(1) shall account for whether a United States person has
self-identified a violation of the prohibition set forth in
subsection (a) in determining the legal consequences of that
violation.
``(B) Self-disclosure letters.--The regulations issued
under paragraph (1) shall dictate the form and content of a
letter of self-disclosure, which shall include relevant facts
about the violation, why the United States person believes
its activity to have violated the prohibition set forth in
subsection (a), and a proposal for mitigation of the harm of
such action.
``(4) Public notice and comment.--The regulations issued
under paragraph (1) shall be subject to public notice and
comment.
``(5) Low-burden regulations.--In issuing regulations under
paragraph (1), the Secretary shall balance the priority of
protecting the national security interest of the United
States while, to the extent practicable--
``(A) minimizing the cost and complexity of compliance for
affected parties, including the duplication of reporting
requirements under current regulations;
``(B) adopting the least burdensome alternative that
achieves regulatory objectives; and
``(C) prioritizing transparency and stakeholder involvement
in the process of issuing the rules.
``(6) Penalties.--
``(A) In general.--The regulations issued under paragraph
(1) shall provide for the imposition of civil penalties
described in subparagraph (B) for violations of the
prohibition set forth in subsection (a).
``(B) Penalties described.--
``(i) Unlawful acts.--It shall be unlawful for a person to
violate, attempt to violate, conspire to violate, or cause a
violation of any license, order, regulation, notification
requirement, or prohibition issued under this section.
``(ii) Civil penalty.--The Secretary may impose a civil
penalty on any person who commits an unlawful act described
in clause (i) in an amount not to exceed the greater of--
``(I) $250,000; or
``(II) an amount that is twice the amount of the
transaction that is the basis of the violation with respect
to which the penalty is imposed.
``(iii) Divestment.--The Secretary may compel the
divestment of a covered national security transaction in a
prohibited technology determined to be in violation of this
title.
``(iv) Relief.--The President may direct the Attorney
General of the United States to seek appropriate relief,
including divestment relief, in the district courts of the
United States, in order to implement and enforce this title.
``(7) Burden of proof.--In accordance with section 556(d)
of title 5, United States Code, in an enforcement action for
a violation of the prohibition set forth in subsection (a),
the burden of proof shall be upon the Secretary.
``SEC. 802. NOTIFICATION ON INVESTMENTS.
``(a) Mandatory Notification.--Not later than 450 days
after the date of the enactment of this title, the Secretary
shall issue regulations prescribed in accordance with
subsection (b), to require a United States person that
engages in a covered national security transaction in a
prohibited technology (unless the Secretary has exercised the
authority provided by section 801(a) to prohibit knowingly
engaging in such covered national security transaction) or a
notifiable technology to submit to the Secretary a written
notification of the transaction not later than 30 days after
the completion date of the transaction.
``(b) Regulations.--
``(1) In general.--Not later than 450 days after the date
of the enactment of this title, the Secretary, in
consultation with the Secretary of Commerce and, as
appropriate, the heads of other relevant Federal departments
and agencies, shall issue regulations to carry out this
section in accordance with subchapter II of chapter 5 and
chapter 7 of title 5, United States Code (commonly known as
`Administrative Procedure Act').
``(2) Public notice and comment.--The regulations issued
under paragraph (1) shall be subject to public notice and
comment.
``(3) Low-burden regulations.--In issuing regulations under
paragraph (1), the Secretary shall balance the priority of
protecting the national security interest of the United
States while, to the extent practicable--
``(A) minimizing the cost and complexity of compliance for
affected parties, including the duplication of reporting
requirements under current regulation;
``(B) adopting the least burdensome alternative that
achieves regulatory objectives; and
``(C) prioritizing transparency and stakeholder involvement
in the process of issuing the rules.
``(4) Penalties.--
``(A) In general.--The regulations issued under paragraph
(1) shall provide for the imposition of civil penalties
described in subparagraph (B) for violations of the
notification requirement set forth in subsection (a).
``(B) Penalties described.--
``(i) Unlawful acts.--It shall be unlawful for a person to
violate, attempt to violate, conspire to violate, or cause a
violation of any license, order, regulation, notification
requirement, or prohibition issued under this section.
``(ii) Civil penalty.--A civil penalty may be imposed on
any person who commits an unlawful act described in clause
(i) in an amount not to exceed the greater of--
``(I) $250,000; or
``(II) an amount that is twice the amount of the
transaction that is the basis of the violation with respect
to which the penalty is imposed.
``(5) Burden of proof.--In accordance with section 556(d)
of title 5, United States Code, in an enforcement action for
a violation of the prohibition set forth in subsection (a),
the burden of proof shall be upon the Secretary.
``(6) Completeness of notification.--
``(A) In general.--The Secretary shall, upon receipt of a
notification under subsection (a), and in consultation with
the Secretary of Commerce, promptly inspect the notification
for completeness.
``(B) Incomplete notifications.--If a notification
submitted under subsection (a) is incomplete, the Secretary
shall 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.
``(7) Identification of non-notified activity.--The
Secretary, in coordination with the Secretary of Commerce,
shall establish a process to identify covered national
security transactions in a prohibited technology or a
notifiable technology for which--
``(A) a notification is not submitted to the Secretary
under subsection (a); and
``(B) information is reasonably available.
``(c) Confidentiality of Information.--
``(1) In general.--Except as provided in paragraph (2), any
information or documentary material filed with the Secretary
pursuant to this section shall be exempt from disclosure
under section 552(b)(3) of title 5, United States Code, and
no such information or documentary material may be made
public by any government agency or Member of Congress.
``(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 provided to Congress or any of the
appropriate congressional committees.
``(C) Information important to the national security
analysis or actions of the Secretary to any domestic
governmental entity, or to any foreign governmental entity of
an ally or partner of the United States, under the direction
and authorization of the Secretary, 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.
``(E) Information where the disclosure of such information
is determined by the Secretary to be in the national security
interest.
``(d) Inapplicability.--If the Secretary prohibits a
covered national security transaction in a prohibited
technology under section 801, the requirements of this
section shall not apply with respect to the covered national
security transaction.
``SEC. 803. REPORT.
``(a) In General.--Not later than one year after the date
on which the regulations issued under section 801(e) take
effect, and not less frequently than annually thereafter for
7 years, the Secretary, in consultation with the Secretary of
Commerce, shall submit to the appropriate congressional
committees a report that--
``(1) lists all enforcement actions taken subject to the
regulations during the year preceding submission of the
report, which includes, with respect to each such action, a
description of--
``(A) the prohibited technology or notifiable technology;
``(B) the covered national security transaction; and
``(C) the covered foreign person;
``(2) provides an assessment of whether Congress should
amend the definition of the term `prohibited technology' by--
``(A) identifying additional technologies, not currently
listed as a prohibited technology, that the Secretary, in
consultation with the Secretary of Commerce and, as
applicable, the Secretary of Defense, the Secretary of State,
the Secretary of Energy, the Director of National
Intelligence, and the heads of any other relevant Federal
agencies, determines may pose an acute threat to the national
security of the United States if developed or acquired by a
country of concern;
``(B) explaining why each technology identified in
subparagraph (A) may pose an acute threat to the national
security of the United States if developed or acquired by a
country of concern; and
[[Page S6986]]
``(C) recommending the repeal of technologies from the
category of prohibited technology to the extent that the
technologies no longer pose an acute threat to the national
security of the United States if developed or acquired by a
country of concern;
``(3) lists all notifications submitted under section 802
during the year preceding submission of the report and
includes, with respect to each such notification--
``(A) basic information on each party to the covered
national security transaction with respect to which the
notification was submitted; and
``(B) the nature of the covered national security
transaction that was the subject to the notification,
including the elements of the covered national security
transaction that necessitated a notification;
``(4) includes a summary of those notifications,
disaggregated by prohibited technology, notifiable
technology, by covered national security transaction, and by
country of concern;
``(5) provides additional context and information regarding
trends in the prohibited technology, notifiable technology,
the types of covered national security transaction, and the
countries involved in those notifications; and
``(6) assesses the overall impact of those notifications,
including recommendations for--
``(A) expanding existing Federal programs to support the
production or supply of prohibited technologies or notifiable
technologies in the United States, including the potential of
existing authorities to address any related national security
concerns;
``(B) investments needed to enhance prohibited technologies
or notifiable technologies and reduce dependence on countries
of concern regarding those technologies; and
``(C) the continuation, expansion, or modification of the
implementation and administration of this title, including
recommendations with respect to whether the definition of the
term `country of concern' under section 807(2) should be
amended to add or remove countries.
``(b) Consideration of Certain Information.--In preparing
the report pursuant to subsection (a), the Secretary--
``(1) shall consider information provided jointly by the
chairperson and ranking member of any of the appropriate
congressional committees;
``(2) may consider credible information obtained by other
countries and nongovernmental organizations that monitor the
military, surveillance, intelligence, or technology
capabilities of a country of concern; and
``(3) may consider any other information that the Secretary
deems relevant.
``(c) Form of Report.--Each report required by this section
shall be submitted in unclassified form, but may include a
classified annex.
``(d) Testimony Required.--Not later than one year after
the date of the enactment of this title, and annually
thereafter for five years, the Secretary and the Secretary of
Commerce shall each provide to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives testimony
with respect to the national security threats relating to
investments by United States persons in countries of concern
and broader international capital flows.
``(e) Requests by Appropriate Congressional Committees.--
``(1) In general.--After receiving a request that meets the
requirements of paragraph (2) with respect to whether a
technology should be included in the amendments as described
in subsection (a)(2), the Secretary shall, in preparing the
report pursuant to subsection (a)--
``(A) determine if that technology may pose an acute threat
to the national security of the United States if developed or
acquired by a country of concern; and
``(B) include in the report pursuant to subsection (a) an
explanation with respect to that determination that
includes--
``(i) a statement of whether or not the technology, as
determined by the Secretary, may pose an acute threat to the
national security of the United States if developed or
acquired by a country of concern; and
``(ii) if the Secretary determines that--
``(I) the technology may pose an acute threat to the
national security of the United States if developed or
acquired by a country of concern, an explanation for such
determination and a recommendation whether that technology
should be named a prohibited technology or a notifiable
technology; and
``(II) the technology would not pose an acute threat to the
national security of the United States if developed or
acquired by a country of concern, an explanation for such
determination.
``(2) Requirements.--A request under paragraph (1) with
respect to whether a technology may pose an acute threat to
the national security of the United States if developed or
acquired by a country of concern shall be submitted to the
Secretary in writing jointly by the chairperson and ranking
member of one or more of the appropriate congressional
committees.
``SEC. 804. MULTILATERAL ENGAGEMENT AND COORDINATION.
``(a) Authorities.--The Secretary, in coordination with the
Secretary of State, the Secretary of Commerce, and the heads
of other relevant Federal agencies, should--
``(1) conduct bilateral and multilateral engagement with
the governments of countries that are allies and partners of
the United States to promote and increase coordination of
protocols and procedures to facilitate the effective
implementation of and appropriate compliance with the
prohibitions pursuant to this title;
``(2) upon adoption of protocols and procedures described
in paragraph (1), work with those governments to establish
mechanisms for sharing information, including trends, with
respect to such activities; and
``(3) work with and encourage the governments of countries
that are allies and partners of the United States to develop
similar mechanisms of their own, for the exclusive purpose of
preventing the development or acquisition of prohibited
technologies by a country of concern.
``(b) Strategy for Multilateral Engagement and
Coordination.--Not later than 180 days after the date of the
enactment of this title, the Secretary, in consultation with
the Secretary of State, the Secretary of Commerce, and the
heads of other relevant Federal agencies, should--
``(1) develop a strategy to work with the governments of
countries that are allies and partners of the United States
to develop mechanisms that are comparable to the prohibitions
pursuant to this title, for the exclusive purpose of
preventing the development and acquisition of prohibited
technologies by a country of concern; and
``(2) assess opportunities to provide technical assistance
to those countries with respect to the development of those
mechanisms.
``(c) Report.--Not later than one year after the date of
the enactment of this title, and annually thereafter for four
years, the Secretary shall submit to the appropriate
congressional committees a report that includes--
``(1) a discussion of any strategy developed pursuant to
subsection (b)(1), including key tools and objectives for the
development of comparable mechanisms by the governments of
allies and partners of the United States;
``(2) a list of partner and allied countries to target for
cooperation in developing their own prohibitions;
``(3) the status of the strategy's implementation and
outcomes; and
``(4) a description of impediments to the establishment of
comparable mechanisms by governments of allies and partners
of the United States.
``(d) Appropriate Congressional Committees Defined.--In
this section, the term `appropriate congressional committees'
means--
``(1) the Committee on Foreign Relations and the Committee
on Banking, Housing, and Urban Affairs of the Senate; and
``(2) the Committee on Foreign Affairs and the Committee on
Financial Services of the House of Representatives.
``SEC. 805. PUBLIC DATABASE OF COVERED FOREIGN PERSONS.
``(a) In General.--The Secretary, in consultation with the
Secretary of Commerce, may establish a publicly accessible,
non-exhaustive database that identifies covered foreign
persons in a prohibited technology pursuant to this title.
``(b) Confidentiality of Evidence.--The Secretary shall
establish a mechanism for the public, including Congress,
stakeholders, investors, and nongovernmental organizations,
to submit evidence on a confidential basis regarding whether
a foreign person is a covered foreign person in a prohibited
technology and should be included in the database described
in subsection (a), if any.
``(c) Exemption From Disclosure.--
``(1) In general.--Except as provided in paragraph (2), any
information or documentary material filed with the Secretary
pursuant to this section shall be exempt from disclosure
under section 552(b)(3) of title 5, United States Code, and
no such information or documentary material may be made
public (other than the identity of a covered foreign person
in accordance with subsection (b)).
``(2) Exceptions.--Paragraph (1) shall not prohibit the
disclosure of the following:
``(A) Information relevant to any administrative or
judicial action or proceeding.
``(B) Information to Congress or any duly authorized
committee or subcommittee of Congress.
``(C) Information important to the national security
analysis or actions of the Secretary 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 Secretary, 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.
``(d) Rule of Construction.--The database described in
subsection (a), if any, shall not be considered to be an
exhaustive or comprehensive list of covered foreign persons
for the purposes of this title.
``SEC. 806. RULE OF CONSTRUCTION.
``Nothing in this title may be construed to negate the
authority of the President under any authority, process,
regulation, investigation, enforcement measure, or review
provided by or established under any other provision of
Federal law, or any other authority of the President or the
Congress under the Constitution of the United States.
[[Page S6987]]
``SEC. 807. DEFINITIONS.
``In this title:
``(1) Appropriate congressional committees.--Except as
provided by section 804(d), the term `appropriate
congressional committees' means--
``(A) the Committee on Financial Services, the Committee on
Foreign Affairs, the Committee on Energy and Commerce, and
the Committee on Appropriations of the House of
Representatives; and
``(B) the Committee on Banking, Housing, and Urban Affairs
and the Committee on Appropriations of the Senate.
``(2) Country of concern.--The term `country of concern'--
``(A) means the People's Republic of China; and
``(B) includes the Hong Kong Special Administrative Region
and the Macau Special Administrative Region.
``(3) Covered foreign person.--Subject to regulations
prescribed in accordance with this title, the term `covered
foreign person' means a foreign person that--
``(A) is incorporated in, has a principal place of business
in, or is organized under the laws of a country of concern;
``(B) is a member of the Central Committee of the Chinese
Communist Party;
``(C) is subject to the direction or control of a country
of concern, an entity described in subparagraph (A) or (B),
or the state or the government of a country of concern
(including any political subdivision, agency, or
instrumentality thereof); or
``(D) is owned in the aggregate, directly or indirectly, 50
percent or more by a country of concern, an entity described
in subparagraph (A) or (B), or the state or the government of
a country of concern (including any political subdivision,
agency, or instrumentality thereof).
``(4) Covered national security transaction.--
``(A) In general.--Subject to such regulations as may be
issued in accordance with this title, the term `covered
national security transaction' means any activity engaged in
by a United States person that involves--
``(i) the acquisition of an equity interest or contingent
equity interest in a covered foreign person;
``(ii) the provision of a loan or similar debt financing
arrangement to a covered foreign person, where such debt
financing--
``(I) is convertible to an equity interest; or
``(II) affords or will afford the United States person the
right to make management decisions with respect to or on
behalf of a covered foreign person or the right to appoint
members of the board of directors (or equivalent) of the
covered foreign person;
``(iii) the entrance by such United States person into a
joint venture with a covered foreign person;
``(iv) the conversion of a contingent equity interest (or
interest equivalent to a contingent equity interest) or
conversion of debt to an equity interest in a covered foreign
person;
``(v) the acquisition, leasing, or other development of
operations, land, property, or other assets in a country of
concern that will result in, or that the United States person
intends to result in--
``(I) the establishment of a covered foreign person; or
``(II) the engagement of a person of a country of concern
in a prohibited technology where it was not previously
engaged in such prohibited technology;
``(vi) knowingly directing transactions by foreign persons
that the United States person has knowledge at the time of
the transaction would constitute an activity described in
clause (i), (ii), (iii), (iv), or (v), if engaged in by a
United States person; or
``(vii) the acquisition of a limited partner or equivalent
interest in a venture capital fund, private equity fund, fund
of funds, or other pooled investment fund that the United
States person has knowledge at the time of the acquisition,
intends to engage in an activity described in clause (i),
(ii), (iii), (iv), (v), or (vi).
``(B) Exceptions.--Subject to notice and comment
regulations prescribed in consultation with Congress and in
accordance with this title, the term `covered national
security transaction' does not include--
``(i) any transaction the value of which the Secretary
determines is de minimis;
``(ii) any category of transactions that the Secretary
determines is in the national interest of the United States;
``(iii) an investment--
``(I) in a security (as defined in section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a))) that is
traded on an exchange or the over-the-counter market in any
jurisdiction;
``(II) in a security issued by an investment company (as
defined in section 3 of the Investment Company Act of 1940
(15 U.S.C. 80a-3)) that is registered with the Securities and
Exchange Commission;
``(III) made as a limited partner or equivalent in a
venture capital fund, private equity fund, fund of funds, or
other pooled investment fund (other than as described in
subclause (II)) where--
``(aa) the limited partner or equivalent's committed
capital is not more than $2,000,000, aggregated across any
investment and co-investment vehicles of the fund; or
``(bb) the limited partner or equivalent has secured a
binding contractual assurance that its capital in the fund
will not be used to engage in a transaction that would be a
covered national security transaction if engaged in by a
United States person; or
``(IV) in a derivative of a security described under
subclause (I), (II), or (III);
``(iv) any ancillary transaction undertaken by a financial
institution (as defined in section 5312 of title 31, United
States Code);
``(v) the acquisition by a United States person of the
equity or other interest owned or held by a covered foreign
person in an entity or assets located outside of a country of
concern in which the United States person is acquiring the
totality of the interest in the entity held by the covered
foreign person;
``(vi) an intracompany transfer of funds, as defined in
regulations prescribed in accordance with this title, from a
United States parent company to a subsidiary located in a
country of concern or a transaction that, but for this
clause, would be a covered national security transaction
between a United States person and its controlled foreign
person that supports operations that are not covered national
security transactions or that maintains covered national
security transactions that the controlled foreign person was
engaged in prior to January 2, 2025;
``(vii) a transaction secondary to a covered national
security transaction, including--
``(I) contractual arrangements or the procurement of
material inputs for any covered national security transaction
(such as raw materials);
``(II) bank lending;
``(III) the processing, clearing, or sending of payments by
a bank;
``(IV) underwriting services;
``(V) debt rating services;
``(VI) prime brokerage;
``(VII) global custody;
``(VIII) equity research or analysis; or
``(IX) other similar services;
``(viii) any ordinary or administrative business
transaction as may be defined in such regulations; or
``(ix) any transaction completed before the date of the
enactment of this title.
``(C) Ancillary transaction defined.--In this paragraph,
the term `ancillary transaction' means--
``(i) the processing, settling, clearing, or sending of
payments and cash transactions;
``(ii) underwriting services;
``(iii) credit rating services; and
``(iv) other services ordinarily incident to and part of
the provision of financial services, such as opening deposit
accounts, direct custody services, foreign exchange services,
remittances services, and safe deposit services.
``(5) Foreign person.--The term `foreign person' means a
person that is not a United States person.
``(6) Notifiable technology.--
``(A) In general.--The term `notifiable technology' means a
technology with respect to which a covered foreign person--
``(i) designs any advanced integrated circuit that is not
covered under paragraph (8)(A)(iii);
``(ii) fabricates any integrated circuit that is not
covered under paragraph (8)(A)(iv);
``(iii) packages any integrated circuit that is not covered
under paragraph (8)(A)(v); or
``(iv) develops any artificial intelligence system that is
not covered under clause (vii), (viii), (ix), or (xvi) of
paragraph (8)(A), and that is--
``(I) designed to be used for--
``(aa) any military end use (such as for weapons targeting,
target identification, combat simulation, military vehicle or
weapons control, military decision-making, weapons design
(including chemical, biological, radiological, or nuclear
weapons), or combat system logistics and maintenance); or
``(bb) any government intelligence or mass-surveillance end
use (such as through incorporation of features such as mining
text, audio, or video, image recognition, location tracking,
or surreptitious listening devices);
``(II) intended by the covered foreign person or joint
venture to be used for--
``(aa) cybersecurity applications;
``(bb) digital forensics tools;
``(cc) penetration testing tools; or
``(dd) control of robotic systems; or
``(III) trained using a quantity of computing power greater
than 10\23\ computational operations (such as integer or
floating-point operations).
``(B) Updates.--The Secretary, in consultation with
Congress, may prescribe regulations in accordance with this
title to refine the technical parameters of technologies
described in subparagraph (A) as reasonably needed for
national security purposes or to add or remove categories to
or from the list in subparagraph (A).
``(7) Party.--The term `party', with respect to a covered
national security transaction, has the meaning given that
term in regulations prescribed in accordance with this title.
``(8) Prohibited technology.--
``(A) In general.--The term `prohibited technology' means a
technology with respect to which a covered foreign person--
``(i) develops or produces any design automation software
for the design of integrated circuits or advanced packaging;
``(ii) develops or produces any--
``(I) electronic design automation software for the design
of integrated circuits or advanced packaging;
``(II) front-end semiconductor fabrication equipment
designed for the volume fabrication of integrated circuits,
including equipment used in the production stages from a
blank wafer or substrate to a completed wafer or substrate;
or
[[Page S6988]]
``(III) equipment for performing volume advanced packaging;
``(iii) designs any integrated circuit designs that meet or
exceed the specifications set in Export Control
Classification Number (ECCN) 3A090 in Supplement No. 1 to the
Export Administration Regulations, or integrated circuits
designed for operation at or below 4.5 Kelvin;
``(iv) fabricates integrated circuits that are--
``(I) logic integrated circuits using a non-planar
transistor architecture or with a technology node of 16/14
nanometers or less, including fully depleted silicon-on-
insulator (FDSOI) integrated circuits;
``(II) NOT-AND (NAND) memory integrated circuits with 128
layers or more;
``(III) dynamic random-access memory (DRAM) integrated
circuits using a technology node of 18 nanometer half-pitch
or less;
``(IV) integrated circuits manufactured from a gallium-
based compound semiconductor;
``(V) integrated circuits using graphene transistors or
carbon nanotubes; or
``(VI) integrated circuits designed for operation at or
below 4.5 Kelvin;
``(v) packages any integrated circuit using advanced
packaging techniques;
``(vi) develops, designs, or produces any commodity,
material, software, or technology designed exclusively for
use in or with extreme ultraviolet lithography fabrication
equipment;
``(vii) develops, designs, or produces any artificial
intelligence models trained with at least 10\25\ floating
point operations;
``(viii) develops, designs, or produces any artificial
intelligence models that rely upon or utilize advanced
integrated circuits that meet or exceed the specifications
set in Export Control Classification Number (ECCN) 3A090 in
Supplement No. 1 to the Export Administration Regulations;
``(ix) develops, designs, or produces any artificial
intelligence models designed for use by the Government of the
People's Republic of China, its special administrative
regions, or its agencies and instrumentalities;
``(x) develops a quantum computer or produces any critical
components required to produce a quantum computer such as a
dilution refrigerator or two-stage pulse tube cryocooler;
``(xi) develops or produces any quantum sensing platform
designed for, or which the relevant covered foreign person
intends to be used for, any military, government
intelligence, or mass-surveillance end use;
``(xii) develops or produces quantum networks or quantum
communication systems designed for or intended to be used
for--
``(I) networking to scale up the capabilities of quantum
computers, such as for the purposes of breaking or
compromising encryption;
``(II) secure communications, such as quantum key
distribution; or
``(III) any other application that has any military,
government intelligence, or mass-surveillance end use;
``(xiii) develops, designs, or produces materials,
components, avionics, flight control, propulsion, Global
Positioning System (GPS), data relay, and target detection
systems designed for use in hypersonic systems or capable of
sustainable operations above 1,000 degrees Celsius;
``(xiv) develops, installs, sells, or produces any
supercomputer enabled by advanced integrated circuits that
can provide theoretical compute capacity of 100 or more
double-precision (64-bit) petaflops or 200 or more single-
precision (32-bit) petaflops of processing power within a
41,600 cubic foot or smaller envelope;
``(xv) develops, designs, or produces any other
technologies in the advanced semiconductors and
microelectronics sector, the artificial intelligence sector,
the high-performance computing and supercomputing sector, the
hypersonic missiles sector, or the quantum information
science and technology sector that are--
``(I) defense articles or defense services included on the
United States Munitions List set forth in the International
Traffic in Arms Regulations under subchapter M of chapter I
of title 22, Code of Federal Regulations;
``(II) specially designed and prepared nuclear equipment,
parts or components, materials, software, or technologies
covered by part 810 of title 10, Code of Federal Regulations
(relating to assistance to foreign atomic energy activities);
``(III) nuclear facilities, equipment, or materials covered
by part 110 of title 10, Code of Federal Regulations
(relating to export and import of nuclear equipment and
material); or
``(IV) emerging or foundational technologies controlled
pursuant to section 1758 of the Export Control Reform Act of
2018 (50 U.S.C. 4817); or
``(xvi) develops any artificial intelligence system that is
designed to be exclusively used for, or which the relevant
covered foreign person intends to be used for, any--
``(I) military end use (such as for weapons targeting,
target identification, combat simulation, military vehicle or
weapon control, military decision-making, weapons design
(including chemical, biological, radiological, or nuclear
weapons), or combat system logistics and maintenance); or
``(II) government intelligence or mass-surveillance end
(such as through incorporation of features such as mining
text, audio, or video, image recognition, location tracking,
or surreptitious listening devices).
``(B) Updates.--The Secretary, in consultation with
Congress, may prescribe regulations in accordance with this
title to make updates to the technical parameters of
technologies described in subparagraph (A) as reasonably
needed for national security purposes.
``(9) Secretary.--Except as otherwise provided, the term
`Secretary' means the Secretary of the Treasury.
``(10) United states person.--The term `United States
person' means--
``(A) any United States citizen or an alien lawfully
admitted for permanent residence to the United States;
``(B) an entity organized under the laws of the United
States or of any jurisdiction within the United States
(including any foreign branch of such an entity); or
``(C) any person in the United States.''.
Subtitle C--Securities and Related Matters
SEC. 1731. REQUIREMENTS RELATING TO THE NON-SDN CHINESE
MILITARY-INDUSTRIAL COMPLEX COMPANIES LIST.
(a) Report.--
(1) In general.--Not later than 365 days after the date of
the enactment of this Act, and biennially thereafter for 6
years, the Secretary shall submit to the appropriate
congressional committees a report that states whether any of
the following foreign persons qualifies for inclusion on the
Non-SDN Chinese Military-Industrial Complex Companies List:
(A) Any PRC person listed on the Military End-User List
(Supplement No. 7 to part 744 of the Export Administration
Regulations).
(B) Any PRC person listed pursuant to section 1260H of the
William M. (Mac) Thornberry National Defense Authorization
Act for Fiscal Year 2021 (10 U.S.C. 113 note).
(C) Any PRC person listed on the Department of Commerce's
Entity List (Supplement No. 4 to part 744 of the Export
Administration Regulations).
(2) Process required.--To prepare the reports under
paragraph (1), the President shall establish a process under
which the Federal agencies responsible for administering the
lists described in subparagraphs (A), (B), and (C) of
paragraph (1) shall share with each other all relevant
information that led to the identification of the entities
described in such lists.
(3) Risk-based prioritization framework.--In making the
initial determinations under paragraph (1), the Secretary may
establish a risk-based prioritization framework factoring in
prioritization of entity review submitted to the Secretary by
the Federal agencies administering the lists described in
subparagraphs (A), (B), and (C) of paragraph (1).
(4) Annual reports to the appropriate congressional
committees.--The report under paragraph (1) may summarize
findings concerning entities previously reviewed pursuant to
this section and do not necessitate additional review by the
Secretary.
(5) Matters to be included.--The Secretary shall include in
the report required by paragraph (1) an overview of the
criteria required for listing on Non-SDN Chinese Military-
Industrial Complex Companies List. The heads of the Federal
agencies administering the lists described in subparagraphs
(A), (B), and (C) of paragraph (1) shall provide an overview
of the criteria for entity identification or listing on each
respective list.
(b) Requirement for Divestment.--
(1) In general.--The President shall promulgate rules that
prohibit a United States person from knowingly holding
securities of entities on the Non-SDN Chinese Military-
Industrial Complex Companies List, after the date that is 365
days after the date of enactment of this Act.
(2) Authorization.--The prohibitions on investment imposed
under paragraph (1) shall not apply to a transaction in a
security that is entered into on or before the date that is
365 days after the date of enactment of this Act by a United
States person, if such transaction is entered into solely to
divest of the security.
(c) Waiver.--
(1) In general.--The President may establish a process
under which the requirements of subsection (b) shall not
apply if the President determines to do so is necessary to
protect the national security or foreign policy objectives of
the United States.
(2) Case-by-case requirement.--Determinations under
paragraph (1) shall be issued on a case-by-case basis for
each entity on the Non-SDN Chinese Military-Industrial
Complex Companies List.
(3) Notice and briefing.--The President shall notify the
appropriate congressional committees in writing in advance of
issuing a determination under paragraph (1) and shall provide
a substantive briefing on the determination to the
appropriate congressional committees within 30 days of
issuing a determination.
(d) Definitions.--In this section:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Financial Services and the Committee
on Foreign Affairs of the House of Representatives; and
(B) the Committee on Banking, Housing, and Urban Affairs of
the Senate.
(2) Country of concern.--The term ``country of concern''--
(A) means the People's Republic of China; and
[[Page S6989]]
(B) includes the Hong Kong Special Administrative Region
and the Macau Special Administrative Region.
(3) Non-SDN chinese military-industrial complex companies
list.--The term ``Non-SDN Chinese Military-Industrial Complex
Companies List'' means the list maintained by the Office of
Foreign Assets Control of the Department of the Treasury
under Executive Order 13959, as amended by Executive Order
14032 (50 U.S.C. 1701 note; relating to addressing the threat
from securities investments that finance certain companies of
the People's Republic of China), and any successor order.
(4) PRC person.--The term ``PRC person'' means a foreign
person that--
(A) is incorporated in a principal place of business in, or
is organized under the laws of, a country of concern;
(B) is a member of the Central Committee of the Chinese
Communist Party;
(C) is the state or the government of a country of concern,
as well as any political subdivision, agency, or
instrumentality thereof; or
(D) is owned in the aggregate, directly or indirectly, 50
percent or more by an entity or a group of entities described
in subparagraph (A), (B), or (C).
Subtitle D--General Provisions
SEC. 1741. EXCEPTION RELATING TO IMPORTATION OF GOODS.
(a) In General.--The authorities and requirements to impose
sanctions authorized under this title shall not include the
authority or requirement to impose sanctions on the
importation of goods.
(b) Good Defined.--In this section, the term ``good'' means
any article, natural or manmade substance, material, supply
or manufactured product, including inspection and test
equipment, and excluding technical data.
____________________