[House Report 118-63]
[From the U.S. Government Publishing Office]


118th Congress }                                          { REPORT 
                        HOUSE OF REPRESENTATIVES
 1st Session   }                                          { 118-63

======================================================================
 
                   DETERRING AMERICA'S TECHNOLOGICAL ADVERSARIES 
                                     ACT

                                _______
                                

  May 16, 2023.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. McCaul, from the Committee on Foreign Affairs, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 1153]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Foreign Affairs, to whom was referred the 
bill (H.R. 1153) to provide a clarification of non-
applicability for regulation and prohibition relating to 
sensitive personal data under the International Emergency 
Economic Powers Act, and for other purposes, having considered 
the same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                                CONTENTS

                                                                   Page
Summary and Purpose..............................................     2
Hearings.........................................................     4
Committee Consideration and Votes................................     4
Oversight Findings and Recommendations...........................     5
New Budget Authority, Tax Expenditures, and Federal Mandates.....     6
Congressional Budget Office Cost Estimate........................     6
Committee Cost Estimate..........................................     8
Federal Mandates.................................................     8
Non-Duplication of Federal Programs..............................     8
Performance Goals and Objectives.................................     8
Congressional Accountability Act.................................     8
New Advisory Committees..........................................     8
Earmark Identification...........................................     8
Section-by-Section Analysis......................................     9
Changes in Existing Law..........................................    10
Dissenting Views.................................................    11

                          SUMMARY AND PURPOSE

    H.R. 1153, the Deterring America's Technological 
Adversaries Act (or DATA Act), is essential to addressing the 
significant threat posed by TikTok and other similar companies. 
Specifically, the bill clarifies that 35-year-old, pre-Internet 
amendments to the International Emergency Economic Powers Act 
(IEEPA) do not apply to certain sensitive personal data. It 
also prohibits U.S. persons from engaging with entities that 
knowingly transfer sensitive personal data to the government of 
the People's Republic of China (PRC). Furthermore, the bill 
mandates that the President sanction any foreign person that is 
controlled, owned, influenced, or operating on behalf of the 
government of the PRC and is reasonably believed to have 
facilitated or may be facilitating or contributing to the PRC's 
threatening activities, including military, intelligence, 
espionage, or surveillance activities.

TikTok Threatens U.S. Security

    TikTok's threat to individuals' personal data and U.S. 
national security are well-documented. The web browser used 
within the TikTok app can track every keystroke by its users. 
This means TikTok can collect information on what people type 
on their phones while visiting outside websites, which can 
reveal credit card numbers and passwords. While using the app, 
TikTok requests almost complete access to the contents of the 
users' phone, including the entire hard drive, contact lists, 
and other apps installed on the device. TikTok and ByteDance 
also secretly hand-pick specific videos to supercharge their 
distribution across its platform, raising serious concerns 
about content moderation and influence operations in the United 
States. Moreover, TikTok's owners are under investigation by 
the Department of Justice after employees of the company used 
the app to surveil American citizens, including several 
journalists who cover the tech industry. These examples, which 
represent a fraction of the publicly reported risks to using 
TikTok, are evidence that this app is a threat.

National Security Officials Voice Concerns

    In additional to public reporting, U.S. national security 
officials have been and continue to articulate TikTok's threat 
to national security. Several Biden Administration officials 
have expressed their concern publicly.
    The Director of the Federal Bureau of Investigation, 
Christopher Wray, said: ``We . . . do have national security 
concerns about the app [TikTok]. Its parent company is 
controlled by the Chinese government. And it gives them the 
potential to leverage the app in ways that I think should 
concern us.''\1\
---------------------------------------------------------------------------
    \1\December 2, 2022 remarks at the University of Michigan.
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    The Director of National Intelligence, Avril Haines, 
explained: ``It is extraordinary the degree to which China . . 
. [is] developing just frameworks for collecting foreign data 
and pulling it in and their capacity to then turn that around 
and use it to target audiences for information campaigns or for 
other things.''\2\
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    \2\December 3, 2022 remarks at the Reagan National Defense Forum.
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    The Director of the Central Intelligence Agency, William 
Burns, stated: ``I think it's a genuine concern . . . for the 
U.S. government, in the sense that, because the parent company 
of TikTok is a Chinese company, the Chinese government is able 
to insist upon extracting the private data of a lot of TikTok 
users in this country, and also to shape the content of what 
goes on to TikTok as well to suit the interests of the Chinese 
leadership . . . What I would underscore, though, is that it's 
genuinely troubling to see what the Chinese government could do 
to manipulate TikTok.''\3\
---------------------------------------------------------------------------
    \3\December 16, 2022 interview on PBS News Hour.
---------------------------------------------------------------------------
    Deputy Attorney General of the United States, Lisa Monaco, 
said: ``I don't use TikTok and I would not advise anybody to do 
so.''\4\
---------------------------------------------------------------------------
    \4\February 16, 2023 remarks at Chatham House, London.
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Governments Act against the TikTok Threat

    An increasing number of governments are banning TikTok on 
government devices due to the security risks. In 2022, the U.S. 
Congress banned TikTok on federal government phones. To date, 
more than half of all U.S. states have partially or fully 
banned TikTok from government devices. Britain, Canada, the 
executive arm of the European Union, and New Zealand's 
parliament have all also recently banned the app from official 
devices. The Government of India banned the use of TikTok and 
other Chinese mobile applications throughout the country. 
Except for India, these actions do nothing to protect non-
government devices from TikTok.

Legal Challenges Stymie Effective Response

    Two consecutive administrations have taken action against 
TikTok but were hamstrung by outdated laws that require urgent 
modernization.
    In 2019, the Trump Administration launched a national 
security review of TikTok's owner Beijing ByteDance Technology 
Company's (``ByteDance'') acquisition of U.S. social media app 
Musical.ly. The Committee on Foreign Investment in the United 
States (CFIUS) reviewed this acquisition as a ``non-notified 
transaction''--meaning ByteDance did not seek clearance from 
CFIUS when it acquired Musical.ly in 2017.
    On August 6, 2020, President Trump issued Executive Order 
13942, invoking authorities under the International Emergency 
Economic Powers Act (IEEPA), to prohibit any transaction by any 
person subject to the jurisdiction of the United States with 
ByteDance. On August 14, 2020, President Trump concluded the 
CFIUS review and issued an order that prohibited the 
acquisition by ByteDance of Musical.ly and demanded a 
divestment.
    On September 27, 2020, the United States District Court for 
the District of Columbia granted a nationwide preliminary 
injunction against the implementation of Executive Order 13942. 
The court determined that ByteDance would likely succeed on the 
merits of their claim that the prohibition contravened the 
information material exception. On June 9, 2021, the Biden 
Administration revoked EO 13492, effectively ending the 
litigation.
    For nearly two and half years, TikTok has continued to 
operate in the United States. Finally, in mid-March 2023, the 
Biden Administration reportedly demanded that ByteDance divest 
from TikTok, which appears to restate then President Trump's 
divestment order on August 14, 2020. It is unclear, however, if 
the Biden Administration has sufficient legal authority to 
enforce a divestiture and implement a potential ban.
    For these reasons, H.R. 1153 is critical to addressing 
contemporary threats to Americans and their sensitive personal 
data by malign activities of the People's Republic of China.

                                HEARINGS

    In compliance with clause 3(c)(6) of rule XIII of the rules 
of the House of Representatives, the full Committee held the 
following hearings:
     The February 28, 2023 hearing on ``Combatting the 
Generational Challenge of CCP Aggression'' was used to develop 
and consider H.R. 1153. Witnesses included Mr. Daniel 
Kritenbrink (Assistant Secretary of State for East Asian and 
Pacific Affairs, U.S. Department of State), Mr. Michael 
Schiffer (Assistant Administrator of the Bureau for Asia, U.S. 
Agency for International Development), Mr. Scott Nathan (Chief 
Executive Officer, U.S. International Development Finance 
Corporation), and Mr. Alan Estevez (Under Secretary of Commerce 
for Industry and Security, U.S. Department of Commerce).
     The March 23, 2024 hearing on ``The State of 
American Diplomacy in 2023: Growing Conflicts, Budget 
Challenges, and Great Power Competition'' with the Honorable 
Antony Blinken, Secretary of State, also related to the issues 
addressed by this bill.

                   COMMITTEE CONSIDERATION AND VOTES

    The Committee considered H.R. 1153 pursuant to notice, in 
open session, at a markup that commenced on February 28, 2023 
and concluded on March 1, 2023.
    The following amendments were considered by the Committee:
     Meeks amendment #16 (in the nature of a 
substitute) failed by a record vote of 16 ayes and 23 noes.
          Ayes (16): Meeks, Connolly, Keating, 
        Cicilline, Bera, Titus, Phillips, A. Kim (NJ), Jacobs, 
        Cherfilus-McCormick, Stanton, Dean, Moskowitz, J. 
        Jackson (IL), Kamlager-Dove, Crow.
          Noes (23): McCaul, Smith, Wilson, Issa, 
        Wagner, Mast, Burchett, Green, Barr, R. Jackson (TX), 
        Y. Kim (CA), Salazar, Huizenga, Radewagen, Hill, 
        Davidson, Waltz, Kean, Lawler, McCormick, Moran, James, 
        Self.
     Meeks amendment #11 (changing vital national 
security waiver to national interest waiver) failed by a record 
vote of 16 ayes and 24 noes.
          Ayes (16): Meeks, Connolly, Keating, 
        Cicilline, Bera, Titus, Phillips, A. Kim (NJ), Jacobs, 
        Cherfilus-McCormick, Stanton, Dean, Moskowitz, J. 
        Jackson (IL), Kamlager-Dove, Crow.
          Noes (24): McCaul, Smith, Wilson, Issa, 
        Wagner, Mast, Burchett, Green, Barr, R. Jackson (TX), 
        Y. Kim (CA), Salazar, Huizenga, Radewagen, Hill, 
        Davidson, Baird, Waltz, Kean, Lawler, McCormick, Moran, 
        James, Self.
     Kamlager-Dove amendment #17 (revised) (video games 
industry exemption) failed by a record vote of 16 ayes and 25 
noes.
          Ayes (16): Meeks, Connolly, Keating, 
        Cicilline, Bera, Titus, Phillips, A. Kim (NJ), Jacobs, 
        Cherfilus-McCormick, Stanton, Dean, Moskowitz, J. 
        Jackson (IL), Kamlager-Dove, Crow.
          Noes (25): McCaul, Smith, Wilson, Issa, 
        Wagner, Mast, Burchett, Green, Barr, R. Jackson (TX), 
        Y. Kim (CA), Salazar, Huizenga, Radewagen, Hill, 
        Davidson, Baird, Waltz, Kean, Lawler, Mills, McCormick, 
        Moran, James, Self.
     Manning amendment #4 (exempting transactions by 
U.S. entities with sanctionable minority shareholders) failed 
by a record vote of 16 ayes and 24 noes.
          Ayes (16): Meeks, Connolly, Keating, 
        Cicilline, Bera, Titus, Phillips, A. Kim (NJ), Jacobs, 
        Cherfilus-McCormick, Stanton, Dean, Moskowitz, J. 
        Jackson (IL), Kamlager-Dove, Crow.
          Noes (24): McCaul, Smith, Wilson, Issa, 
        Wagner, Mast, Burchett, Barr, R. Jackson (TX), Y. Kim 
        (CA), Salazar, Huizenga, Radewagen, Hill, Davidson, 
        Baird, Waltz, Kean, Lawler, Mills, McCormick, Moran, 
        James, Self.
     Jacobs amendment #11 (striking sanction for 
knowingly assisting sanctionable person) failed by a record 
vote of 16 ayes and 24 noes.
          Ayes (16): Meeks, Connolly, Keating, 
        Cicilline, Bera, Titus, Phillips, A. Kim (NJ), Jacobs, 
        Cherfilus-McCormick, Stanton, Dean, Moskowitz, J. 
        Jackson (IL), Kamlager-Dove, Crow.
          Noes (24): McCaul, Smith, Wilson, Issa, 
        Wagner, Mast, Burchett, Barr, R. Jackson (TX), Y. Kim 
        (CA), Salazar, Huizenga, Radewagen, Hill, Davidson, 
        Baird, Waltz, Kean, Lawler, Mills, McCormick, Moran, 
        James, Self.
     Phillips amendment #14 (striking section 101 of 
the bill) failed by voice vote.
     Allred amendment #8 (exempting European 
entertainment software subsidiaries of sanctionable entities) 
failed by a record vote of 16 ayes and 24 noes.
          Ayes (16): Meeks, Connolly, Keating, 
        Cicilline, Bera, Titus, Phillips, A. Kim (NJ), Jacobs, 
        Cherfilus-McCormick, Stanton, Dean, Moskowitz, J. 
        Jackson (IL), Kamlager-Dove, Crow.
          Noes (24): McCaul, Smith, Wilson, Issa, 
        Wagner, Mast, Burchett, Barr, R. Jackson (TX), Y. Kim 
        (CA), Salazar, Huizenga, Radewagen, Hill, Davidson, 
        Baird, Waltz, Kean, Lawler, Mills, McCormick, Moran, 
        James, Self.
    H.R. 1153 was ordered favorably reported to the House by a 
record vote of 24 ayes and 16 noes.
      Ayes (24): McCaul, Smith, Wilson, Issa, 
Wagner, Mast, Burchett, Barr, R. Jackson (TX), Y. Kim (CA), 
Salazar, Huizenga, Radewagen, Hill, Davidson, Baird, Waltz, 
Kean, Lawler, Mills, McCormick, Moran, James, Self.
      Noes (16): Meeks, Connolly, Keating, 
Cicilline, Bera, Titus, Phillips, A. Kim (NJ), Jacobs, 
Cherfilus-McCormick, Stanton, Dean, Moskowitz, J. Jackson (IL), 
Kamlager-Dove, Crow.

                 OVERSIGHT FINDINGS AND RECOMMENDATIONS

    In compliance with Clause 3(c)(1) of rule XIII of the rules 
of the House of Representatives, the Committee reports that the 
findings and recommendations of the Committee, based on 
oversight activities under Clause 2(b)(1) of rule X of the 
House of Representatives, are incorporated in the ``Summary and 
Purpose'' section of this report, above.

      NEW BUDGET AUTHORITY, TAX EXPENDITURES, AND FEDERAL MANDATES

    Clause 3(c)(2) of House rule XIII is inapplicable because 
this bill does not provide new budget authority or increased 
tax expenditures.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE



    H.R. 1153 would allow the Administration to impose 
sanctions on any foreign person who works with or uses software 
that is under the jurisdiction of the People's Republic of 
China and that contributes to Chinese military or intelligence 
efforts. The bill also would newly authorize the President to 
regulate the transfer of sensitive information, which includes 
personally identifiable information. In addition, the bill 
would require the Administration to periodically provide to the 
Congress a list of foreign countries that are democracies or 
emerging democracies and are partners of the United States. 
Finally, 90 days after enactment, the President would be 
required to determine whether entities that own or operate 
certain connected software applications would be subject to 
sanctions. The authority to impose sanctions would expire after 
five years.
    H.R. 1153 also would block transactions in certain assets 
and property that are in the United States or that come under 
the control of people in the United States. Those sanctions 
would increase the number of people who are subject to civil or 
criminal monetary penalties. Such penalties are recorded as 
revenues, and a portion can be spent without further 
appropriation.
    Using data concerning similar actions, CBO estimates that 
any additional sanctions would affect a small number of people; 
thus, enacting H.R. 1153 would have insignificant effects on 
revenues and direct spending, and would, on net, reduce 
deficits by insignificant amounts over the 2023-2033 period.
    On the basis of information about the costs of similar 
requirements, CBO estimates that providing the reports required 
under H.R. 1153 would cost less than $500,000 over the 2023-
2028 period; such spending would be subject to availability of 
appropriated funds.
    H.R. 1153 would impose private-sector mandates as defined 
in the Unfunded Mandates Reform Act (UMRA). CBO cannot 
determine whether the costs of those mandates would exceed the 
annual threshold established in UMRA for private-sector 
mandates ($198 million in 2023, adjusted annually for 
inflation). The bill contains no intergovernmental mandates as 
defined in UMRA.
    The bill would impose a private-sector mandate, as defined 
in UMRA, on U.S. entities that are investors in or partial 
owners of Chinese technology firms by regulating business 
practices that are allowable under current law. The cost of the 
mandate would be the share of costs borne by those U.S. 
entities for complying with new data export requirements, which 
could be significant, or the loss of income from technology 
firms choosing to exit the U.S. Some U.S. companies may also be 
required to administer some aspects of the regulations, such as 
limiting user access to regulated products and services. Such a 
requirement would impose additional administrative costs on 
affected entities.
    The scope of the regulations would be defined in a 
directive issued by the Department of Treasury and could 
encompass companies that routinely collect sensitive personal 
information, including social media, gaming, and artificial 
intelligence companies and virtual private network (VPN) hosts. 
Regulations also could impose additional requirements on U.S. 
companies that knowingly facilitate transfers of sensitive 
personal information to China. Affected entities could include 
companies that provide users with access to products and 
services through app stores, including by requiring the removal 
of applications prohibited by regulation.
    CBO cannot determine the exact cost of the mandate because 
much of the information on the scale of U.S. investment in 
Chinese companies is confidential. In addition, the Department 
of Treasury has not issued the regulations required by the 
bill.
    Any sanctions imposed as a result of the bill would have 
the effect of prohibiting individuals or entities in the United 
States from engaging in transactions involving assets and 
property that have been frozen. Those transactions are 
otherwise permitted under current law. The cost of the mandate 
would be any income lost because of the prohibition. CBO 
expects that because only a small number of people or entities 
would be affected, the loss of income from any incremental 
increase in restrictions imposed by the bill would be small as 
well.

                             OTHER EFFECTS

    The bill would indirectly affect individuals and companies 
in the United States if technology firms subject to regulation 
elect to remove their products and services from the U.S. 
marketplace rather than comply with data export requirements. 
Should this occur, some companies and users that have created 
businesses and accumulated followers relying on products and 
services, such as social media platforms, that have been 
withdrawn would lose revenue. Such losses would not be the 
direct result of complying with a federal mandate as defined in 
UMRA.
    CBO expects that some companies operating in the United 
States would benefit by increasing their market share of 
similar products and services if others exit the marketplace.
    The CBO staff contacts for this estimate are Madeleine Fox 
(for federal costs) and Brandon Lever (for mandates). The 
estimate was reviewed by Chad Chirico, Deputy Director of 
Budget Analysis.

                                         Phillip L. Swagel,
                             Director, Congressional Budget Office.

                        COMMITTEE COST ESTIMATE

    The Committee adopts as its own the Congressional Budget 
Office cost estimate on this measure.

                            FEDERAL MANDATES

    The Committee adopts as its own the identification, 
description, and assessment of federal mandates contained in 
the Congressional Budget Office cost estimate on this measure.

                  NON-DUPLICATION OF FEDERAL PROGRAMS

    Clause 3(c)(5) of House rule XIII is not applicable to this 
measure, as it is not a bill or joint resolution that 
establishes or reauthorizes a federal program.

                    PERFORMANCE GOALS AND OBJECTIVES

    The goal of H.R. 1153 is to modernize implementation of 
portions of the International Emergency Economic Powers Act 
that were written before the widespread use of the Internet, to 
ensure that they address national security concerns arising 
from the 21st century data-driven economy by creating a legally 
durable authority to sanction entities that use Americans' 
sensitive data in ways that undermine U.S. national security 
interests. Toward that end, the bill requires a timebound 
determination by the Executive Branch regarding whether TikTok 
and ByteDance meet the criteria for the newly enhanced 
sanctions authority.

                    CONGRESSIONAL ACCOUNTABILITY ACT

    H.R. 1153 does not apply to terms and conditions of 
employment or to access to public services or accommodations 
within the legislative branch.

                        NEW ADVISORY COMMITTEES

    H.R. 1153 does not establish or authorize any new advisory 
committees.

                         EARMARK IDENTIFICATION

    H.R. 1153 contains no congressional earmarks, limited tax 
benefits, or limited tariff benefits as described in clauses 
9(e), 9(f), and 9(g) of House rule XXI.

                      SECTION-BY-SECTION ANALYSIS

Sec. 1. Short title and table of contents

Sec. 2. Findings

    Makes findings that quote Biden Administration national 
security officials explaining the threat posed by TikTok.

Sec. 3. Authorization of appropriations

    No additional amounts are authorized to be made available 
to carry out this act.

Sec. 4. Severability

    This section explains that if any provision of this act or 
its application is held invalid, the invalidity does not affect 
other provisions or applications that can be given effect 
without the invalid provision or application.

Sec. 5. Definitions

    This section includes several definitions that apply 
throughout the bill.

    TITLE I--CLARIFICATION OF NON-APPLICABILITY FOR REGULATION AND 
  PROHIBITION RELATING TO SENSITIVE PERSONAL DATA UNDER INTERNATIONAL 
                     EMERGENCY ECONOMIC POWERS ACT

Sec. 101. Clarification

    This section explains that the importation or exportation 
of sensitive personal data shall not constitute the importation 
or exportation of information or informational materials for 
the purposes of paragraph (1) or (3) of section 203(b) of 
IEEPA, and clarifies that nothing in this section or in IEEPA 
may provide for the application of paragraph (1) or (3) of 
section 203(b) of IEEPA to the importation from or exportation 
to China, directly or indirectly, of sensitive personal data.

Sec. 102. Directive

    This section prohibits U.S. persons from any transactions 
with a person that the Secretary of the Treasury determines 
knowingly provides or may transfer sensitive personal data of 
persons subject to U.S. jurisdiction to any foreign person 
under the influence, jurisdiction, or direction of the 
government of the People's Republic of China (PRC).

 TITLE II--IMPOSITION OF SANCTIONS ON CERTAIN TRANSACTIONS RELATING TO 
                    CONNECTED SOFTWARE APPLICATIONS

Sec. 201. Imposition of sanctions

    Directs the President to sanction any foreign person that 
operates, directs, or otherwise deals in a connected software 
application that is subject to the jurisdiction or direction 
of, operating on behalf of, owned or controlled by, or subject 
to the influence of the government of the PRC and is reasonably 
believed to have facilitated or may be facilitating or 
contributing to dangerous aspects of the PRC, including its 
military, espionage, intelligence, or malicious cyber 
activities.

Sec. 202. Sanction described

    Describes the types of sanctions, implementation, and 
penalties as well as the exceptions available, and it also 
provides a waiver to the President to not apply sanctions if it 
is vital to the national security interests.

Sec. 203. Sunset

    Terminates the authorities in the bill five years after the 
date of its enactment.

 TITLE III--SPECIFIC DETERMINATIONS WITH RESPECT TO THE IMPOSITION OF 
                               SANCTIONS

Sec. 301. Determination relating to Bytedance, Ltd., TikTok, and 
        related entities

    Within 90 days after the date of enactment, and every 180 
days thereafter for three years, requires the President to 
determine if ByteDance or TikTok meets the sanctionable 
criteria in section 102 or section 201.

Sec. 302. Requests by appropriate congressional committees

    Allows the Chairperson and Ranking Member of an appropriate 
congressional committee to request that the President determine 
whether a foreign person meets the sanctionable criteria in 
section 102 or section 201.

                        CHANGES IN EXISTING LAW

    The bill, as reported, does not propose to repeal or amend 
a statute or part thereof.

                            DISSENTING VIEWS

    There is broad bipartisan consensus in Congress and on the 
House Foreign Affairs Committee that the meteoric rise of 
Tiktok calls for legislative action that protects our privacy, 
boosts our economy, and safeguards our national security. The 
unjustifiable businesses practices of Tiktok, owned by the 
Chinese company Bytedance, are real: the company has spied on 
journalist and been deceptive about its institutional policies. 
Moreover, the national security threats arising from American 
data being stored in the People's Republic of China and 
accessible to Beijing-based staff are clear. To mitigate any 
potential risk to sensitive government data, the United States 
and allies around the globe have taken the prudent step of 
banning TikTok from government devices.
    But the cure cannot be worse than the disease. We must 
address concerns with PRC based tech companies thoughtfully, 
holistically, with an eye to our economy, two eyes on our 
national security, and without compromising the cherished 
values that have underpinned our nation for centuries. 
Unfortunately, the DATA Act misses the mark by a wide margin. 
The bill would damage our alliances across the globe, bring 
more countries into China's sphere, destroy jobs here in the 
United States and undermine American values of free speech and 
free enterprise. These ills are not just bad policy, they would 
actively undermine our national security.
    The legislation before us today is unvetted and dangerously 
overbroad. Framed as a ``TikTok'' bill, it is closer to a 
rewrite of the American-led global economic order. It applies 
mandatory sanctions to companies that have independent American 
subsidiaries without giving any consideration to the 
consequences. What would happen to these subsidiaries? The bill 
does not say. The bill would impose sanctions on companies with 
a combined market capitalization of over a trillion dollars 
while explicitly refusing to authorize one penny to the 
agencies that oversee sanctions enforcement. How will the 
government handle enormous new responsibilities with no 
additional resources? The bill does not say.
    The DATA Act would also result in sanctions on individuals 
and companies in allied and partner nations around the globe. 
Take semiconductors: there is widespread and bipartisan 
consensus that semiconductor manufacturing and supply chains 
are crucial to national security. But TSMC, Samsung, and SK 
Hynix all make significant revenue selling chips for Chinese 
companies that would be sanctioned by this bill. Under the 
secondary sanctions set forth in this legislation, by necessity 
each of these Taiwanese and Korean entities would be subject to 
mandatory sanctions. How does it make sense to sanction the 
very companies the Executive Branch and bipartisan Members of 
this Committee are actively courting to build fabs in the 
United States? The bill does not say.
    More careful deliberation would have yielded a better bill. 
The Committee could have held hearings before the markup, and 
carefully crafted bipartisan legislation together. Instead, the 
text of the legislation was drafted in a rushed manner to meet 
an arbitrary markup deadline. Many thoughtful and good faith 
amendments were proposed at markup but they were generally 
rejected in one sentence or two without careful consideration 
of how the amendments fixed significant issues with the 
legislation.
    While the DATA Act is flawed, no one should be giving a 
permission slip to Tiktok to carry on with business as usual. 
The company must take immediate action to ensure that all 
American data is stored in the United States, on American 
servers, run by an American company, and inaccessible to all 
PRC-based employees. If Beijing government officials come 
knocking on Bytedance's doors requesting American data under 
the omnipresent and omnipotent warrant that is the Chinese 
National Security Law, Bytedance must be able to truthfully 
answer that they are technically incapable of providing the 
requested information. If they are unable to do this in a 
reasonable time period, they should not be able to conduct 
business in the United States.
    A better bill would have taken such an approach. 
Legislation narrowly proscribing data storage rules and anti-
censorship guarantees would garner broad bipartisan support. 
The threat of sanctions to enforce these rules would not only 
be reasonable, but remarkably prudent. A mandatory sanctions 
bill on friends and allies that do business with any PRC based 
entity, which is what the DATA Act amounts to, is unfortunately 
the very opposite: rash, shortsighted, and sure to backfire.
    The United States is at its strongest when we work with our 
allies and partners around the globe, animated by and in 
pursuit of our core values. We are at our weakest when we 
trudge forward alone, adopting our adversary's values as our 
own in pursuit of a short term advantage. This bill epitomizes 
the latter not the former, and as a result, Committee Democrats 
opposed it unequivocally and unanimously.
            Sincerely,
                                          Gregory W. Meeks,
                                                          Chairman.

                                  [all]