    [United States Statutes at Large, Volume 134, 116th Congress, 2nd Session]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    Public Law 116-222
    116th Congress

    An Act

    To amend the Sarbanes-Oxley Act of 2002 to require certain issuers to
    disclose to the Securities and Exchange Commission information regarding
    foreign jurisdictions that prevent the Public Company Accounting
    Oversight Board from performing inspections under that Act, and for
    other purposes. <>

    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 ``Holding Foreign Companies Accountable
    Act''.
    SEC. 2. DISCLOSURE REQUIREMENT.

    Section 104 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7214) is
    amended by adding at the end the following:
    ``(i) Disclosure Regarding Foreign Jurisdictions That Prevent
    Inspections.--
    ``(1) Definitions.--In this subsection--
    ``(A) the term `covered issuer' means an issuer that
    is required to file reports under section 13 or 15(d) of
    the Securities Exchange Act of 1934 (15 U.S.C. 78m,
    78o(d)); and
    ``(B) the term `non-inspection year' means, with
    respect to a covered issuer, a year--
    ``(i) during which the Commission identifies
    the covered issuer under paragraph (2)(A) with
    respect to every report described in subparagraph
    (A) filed by the covered issuer during that year;
    and
    ``(ii) that begins after the date of enactment
    of this subsection.
    ``(2) Disclosure to commission.--The Commission shall--
    ``(A) identify each covered issuer that, with
    respect to the preparation of the audit report on the
    financial statement of the covered issuer that is
    included in a report described in paragraph (1)(A) filed
    by the covered issuer, retains a registered public
    accounting firm that has a branch or office that--
    ``(i) is located in a foreign jurisdiction;
    and
    ``(ii) the Board is unable to inspect or
    investigate completely because of a position taken
    by an authority in the foreign jurisdiction
    described in clause (i), as determined by the
    Board; and
    ``(B) <>  require each covered
    issuer identified under subparagraph (A) to, in
    accordance with the rules issued by the Commission under
    paragraph (4), submit to the

    [[Page 1064]]

    Commission documentation that establishes that the
    covered issuer is not owned or controlled by a
    governmental entity in the foreign jurisdiction
    described in subparagraph (A)(i).
    ``(3) <>  Trading
    prohibition after 3 years of non-inspections.--
    ``(A) In general.--If the Commission determines that
    a covered issuer has 3 consecutive non-inspection years,
    the Commission shall prohibit the securities of the
    covered issuer from being traded--
    ``(i) on a national securities exchange; or
    ``(ii) through any other method that is within
    the jurisdiction of the Commission to regulate,
    including through the method of trading that is
    commonly referred to as the `over-the-counter'
    trading of securities.
    ``(B) Removal of initial prohibition.--If, after the
    Commission imposes a prohibition on a covered issuer
    under subparagraph (A), the covered issuer certifies to
    the Commission that the covered issuer has retained a
    registered public accounting firm that the Board has
    inspected under this section to the satisfaction of the
    Commission, the Commission shall end that prohibition.
    ``(C) Recurrence of non-inspection years.--If, after
    the Commission ends a prohibition under subparagraph (B)
    or (D) with respect to a covered issuer, the Commission
    determines that the covered issuer has a non-inspection
    year, the Commission shall prohibit the securities of
    the covered issuer from being traded--
    ``(i) on a national securities exchange; or
    ``(ii) through any other method that is within
    the jurisdiction of the Commission to regulate,
    including through the method of trading that is
    commonly referred to as the `over-the-counter'
    trading of securities.
    ``(D) <>  Removal of subsequent
    prohibition.--If, after the end of the 5-year period
    beginning on the date on which the Commission imposes a
    prohibition on a covered issuer under subparagraph (C),
    the covered issuer certifies to the Commission that the
    covered issuer will retain a registered public
    accounting firm that the Board is able to inspect under
    this section, the Commission shall end that prohibition.
    ``(4) <>  Rules.--Not later than 90 days
    after the date of enactment of this subsection, the Commission
    shall issue rules that establish the manner and form in which a
    covered issuer shall make a submission required under paragraph
    (2)(B).''.
    SEC. 3. <>  ADDITIONAL DISCLOSURE.

    (a) Definitions.--In this section--
    (1) the term ``audit report'' has the meaning given the term
    in section 2(a) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
    7201(a));
    (2) the term ``Commission'' means the Securities and
    Exchange Commission;
    (3) the term ``covered form''--
    (A) means--

    [[Page 1065]]

    (i) the form described in section 249.310 of
    title 17, Code of Federal Regulations, or any
    successor regulation; and
    (ii) the form described in section 249.220f of
    title 17, Code of Federal Regulations, or any
    successor regulation; and
    (B) includes a form that--
    (i) is the equivalent of, or substantially
    similar to, the form described in clause (i) or
    (ii) of subparagraph (A); and
    (ii) a foreign issuer files with the
    Commission under the Securities Exchange Act of
    1934 (15 U.S.C. 78a et seq.) or rules issued under
    that Act;
    (4) the terms ``covered issuer'' and ``non-inspection year''
    have the meanings given the terms in subsection (i)(1) of
    section 104 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7214),
    as added by section 2 of this Act; and
    (5) the term ``foreign issuer'' has the meaning given the
    term in section 240.3b-4 of title 17, Code of Federal
    Regulations, or any successor regulation.

    (b) Requirement.--Each covered issuer that is a foreign issuer and
    for which, during a non-inspection year with respect to the covered
    issuer, a registered public accounting firm described in subsection
    (i)(2)(A) of section 104 of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
    7214), as added by section 2 of this Act, has prepared an audit report
    shall disclose in each covered form filed by that issuer that covers
    such a non-inspection year--
    (1) that, during the period covered by the covered form,
    such a registered public accounting firm has prepared an audit
    report for the issuer;
    (2) the percentage of the shares of the issuer owned by
    governmental entities in the foreign jurisdiction in which the
    issuer is incorporated or otherwise organized;
    (3) whether governmental entities in the applicable foreign
    jurisdiction with respect to that registered public accounting
    firm have a controlling financial interest with respect to the
    issuer;
    (4) the name of each official of the Chinese Communist Party
    who is a member of the board of directors of--
    (A) the issuer; or
    (B) the operating entity with respect to the issuer;
    and
    (5) whether the articles of incorporation of the issuer (or
    equivalent organizing document) contains any charter of the

    [[Page 1066]]

    Chinese Communist Party, including the text of any such charter.

    Approved December 18, 2020.

    LEGISLATIVE HISTORY--S. 945:
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    CONGRESSIONAL RECORD, Vol. 166 (2020):
    May 20, considered and passed Senate.
    Dec. 2, considered and passed House.