,i #aacth ,,congress #b;d ,session ,h4 ,r4 #eajc ,,in ,,the ,,house ,,of ,,representatives ,july #ad1 #bjad ,mr4 ,rohrabacher 7for himself and ,mr4 ,ryan of ,ohio7 introduced the following bill2 which was referred to the ,committee on ,foreign ,affairs1 and in addition to the ,committees on the ,judiciary and ,financial ,services1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to impose sanctions on ,chinese state-owned enterprises and any person who is a member of the board of directors1 an executive officer1 or a senior official of a ,chinese state-owned enterprise for benefitting from cyber and economic espionage against the ,united ,states4 #a4 ,short title ,this ,act may be cited as the ,chinese ,communist ,economic ,espionage ,sanctions ,act4 #b4 ,findings ,congress finds the following3 7#a7 ,the ,chinese ,communist ,party 7,,ccp7 has made it its policy to engage in economic warfare against the ,united ,states4 7#b7 ,the ,,ccp uses the resources of the ,people's ,liberation ,army 7,,pla7 and the ,chinese ,state to drain the ,united ,states of economic might1 including by means of economic espionage and cyber espionage1 unfair trade practices1 unfair labor practices1 and currency manipulation4 7#c7 ,chinese state-owned enterprises 7,,soe7 and the ,,pla are the main beneficiary of the ,,ccp's campaign of theft against the ,united ,states4 7#d7 ,although many ,s,o,es are listed on stock exchanges or officially privatized1 the ,chinese government retains at least one-half of equity in those companies4 7#e7 ,s,o,es come under the control of the ministerial-level ,state-owned ,assets ,supervision and ,administration ,commission4 7#f7 ,members of the boards of directors and senior management of ,s,o,es are appointed by the ,state-owned ,assets ,supervision and ,administration ,commission in consultation with the ,communist ,party's ,department of ,organization4 7#g7 ,more than two-thirds of board members and three-quarters of senior executives of ,s,o,es are either ,communist ,party members or officials4 7#h7 ,corruption within the ,,ccp is widespread and endemic4 7#i7 ,,ccp officials use their positions of control and influence within and over ,,soe's to enrich themselves and their families4 7#aj7 ,the vast majority of the ,chinese people do not benefit from the corruption of the ,,ccp4 7#aa7 ,on ,may #ai1 #bjad1 the ,united ,states ,department of ,justice announced charges against five members of the ,,pla1 accusing them of stealing trade secrets from ,united ,states companies and marking the first time the ,united ,states has charged foreign government employees with economic espionage4 7#ab7 ,the indictment charged that members of the ,,pla worked to steal information from ,united ,states companies that would be useful to their competitors in ,china1 including state-owned enterprises4 7#ac7 ,chinese ,s,o,es are reported to have benefitted directly from their actions1 including the ,state ,nuclear ,power ,technology ,corporation1 the ,baosteel ,group1 and the ,aluminum ,corporation of ,china 7,chinalco74 7#ad7 ,the chairman of the board and the majority of the boards for the ,state ,nuclear ,power ,technology ,corporation1 the ,baosteel ,group1 and the ,aluminum ,corporation of ,china 7,chinalco7 are members of the ,,ccp4 7#ae7 ,on ,may #ba1 #bjad1 ,assistant ,attorney ,general ,john ,carlin said that criminal charges can justify economic sanctions4 7#af7 ,the indictment named members of ,unit #facih which is publicly identified as a ,shanghai-based cyber unit of the ,,pla also known as ,,apt#a4 7#ag7 ,unit #facih is part of the #bnd ,bureau of the ,,pla1 #crd ,department of the ,general ,staff4 7#ah7 ,unit #facih was first publically identified in #bjac as ,,apt#a by ,mandiant1 a ,united ,states cyber security firm and leader in cyber incident response industry4 7#ai7 ,mandiant exposed a timeline of ,unit #facih's economic espionage conducted since #bjjf against #ada victims across multiple industries4 7#bj7 ,mandiant's conclusions have been supported by ,crowd,strike1 another cyber security company1 which publicly revealed the existence of ,unit #fadhf1 a related ,,pla unit dedicated to cyber espionage4 7#ba7 ,george ,kurts1 the co-founder of ,crowd,strike1 stated that ,if you look at all the groups that we track in ,china1 the indictments are just the very tip of the iceberg44 7#bb7 ,units #facih and #fadhf are only two of at least #bj cyber threat groups in ,communist ,china and are considered by multiple experts to have stolen vast amounts of valuable information from the ,united ,states4 7#bc7 ,the #bjaa annual report to ,congress from the ,office of the ,secretary of ,defense1 titled ,military and ,security ,developments ,involving the ,people's ,republic of ,china1 states1 ,the ,,prc also utilizes a large1 well-organized network of enterprises1 defense factories1 affiliated research institutes1 and computer network operations to facilitate the collection of sensitive information and export-controlled technology1 as well as basic research and science that supports ,u4,s4 defense system modernization44 7#bd7 ,a #bjaa report by the ,office of the ,national ,counterintelligence ,executive found that ,chinese actors are the world's most active and persistent perpetrators of economic espionage44 7#be7 ,the #bjab annual report to ,congress from the ,office of the ,secretary of ,defense1 titled ,military and ,security ,developments ,involving the ,people's ,republic of ,china1 found that ,chinese attempts to collect ,u4,s4 technological and economic information will continue at a high level and will represent a growing and persistent threat to ,u4,s4 economic security44 7#bf7 ,james ,clapper1 the ,director of ,national ,intelligence1 stated1 ,among significant foreign threats 4 4 4 ,china remains the most capable and persistent intelligence threats and are aggressive practitioners of economic espionage against the ,united ,states44 7#bg7 ,retired ,general ,michael ,hayden1 former ,director of the ,central ,intelligence ,agency and ,director of the ,national ,security ,agency1 stated1 ,the intensity of ,chinese espionage is certainly greater than that what we saw between the ,u4,s4 and the ,soviets during the ,cold ,war4 ,the problem is ,china's view is that industrial espionage by the state against relatively vulnerable private enterprise is a commonly accepted state practice14 7#bh7 ,the annual report by the congressional ,united ,states-,china ,economic and ,security ,review ,commission stated in #bjac1 strong evidence emerged that the ,chinese government is directing and executing a large-scale cyber espionage campaign against the ,united ,states4 7#bi7 ,retired ,lieutenant ,general ,ronald ,burgess1 ,jr41 former ,director of the ,defense ,intelligence ,agency1 stated1 ,china has used its intelligence services to gather information via a significant network of agents and contacts using a variety of methods ''' ,in recent years1 multiple cases of economic espionage and theft of dual-use and military technology have uncovered pervasive ,chinese collection efforts14 7#cj7 ,congressman ,mike ,rogers1 ,chairman of the ,permanent ,select ,committee on ,intelligence of the ,house of ,representatives1 stated1 ,china's economic espionage has reached an intolerable level and ,i believe that the ,united ,states and our allies in ,europe and ,asia have an obligation to confront ,beijing and demand that they put a stop to this piracy4 ,beijing is waging a massive trade war on us all1 and we should band together to pressure them to stop4 ,combined1 the ,united ,states and our allies in ,europe and ,asia have significant diplomatic and economic leverage over ,china1 and we should use this to our advantage to put an end to this scourge14 7#ca7 ,the threat of ,chinese espionage is so large that ,senator ,sheldon ,whitehouse1 ,d-,rhode ,island1 who chaired the ,cyber ,task ,force of the ,select ,committee on ,intelligence1 proclaimed it to be part of the biggest transfer of wealth through theft and piracy in the history of mankind4 7#cb7 ,massive cyber and economic espionage organized1 directed1 and carried out by the ,,ccp and the ,,pla has contributed to creating a #cah1jjj1jjj1jjj ,united ,states trade deficit with ,communist ,china in #bjac1 which equals #a4hi percent of total ,united ,states gross domestic product 7,,gdp74 #c4 ,sense of ,congress ,it is the sense of ,congress that the ,chinese ,communist ,party and the ,government of the ,people's ,republic of ,china should be condemned for sponsoring1 planning1 ordering1 conducting1 and benefitting from cyber and economic espionage against the ,united ,states4 #d4 ,financial ,measures 7a7 ,freezing of ,assets ,the ,president shall exercise all powers granted by the ,international ,emergency ,economic ,powers ,act 7#ej ,u4,s4,c4 #agja et seq47 7except that the requirements of section #bjb of such ,act 7#ej ,u4,s4,c4 #agja7 shall not apply7 to the extent necessary to block and prohibit all transactions in all property and interests in property of a covered ,chinese state-owned enterprise or a person who is a member of the board of directors1 an executive officer1 or a senior official of a covered ,chinese state-owned enterprise if such property and interests in property are in the ,united ,states1 come within the ,united ,states1 or are or come within the possession or control of a ,united ,states person4 7b7 ,enforcement 7#a7 ,penalties ,a covered ,chinese state-owned enterprise or a person who is a member of the board of directors1 an executive officer1 or a senior official of a covered ,chinese state-owned enterprise shall be subject to the penalties set forth in subsections 7b7 and 7c7 of section #bjf of the ,international ,emergency ,economic ,powers ,act 7#ej ,u4,s4,c4 #agje7 to the same extent as a person that commits an unlawful act described in subsection 7a7 of such section4 7#b7 ,requirements for financial institutions ,not later than #abj days after the date of the enactment of this ,act1 the ,secretary of the ,treasury shall prescribe or amend regulations as needed to require each financial institution that is a ,united ,states person and has within its possession or control assets that are property or interests in property of a covered ,chinese state-owned enterprise or a person who is a member of the board of directors1 an executive officer1 or a senior official of a covered ,chinese state-owned enterprise if such property and interests in property are in the ,united ,states to certify to the ,secretary that1 to the best of the knowledge of the financial institution1 the financial institution has frozen all assets within the possession or control of the financial institution that are required to be frozen pursuant to subsection 7a74 7c7 ,regulatory ,authority ,the ,secretary of the ,treasury shall issue such regulations1 licenses1 and orders as are necessary to carry out this section4 7d7 ,definitions ,in this section3 7#a7 ,covered ,chinese state-owned enterprise ,the term covered ,chinese state-owned enterprise means an enterprise that-- 7,a7 is organized under the laws of the ,people's ,republic of ,china1 including a foreign branch of such enterprise2 and 7,b7 is owned or controlled by the ,government of the ,people's ,republic of ,china or the ,chinese ,communist ,party4 7#b7 ,united ,states person ,the term ,united ,states person means-- 7,a7 a ,united ,states citizen or an alien lawfully admitted for permanent residence to the ,united ,states2 or 7,b7 an entity organized under the laws of the ,united ,states or any jurisdiction within the ,united ,states1 including a foreign branch of such an entity4 #e4 ,inadmissibility of certain aliens 7a7 ,ineligibility for visas ,an alien is ineligible to receive a visa to enter the ,united ,states and ineligible to be admitted to the ,united ,states if the alien is a person who is a member of the board of directors1 an executive officer1 or a senior official of a covered ,chinese state-owned enterprise4 7b7 ,current visas revoked ,the ,secretary of ,state shall revoke1 in accordance with section #bba7;i7 of the ,immigration and ,nationality ,act 7#h ,u4,s4,c4 #abja7;i771 the visa or other documentation of any alien who would be ineligible to receive such a visa or documentation under subsection 7a7 of this section4 7c7 ,regulatory authority ,the ,secretary of ,state shall prescribe such regulations as are necessary to carry out this section4 #f4 ,report to ,congress 7a7 ,in general ,not later than #ahj days after the date of the enactment of this ,act1 and annually thereafter1 the ,secretary of ,state and the ,secretary of the ,treasury shall submit to the appropriate congressional committees a report on-- 7#a7 the actions taken to carry out this ,act1 including the number of covered ,chinese state-owned enterprises and persons who are members of the board of directors1 executive officers1 or senior officials of covered ,chinese state-owned enterprises sanctioned during the year preceding the report2 and 7#b7 efforts by the executive branch to encourage the governments of other countries to impose sanctions that are similar to the sanctions imposed under this ,act4 7b7 ,form ,the report required by subsection 7a7 shall be submitted in unclassified form1 but may contain a classified annex4 7c7 ,definition ,in this section1 the term appropriate congressional committees means-- 7#a7 the ,committee on ,foreign ,affairs1 the ,permanent ,select ,committee on ,intelligence1 and the ,committee on ,ways and ,means of the ,house of ,representatives2 and 7#b7 the ,committee on ,foreign ,relations1 the ,select ,committee on ,intelligence1 the ,committee on ,finance1 and the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate4