,,ii #aaith ,,congress #ast ,session ,s4 #ajec ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,march #ac1 #bjbe ,mr4 ,cornyn 7for himself1 ,ms4 ,cortez ,masto1 ,mr4 ,scott of ,south ,carolina1 ,mr4 ,schumer1 ,mr4 ,sullivan1 ,ms4 ,warren1 ,mr4 ,hagerty1 ,mr4 ,kim1 ,mr4 ,ricketts1 ,ms4 ,slotkin1 ,mr4 ,banks1 ,mr4 ,bennet1 ,mr4 ,mc,cormick1 and ,mr4 ,fetterman7 introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,a ,,bill ,to protect the national security of the ,united ,states by imposing sanctions with respect to certain persons of the ,people's ,republic of ,china and prohibiting and requiring notifications with respect to certain investments by ,united ,states persons in the ,people's ,republic of ,china1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this title may be cited as the ,foreign ,investment ,guardrails to ,help ,thwart ,china ,act of #bjbe or ,,fight ,china ,act of #bjbe4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,sec4 #b4 ,secretary defined4 ,sec4 #c4 ,severability4 ,sec4 #d4 ,authorization of appropriations4 ,sec4 #e4 ,termination4 ,,title ,i--,imposition of sanctions ,sec4 #aja4 ,imposition of sanctions4 ,sec4 #ajb4 ,definitions4 ,,title ,,ii--,prohibition and notification on investments relating to covered national security transactions ,sec4 #bja4 ,prohibition and notification on investments relating to covered national security transactions4 ,,title ,,iii--,securities and related matters ,sec4 #cja4 ,requirements relating to the ,non-,,sdn ,chinese ,military-,industrial ,complex ,companies ,list4 #b4 ,secretary defined ,except as otherwise provided1 in this ,act1 the term ,secretary means the ,secretary of the ,treasury4 #c4 ,severability ,if any provision of this ,act1 or the application thereof1 is held invalid1 the validity of the remainder of this ,act and the application of such provision to other persons and circumstances shall not be affected thereby4 #d4 ,authorization of appropriations 7a7 ,in general ,there is authorized to be appropriated #aej1jjj1jjj to the ,department of the ,treasury1 out of which amounts may be transferred to the ,department of ,commerce to jointly conduct outreach to industry and persons affected by this ,act1 for each of the first two fiscal years beginning on or after the date of the enactment of this ,act1 to carry out this ,act4 7b7 ,hiring authority 7#a7 ,by the ,president ,the ,president may appoint1 without regard to the provisions of sections #ccji through #ccah of title #e1 ,united ,states ,code1 not more than #ae individuals directly to positions in the competitive service 7as defined in section #bajb of that title7 to carry out this ,act4 7#b7 ,by agencies ,the ,secretary and the ,secretary of ,commerce may appoint1 without regard to the provisions of sections #ccji through #ccah of title #e1 ,united ,states ,code1 individuals directly to positions in the competitive service 7as defined in section #bajb of that title7 of the ,department of the ,treasury and the ,department of ,commerce1 respectively1 to carry out this ,act4 #e4 ,termination ,this ,act shall cease to have any force or effect on the date on which the ,secretary of ,commerce revises section #gia4d of title #ae1 ,code of ,federal ,regulations1 to remove the ,people's ,republic of ,china from the list of foreign adversaries contained in such section4 ,i ,imposition of sanctions #aja4 ,imposition of sanctions 7a7 ,in general ,the ,president may impose the sanctions described in subsection 7b7 with respect to any foreign person determined by the ,secretary1 in consultation with the ,secretary of ,state1 to be a covered foreign person4 7b7 ,sanctions described ,the ,president may exercise all of the powers granted to the ,president under the ,international ,emergency ,economic ,powers ,act 7#ej ,u4,s4,c4 #agja et seq47 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 7a7 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 7c7 ,penalties ,the penalties provided for in subsections 7b7 and 7c7 of section #bjf of the ,international ,emergency ,economic ,powers ,act 7#ej ,u4,s4,c4 #agje7 shall apply to any person who violates1 attempts to violate1 conspires to violate1 or causes a violation of any prohibition of this section1 or an order or regulation prescribed under this section1 to the same extent that such penalties apply to a person that commits an unlawful act described in section #bjf7;a7 of such ,act 7#ej ,u4,s4,c4 #agje7;a774 7d7 ,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 #aidg 7#ej ,u4,s4,c4 #cjia et seq47 or any authorized intelligence activities of the ,united ,states4 7e7 ,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 employees1 grantees1 or contractors thereof4 7f7 ,report to ,congress ,not later than #cfe days after the date of the enactment of this ,act1 and annually thereafter for #g years1 the ,secretary shall submit to the appropriate congressional committees a report that-- 7#a7 states whether each foreign person on the ,non-,,sdn ,chinese ,military-,industrial ,complex ,companies ,list is a covered foreign person2 and 7#b7 shall be submitted in unclassified form1 but may include a classified annex4 7g7 ,consideration of certain information in imposing sanctions ,in determining whether a foreign person is a covered foreign person1 the ,president-- 7#a7 may consider credible information obtained by other countries1 nongovernmental organizations1 or the appropriate congressional committees that relates to the foreign person2 and 7#b7 may consider any other information that the ,secretary deems relevant4 7h7 ,administrative provisions ,the ,president may exercise all authorities provided under sections #bjc and #bje of the ,international ,emergency ,economic ,powers ,act 7#ej ,u4,s4,c4 #agjb and #agjd7 to carry out this section4 7i7 ,delegation ,the ,president shall delegate the authorities granted by this section to the ,secretary4 #ajb4 ,definitions ,in this title3 7#a7 ,appropriate congressional committees ,the term appropriate congressional committees means-- 7,a7 the ,committee on ,financial ,services and the ,committee on ,foreign ,affairs of the ,house of ,representatives2 and 7,b7 the ,committee on ,banking1 ,housing1 and ,urban ,affairs and the ,committee on ,foreign ,relations of the ,senate4 7#b7 ,country of concern ,the term country of concern-- 7,a7 means the ,people's ,republic of ,china2 and 7,b7 includes the ,hong ,kong ,special ,administrative ,region and the ,macau ,special ,administrative ,region4 7#c7 ,covered foreign person ,the term covered foreign person means a foreign person-- 7,a7 7i7 that is incorporated in1 has a principal place of business in1 or is organized under the laws of a country of concern2 7ii7 the equity securities of which are primarily traded in the ordinary course of business on one or more exchanges in a country of concern2 7iii7 that is a member of the ,central ,committee of the ,chinese ,communist ,party2 7iv7 that is the state or the government of a country of concern1 as well as any political subdivision1 agency1 or instrumentality thereof2 7v7 that is subject to the direction or control of any entity described in clause 7i71 7ii71 7iii71 or 7iv72 or 7vi7 that is owned in the aggregate1 directly or indirectly1 #ej percent or more by an entity or a group of entities described in clause 7i71 7ii71 7iii71 or 7iv72 and 7,b7 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 concern4 7#d7 ,foreign person ,the term foreign person means a person1 country1 state1 or government 7and any political subdivision1 agency1 or instrumentality thereof7 that is not a ,united ,states person4 7#e7 ,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 #aciei1 as amended by ,executive ,order #adjcb 7#ej ,u4,s4,c4 #agja note2 relating to addressing the threat from securities investments that finance certain companies of the ,people's ,republic of ,china71 or any successor order4 7#f7 ,united states person ,the term ,united ,states person means-- 7,a7 any ,united ,states citizen or an alien lawfully admitted for permanent residence to the ,united ,states2 7,b7 an entity organized under the laws of the ,united ,states or of any jurisdiction within the ,united ,states 7including any foreign branch of such an entity72 or 7,c7 any person in the ,united ,states4 ,,ii ,prohibition and notification on investments relating to covered national security transactions #bja4 ,prohibition and notification on investments relating to covered national security transactions ,the ,defense ,production ,act of #aiej 7#ej ,u4,s4,c4 #deja et seq47 is amended by adding at the end the following3 ,,viii ,prohibition and notification on investments relating to covered national security transactions #hja4 ,prohibition on investments 7a7 ,in general ,the ,secretary may prohibit1 in accordance with regulations issued under subsection 7e71 a ,united ,states person from knowingly engaging in a covered national security transaction in a prohibited technology4 7b7 ,evasion ,any transaction by a ,united ,states person or within the ,united ,states that evades or avoids1 has the purpose of evading or avoiding1 causes a violation of1 or attempts to violate the prohibition set forth in subsection 7a7 is prohibited4 7c7 ,waiver ,subject to subsection 7d71 the ,secretary is authorized to exempt from the prohibition set forth in subsection 7a7 any activity determined by the ,president1 in consultation with the ,secretary1 the ,secretary of ,commerce and1 as appropriate1 the heads of other relevant ,federal departments and agencies1 to be in the national interest of the ,united ,states4 7d7 ,congressional notification ,the ,secretary shall-- 7#a7 notify the appropriate congressional committees not later than #e business days after issuing a waiver under subsection 7c72 and 7#b7 include in such notification an identification of the national interest justifying the use of the waiver4 7e7 ,regulations 7#a7 ,in general ,the ,secretary1 in consultation with the ,secretary of ,commerce and1 as appropriate1 the heads of other relevant ,federal departments and agencies1 may issue regulations to carry out this section in accordance with subchapter ,,ii of chapter #e and chapter #g of title #e1 ,united ,states ,code 7commonly known as ,administrative ,procedure ,act74 7#b7 ,non-binding feedback 7,a7 ,in general ,the regulations issued under paragraph 7#a7 shall include a process 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 technology4 7,b7 ,authority to limit frivolous feedback requests ,in establishing the process required by subparagraph 7,a71 the ,secretary may prescribe limitations on requests for feedback identified as frivolous for purposes of this subsection4 7#c7 ,notice and opportunity to cure 7,a7 ,in general ,the regulations issued under paragraph 7#a7 shall account for whether a ,united ,states person has self-identified a violation of the prohibition set forth in subsection 7a7 in determining the legal consequences of that violation4 7,b7 ,self-disclosure letters ,the regulations issued under paragraph 7#a7 shall dictate the form and content of a letter of self-disclosure1 which shall include relevant facts about the violation1 why the ,united ,states person believes its activity to have violated the prohibition set forth in subsection 7a71 and a proposal for mitigation of the harm of such action4 7#d7 ,public notice and comment ,the regulations issued under paragraph 7#a7 shall be subject to public notice and comment4 7#e7 ,low-burden regulations ,in issuing regulations under paragraph 7#a71 the ,secretary shall balance the priority of protecting the national security interest of the ,united ,states while1 to the extent practicable-- 7,a7 minimizing the cost and complexity of compliance for affected parties1 including the duplication of reporting requirements under current regulations2 7,b7 adopting the least burdensome alternative that achieves regulatory objectives2 and 7,c7 prioritizing transparency and stakeholder involvement in the process of issuing the rules4 7#f7 ,penalties 7,a7 ,in general ,the regulations issued under paragraph 7#a7 shall provide for the imposition of civil penalties described in subparagraph 7,b7 for violations of the prohibition set forth in subsection 7a74 7,b7 ,penalties described 7i7 ,unlawful acts ,it shall be unlawful for a person to violate1 attempt to violate1 conspire to violate1 or cause a violation of any license1 order1 regulation1 notification requirement1 or prohibition issued under this section4 7ii7 ,civil penalty ,the ,secretary may impose a civil penalty on any person who commits an unlawful act described in clause 7i7 in an amount not to exceed the greater of-- 7,i7 #bej1jjj2 or 7,,ii7 an amount that is twice the amount of the transaction that is the basis of the violation with respect to which the penalty is imposed4 7iii7 ,divestment ,the ,secretary may compel the divestment of a covered national security transaction in a prohibited technology determined to be in violation of this title4 7iv7 ,relief ,the ,president may direct the ,attorney ,general of the ,united ,states to seek appropriate relief1 including divestment relief1 in the district courts of the ,united ,states1 in order to implement and enforce this title4 7#g7 ,burden of proof ,in accordance with section #eef7;d7 of title #e1 ,united ,states ,code1 in an enforcement action for a violation of the prohibition set forth in subsection 7a71 the burden of proof shall be upon the ,secretary4 #hjb4 ,notification on investments 7a7 ,mandatory notification ,not later than #dej days after the date of the enactment of this title1 the ,secretary shall issue regulations prescribed in accordance with subsection 7b71 to require a ,united ,states person that engages in a covered national security transaction in a prohibited technology 7unless the ,secretary has exercised the authority provided by section #hja7;a7 to prohibit knowingly engaging in such covered national security transaction7 or a notifiable technology to submit to the ,secretary a written notification of the transaction not later than #cj days after the completion date of the transaction4 7b7 ,regulations 7#a7 ,in general ,not later than #dej days after the date of the enactment of this title1 the ,secretary1 in consultation with the ,secretary of ,commerce and1 as appropriate1 the heads of other relevant ,federal departments and agencies1 shall issue regulations to carry out this section in accordance with subchapter ,,ii of chapter #e and chapter #g of title #e1 ,united ,states ,code 7commonly known as ,administrative ,procedure ,act74 7#b7 ,public notice and comment ,the regulations issued under paragraph 7#a7 shall be subject to public notice and comment4 7#c7 ,low-burden regulations ,in issuing regulations under paragraph 7#a71 the ,secretary shall balance the priority of protecting the national security interest of the ,united ,states while1 to the extent practicable-- 7,a7 minimizing the cost and complexity of compliance for affected parties1 including the duplication of reporting requirements under current regulation2 7,b7 adopting the least burdensome alternative that achieves regulatory objectives2 and 7,c7 prioritizing transparency and stakeholder involvement in the process of issuing the rules4 7#d7 ,penalties 7,a7 ,in general ,the regulations issued under paragraph 7#a7 shall provide for the imposition of civil penalties described in subparagraph 7,b7 for violations of the notification requirement set forth in subsection 7a74 7,b7 ,penalties described 7i7 ,unlawful acts ,it shall be unlawful for a person to violate1 attempt to violate1 conspire to violate1 or cause a violation of any license1 order1 regulation1 notification requirement1 or prohibition issued under this section4 7ii7 ,civil penalty ,a civil penalty may be imposed on any person who commits an unlawful act described in clause 7i7 in an amount not to exceed the greater of-- 7,i7 #bej1jjj2 or 7,,ii7 an amount that is twice the amount of the transaction that is the basis of the violation with respect to which the penalty is imposed4 7#e7 ,burden of proof ,in accordance with section #eef7;d7 of title #e1 ,united ,states ,code1 in an enforcement action for a violation of the prohibition set forth in subsection 7a71 the burden of proof shall be upon the ,secretary4 7#f7 ,completeness of notification 7,a7 ,in general ,the ,secretary shall1 upon receipt of a notification under subsection 7a71 and in consultation with the ,secretary of ,commerce1 promptly inspect the notification for completeness4 7,b7 ,incomplete notifications ,if a notification submitted under subsection 7a7 is incomplete1 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 complete4 7#g7 ,identification of non-notified activity ,the ,secretary1 in coordination with the ,secretary of ,commerce1 shall establish a process to identify covered national security transactions in a prohibited technology or a notifiable technology for which-- 7,a7 a notification is not submitted to the ,secretary under subsection 7a72 and 7,b7 information is reasonably available4 7c7 ,confidentiality of information 7#a7 ,in general ,except as provided in paragraph 7#b71 any information or documentary material filed with the ,secretary pursuant to this section shall be exempt from disclosure under section #eeb7;b77#c7 of title #e1 ,united ,states ,code1 and no such information or documentary material may be made public by any government agency or ,member of ,congress4 7#b7 ,exceptions ,the exemption from disclosure provided by paragraph 7#a7 shall not prevent the disclosure of the following3 7,a7 ,information relevant to any administrative or judicial action or proceeding4 7,b7 ,information provided to ,congress or any of the appropriate congressional committees4 7,c7 ,information important to the national security analysis or actions of the ,secretary to any domestic governmental entity1 or to any foreign governmental entity of an ally or partner of the ,united ,states1 under the direction and authorization of the ,secretary1 only to the extent necessary for national security purposes1 and subject to appropriate confidentiality and classification requirements4 7,d7 ,information that the parties have consented to be disclosed to third parties4 7,e7 ,information where the disclosure of such information is determined by the ,secretary to be in the national security interest4 7d7 ,inapplicability ,if the ,secretary prohibits a covered national security transaction in a prohibited technology under section #hja1 the requirements of this section shall not apply with respect to the covered national security transaction4 #hjc4 ,report 7a7 ,in general ,not later than one year after the date on which the regulations issued under section #hja7;e7 take effect1 and not less frequently than annually thereafter for #g years1 the ,secretary1 in consultation with the ,secretary of ,commerce1 shall submit to the appropriate congressional committees a report that-- 7#a7 lists all enforcement actions taken subject to the regulations during the year preceding submission of the report1 which includes1 with respect to each such action1 a description of-- 7,a7 the prohibited technology or notifiable technology2 7,b7 the covered national security transaction2 and 7,c7 the covered foreign person2 7#b7 provides an assessment of whether ,congress should amend the definition of the term prohibited technology by-- 7,a7 identifying additional technologies1 not currently listed as a prohibited technology1 that the ,secretary1 in consultation with the ,secretary of ,commerce and1 as applicable1 the ,secretary of ,defense1 the ,secretary of ,state1 the ,secretary of ,energy1 the ,director of ,national ,intelligence1 and the heads of any other relevant ,federal agencies1 determines may pose an acute threat to the national security of the ,united ,states if developed or acquired by a country of concern2 7,b7 explaining why each technology identified in subparagraph 7,a7 may pose an acute threat to the national security of the ,united ,states if developed or acquired by a country of concern2 and 7,c7 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 concern2 7#c7 lists all notifications submitted under section #hjb during the year preceding submission of the report and includes1 with respect to each such notification-- 7,a7 basic information on each party to the covered national security transaction with respect to which the notification was submitted2 and 7,b7 the nature of the covered national security transaction that was the subject to the notification1 including the elements of the covered national security transaction that necessitated a notification2 7#d7 includes a summary of those notifications1 disaggregated by prohibited technology1 notifiable technology1 by covered national security transaction1 and by country of concern2 7#e7 provides additional context and information regarding trends in the prohibited technology1 notifiable technology1 the types of covered national security transaction1 and the countries involved in those notifications2 and 7#f7 assesses the overall impact of those notifications1 including recommendations for-- 7,a7 expanding existing ,federal programs to support the production or supply of prohibited technologies or notifiable technologies in the ,united ,states1 including the potential of existing authorities to address any related national security concerns2 7,b7 investments needed to enhance prohibited technologies or notifiable technologies and reduce dependence on countries of concern regarding those technologies2 and 7,c7 the continuation1 expansion1 or modification of the implementation and administration of this title1 including recommendations with respect to whether the definition of the term #8country of concern' under section #hjg7b7 should be amended to add or remove countries4 7b7 ,consideration of certain information ,in preparing the report pursuant to subsection 7a71 the ,secretary-- 7#a7 shall consider information provided jointly by the chairperson and ranking member of any of the appropriate congressional committees2 7#b7 may consider credible information obtained by other countries and nongovernmental organizations that monitor the military1 surveillance1 intelligence1 or technology capabilities of a country of concern2 and 7#c7 may consider any other information that the ,secretary deems relevant4 7c7 ,form of report ,each report required by this section shall be submitted in unclassified form1 but may include a classified annex4 7d7 ,testimony required ,not later than one year after the date of the enactment of this title1 and annually thereafter for five years1 the ,secretary and the ,secretary of ,commerce shall each provide to the ,committee on ,banking1 ,housing1 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 flows4 7e7 ,requests by appropriate congressional committees 7#a7 ,in general ,after receiving a request that meets the requirements of paragraph 7#b7 with respect to whether a technology should be included in the amendments as described in subsection 7a77#b71 the ,secretary shall1 in preparing the report pursuant to subsection 7a7-- 7,a7 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 concern2 and 7,b7 include in the report pursuant to subsection 7a7 an explanation with respect to that determination that includes-- 7i7 a statement of whether or not the technology1 as determined by the ,secretary1 may pose an acute threat to the national security of the ,united ,states if developed or acquired by a country of concern2 and 7ii7 if the ,secretary determines that-- 7,i7 the technology may pose an acute threat to the national security of the ,united ,states if developed or acquired by a country of concern1 an explanation for such determination and a recommendation whether that technology should be named a prohibited technology or a notifiable technology2 and 7,,ii7 the technology would not pose an acute threat to the national security of the ,united ,states if developed or acquired by a country of concern1 an explanation for such determination4 7#b7 ,requirements ,a request under paragraph 7#a7 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 committees4 #hjd4 ,multilateral engagement and coordination 7a7 ,authorities ,the ,secretary1 in coordination with the ,secretary of ,state1 the ,secretary of ,commerce1 and the heads of other relevant ,federal agencies1 should-- 7#a7 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 title2 7#b7 upon adoption of protocols and procedures described in paragraph 7#a71 work with those governments to establish mechanisms for sharing information1 including trends1 with respect to such activities2 and 7#c7 work with and encourage the governments of countries that are allies and partners of the ,united ,states to develop similar mechanisms of their own1 for the exclusive purpose of preventing the development or acquisition of prohibited technologies by a country of concern4 7b7 ,strategy for multilateral engagement and coordination ,not later than #ahj days after the date of the enactment of this title1 the ,secretary1 in consultation with the ,secretary of ,state1 the ,secretary of ,commerce1 and the heads of other relevant ,federal agencies1 should-- 7#a7 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 title1 for the exclusive purpose of preventing the development and acquisition of prohibited technologies by a country of concern2 and 7#b7 assess opportunities to provide technical assistance to those countries with respect to the development of those mechanisms4 7c7 ,report ,not later than one year after the date of the enactment of this title1 and annually thereafter for four years1 the ,secretary shall submit to the appropriate congressional committees a report that includes-- 7#a7 a discussion of any strategy developed pursuant to subsection 7b77#a71 including key tools and objectives for the development of comparable mechanisms by the governments of allies and partners of the ,united ,states2 7#b7 a list of partner and allied countries to target for cooperation in developing their own prohibitions2 7#c7 the status of the strategy's implementation and outcomes2 and 7#d7 a description of impediments to the establishment of comparable mechanisms by governments of allies and partners of the ,united ,states4 7d7 ,appropriate congressional committees defined ,in this section1 the term appropriate congressional committees means-- 7#a7 the ,committee on ,foreign ,relations and the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate2 and 7#b7 the ,committee on ,foreign ,affairs and the ,committee on ,financial ,services of the ,house of ,representatives4 #hje4 ,public database of covered foreign persons 7a7 ,in general ,the ,secretary1 in consultation with the ,secretary of ,commerce1 may establish a publicly accessible1 non-exhaustive database that identifies covered foreign persons in a prohibited technology pursuant to this title4 7b7 ,confidentiality of evidence ,the ,secretary shall establish a mechanism for the public1 including ,congress1 stakeholders1 investors1 and nongovernmental organizations1 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 7a71 if any4 7c7 ,exemption from disclosure 7#a7 ,in general ,except as provided in paragraph 7#b71 any information or documentary material filed with the ,secretary pursuant to this section shall be exempt from disclosure under section #eeb7;b77#c7 of title #e1 ,united ,states ,code1 and no such information or documentary material may be made public 7other than the identity of a covered foreign person in accordance with subsection 7b774 7#b7 ,exceptions ,paragraph 7#a7 shall not prohibit the disclosure of the following3 7,a7 ,information relevant to any administrative or judicial action or proceeding4 7,b7 ,information to ,congress or any duly authorized committee or subcommittee of ,congress4 7,c7 ,information important to the national security analysis or actions of the ,secretary to any domestic governmental entity1 or to any foreign governmental entity of a ,united ,states ally or partner1 under the exclusive direction and authorization of the ,secretary1 only to the extent necessary for national security purposes1 and subject to appropriate confidentiality and classification requirements4 7,d7 ,information that the parties have consented to be disclosed to third parties4 7d7 ,rule of construction ,the database described in subsection 7a71 if any1 shall not be considered to be an exhaustive or comprehensive list of covered foreign persons for the purposes of this title4 #hjf4 ,rule of construction ,nothing in this title may be construed to negate the authority of the ,president under any authority1 process1 regulation1 investigation1 enforcement measure1 or review provided by or established under any other provision of ,federal law1 or any other authority of the ,president or the ,congress under the ,constitution of the ,united ,states4 #hjg4 ,definitions ,in this title3 7#a7 ,appropriate congressional committees ,except as provided by section #hjd7;d71 the term appropriate congressional committees means-- 7,a7 the ,committee on ,financial ,services1 the ,committee on ,foreign ,affairs1 the ,committee on ,energy and ,commerce1 and the ,committee on ,appropriations of the ,house of ,representatives2 and 7,b7 the ,committee on ,banking1 ,housing1 and ,urban ,affairs and the ,committee on ,appropriations of the ,senate4 7#b7 ,country of concern ,the term country of concern-- 7,a7 means the ,people's ,republic of ,china2 and 7,b7 includes the ,hong ,kong ,special ,administrative ,region and the ,macau ,special ,administrative ,region4 7#c7 ,covered foreign person ,subject to regulations prescribed in accordance with this title1 the term covered foreign person means a foreign person that-- 7,a7 is incorporated in1 has a principal place of business in1 or is organized under the laws of a country of concern2 7,b7 is a member of the ,central ,committee of the ,chinese ,communist ,party2 7,c7 is subject to the direction or control of a country of concern1 an entity described in subparagraph 7,a7 or 7,b71 or the state or the government of a country of concern 7including any political subdivision1 agency1 or instrumentality thereof72 or 7,d7 is owned in the aggregate1 directly or indirectly1 #ej percent or more by a country of concern1 an entity described in subparagraph 7,a7 or 7,b71 or the state or the government of a country of concern 7including any political subdivision1 agency1 or instrumentality thereof74 7#d7 ,covered national security transaction 7,a7 ,in general ,subject to such regulations as may be issued in accordance with this title1 the term covered national security transaction means any activity engaged in by a ,united ,states person that involves-- 7i7 the acquisition of an equity interest or contingent equity interest in a covered foreign person2 7ii7 the provision of a loan or similar debt financing arrangement to a covered foreign person1 where such debt financing-- 7,i7 is convertible to an equity interest2 or 7,,ii7 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 7or equivalent7 of the covered foreign person2 7iii7 the entrance by such ,united ,states person into a joint venture with a covered foreign person2 7iv7 the conversion of a contingent equity interest 7or interest equivalent to a contingent equity interest7 or conversion of debt to an equity interest in a covered foreign person2 7v7 the acquisition1 leasing1 or other development of operations1 land1 property1 or other assets in a country of concern that will result in1 or that the ,united ,states person intends to result in-- 7,i7 the establishment of a covered foreign person2 or 7,,ii7 the engagement of a person of a country of concern in a prohibited technology where it was not previously engaged in such prohibited technology2 7vi7 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 7i71 7ii71 7iii71 7iv71 or 7v71 if engaged in by a ,united ,states person2 or 7vii7 the acquisition of a limited partner or equivalent interest in a venture capital fund1 private equity fund1 fund of funds1 or other pooled investment fund that the ,united ,states person has knowledge at the time of the acquisition1 intends to engage in an activity described in clause 7i71 7ii71 7iii71 7iv71 7v71 or 7vi74 7,b7 ,exceptions ,subject to notice and comment regulations prescribed in consultation with ,congress and in accordance with this title1 the term covered national security transaction does not include-- 7i7 any transaction the value of which the ,secretary determines is de minimis2 7ii7 any category of transactions that the ,secretary determines is in the national interest of the ,united ,states2 7iii7 an investment-- 7,i7 in a security 7as defined in section #c7;a7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a777 that is traded on an exchange or the over-the-counter market in any jurisdiction2 7,,ii7 in a security issued by an investment company 7as defined in section #c of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#c77 that is registered with the ,securities and ,exchange ,commission2 7,,iii7 made as a limited partner or equivalent in a venture capital fund1 private equity fund1 fund of funds1 or other pooled investment fund 7other than as described in subclause 7,,ii77 where-- 7aa7 the limited partner or equivalent's committed capital is not more than #b1jjj1jjj1 aggregated across any investment and co-investment vehicles of the fund2 or 7bb7 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 person2 or 7,,iv7 in a derivative of a security described under subclause 7,i71 7,,ii71 or 7,,iii72 7iv7 any ancillary transaction undertaken by a financial institution 7as defined in section #ecab of title #ca1 ,united ,states ,code72 7v7 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 person2 7vi7 an intracompany transfer of funds1 as defined in regulations prescribed in accordance with this title1 from a ,united ,states parent company to a subsidiary located in a country of concern or a transaction that1 but for this clause1 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 #b1 #bjbe2 7vii7 a transaction secondary to a covered national security transaction1 including-- 7,i7 contractual arrangements or the procurement of material inputs for any covered national security transaction 7such as raw materials72 7,,ii7 bank lending2 7,,iii7 the processing1 clearing1 or sending of payments by a bank2 7,,iv7 underwriting services2 7,v7 debt rating services2 7,,vi7 prime brokerage2 7,,vii7 global custody2 7,,viii7 equity research or analysis2 or 7,,ix7 other similar services2 7viii7 any ordinary or administrative business transaction as may be defined in such regulations2 or 7ix7 any transaction completed before the date of the enactment of this title4 7,c7 ,ancillary transaction defined ,in this paragraph1 the term ancillary transaction means-- 7i7 the processing1 settling1 clearing1 or sending of payments and cash transactions2 7ii7 underwriting services2 7iii7 credit rating services2 and 7iv7 other services ordinarily incident to and part of the provision of financial services1 such as opening deposit accounts1 direct custody services1 foreign exchange services1 remittances services1 and safe deposit services4 7#e7 ,foreign person ,the term foreign person means a person that is not a ,united ,states person4 7#f7 ,notifiable technology 7,a7 ,in general ,the term notifiable technology means a technology with respect to which a covered foreign person-- 7i7 designs any advanced integrated circuit that is not covered under paragraph 7#h77;,a77iii72 7ii7 fabricates any integrated circuit that is not covered under paragraph 7#h77;,a77iv72 7iii7 packages any integrated circuit that is not covered under paragraph 7#h77;,a77v72 or 7iv7 develops any artificial intelligence system that is not covered under clause 7vii71 7viii71 7ix71 or 7xvi7 of paragraph 7#h77;,a71 and that is-- 7,i7 designed to be used for-- 7aa7 any military end use 7such as for weapons targeting1 target identification1 combat simulation1 military vehicle or weapons control1 military decision-making1 weapons design 7including chemical1 biological1 radiological1 or nuclear weapons71 or combat system logistics and maintenance72 or 7bb7 any government intelligence or mass-surveillance end use 7such as through incorporation of features such as mining text1 audio1 or video1 image recognition1 location tracking1 or surreptitious listening devices72 7,,ii7 intended by the covered foreign person or joint venture to be used for-- 7aa7 cybersecurity applications2 7bb7 digital forensics tools2 7cc7 penetration testing tools2 or 7dd7 control of robotic systems2 or 7,,iii7 trained using a quantity of computing power greater than #ajbc computational operations 7such as integer or floating-point operations74 7,b7 ,updates ,the ,secretary1 in consultation with ,congress1 may prescribe regulations in accordance with this title to refine the technical parameters of technologies described in subparagraph 7,a7 as reasonably needed for national security purposes or to add or remove categories to or from the list in subparagraph 7,a74 7#g7 ,party ,the term #8party'1 with respect to a covered national security transaction1 has the meaning given that term in regulations prescribed in accordance with this title4 7#h7 ,prohibited technology 7,a7 ,in general ,the term prohibited technology means a technology with respect to which a covered foreign person-- 7i7 develops or produces any design automation software for the design of integrated circuits or advanced packaging2 7ii7 develops or produces any-- 7,i7 electronic design automation software for the design of integrated circuits or advanced packaging2 7,,ii7 front-end semiconductor fabrication equipment designed for the volume fabrication of integrated circuits1 including equipment used in the production stages from a blank wafer or substrate to a completed wafer or substrate2 or 7,,iii7 equipment for performing volume advanced packaging2 7iii7 designs any integrated circuit designs that meet or exceed the specifications set in ,export ,control ,classification ,number 7,,eccn7 #c;,a#jij in ,supplement ,no4 #a to the ,export ,administration ,regulations1 or integrated circuits designed for operation at or below #d4e ,kelvin2 7iv7 fabricates integrated circuits that are-- 7,i7 logic integrated circuits using a non-planar transistor architecture or with a technology node of #af_/ad nanometers or less1 including fully depleted silicon-on-insulator 7,,fdsoi7 integrated circuits2 7,,ii7 ,,not-,,and 7,,nand7 memory integrated circuits with #abh layers or more2 7,,iii7 dynamic random-access memory 7,,dram7 integrated circuits using a technology node of #ah nanometer half-pitch or less2 7,,iv7 integrated circuits manufactured from a gallium-based compound semiconductor2 7,v7 integrated circuits using graphene transistors or carbon nanotubes2 or 7,,vi7 integrated circuits designed for operation at or below #d4e ,kelvin2 7v7 packages any integrated circuit using advanced packaging techniques2 7vi7 develops1 designs1 or produces any commodity1 material1 software1 or technology designed exclusively for use in or with extreme ultraviolet lithography fabrication equipment2 7vii7 develops1 designs1 or produces any artificial intelligence models trained with at least #ajbe floating point operations2 7viii7 develops1 designs1 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 7,,eccn7 #c;,a#jij in ,supplement ,no4 #a to the ,export ,administration ,regulations2 7ix7 develops1 designs1 or produces any artificial intelligence models designed for use by the ,government of the ,people's ,republic of ,china1 its special administrative regions1 or its agencies and instrumentalities2 7x7 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 cryocooler2 7xi7 develops or produces any quantum sensing platform designed for1 or which the relevant covered foreign person intends to be used for1 any military1 government intelligence1 or mass-surveillance end use2 7xii7 develops or produces quantum networks or quantum communication systems designed for or intended to be used for-- 7,i7 networking to scale up the capabilities of quantum computers1 such as for the purposes of breaking or compromising encryption2 7,,ii7 secure communications1 such as quantum key distribution2 or 7,,iii7 any other application that has any military1 government intelligence1 or mass-surveillance end use2 7xiii7 develops1 designs1 or produces materials1 components1 avionics1 flight control1 propulsion1 ,global ,positioning ,system 7,,gps71 data relay1 and target detection systems designed for use in hypersonic systems or capable of sustainable operations above #a1jjj degrees ,celsius2 7xiv7 develops1 installs1 sells1 or produces any supercomputer enabled by advanced integrated circuits that can provide theoretical compute capacity of #ajj or more double-precision 7#fd-;bit7 petaflops or #bjj or more single-precision 7#cb-;bit7 petaflops of processing power within a #da1fjj cubic foot or smaller envelope2 7xv7 develops1 designs1 or produces any other technologies in the advanced semiconductors and microelectronics sector1 the artificial intelligence sector1 the high-performance computing and supercomputing sector1 the hypersonic missiles sector1 or the quantum information science and technology sector that are-- 7,i7 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 #bb1 ,code of ,federal ,regulations2 7,,ii7 specially designed and prepared nuclear equipment1 parts or components1 materials1 software1 or technologies covered by part #haj of title #aj1 ,code of ,federal ,regulations 7relating to assistance to foreign atomic energy activities72 7,,iii7 nuclear facilities1 equipment1 or materials covered by part #aaj of title #aj1 ,code of ,federal ,regulations 7relating to export and import of nuclear equipment and material72 or 7,,iv7 emerging or foundational technologies controlled pursuant to section #ageh of the ,export ,control ,reform ,act of #bjah 7#ej ,u4,s4,c4 #dhag72 or 7xvi7 develops any artificial intelligence system that is designed to be exclusively used for1 or which the relevant covered foreign person intends to be used for1 any-- 7,i7 military end use 7such as for weapons targeting1 target identification1 combat simulation1 military vehicle or weapon control1 military decision-making1 weapons design 7including chemical1 biological1 radiological1 or nuclear weapons71 or combat system logistics and maintenance72 or 7,,ii7 government intelligence or mass-surveillance end 7such as through incorporation of features such as mining text1 audio1 or video1 image recognition1 location tracking1 or surreptitious listening devices74 7,b7 ,updates ,the ,secretary1 in consultation with ,congress1 may prescribe regulations in accordance with this title to make updates to the technical parameters of technologies described in subparagraph 7,a7 as reasonably needed for national security purposes4 7#i7 ,secretary ,except as otherwise provided1 the term ,secretary means the ,secretary of the ,treasury4 7#aj7 ,united ,states person ,the term ,united ,states person means-- 7,a7 any ,united ,states citizen or an alien lawfully admitted for permanent residence to the ,united ,states2 7,b7 an entity organized under the laws of the ,united ,states or of any jurisdiction within the ,united ,states 7including any foreign branch of such an entity72 or 7,c7 any person in the ,united ,states4 4 ,,iii ,securities and related matters #cja4 ,requirements relating to the ,non-,,sdn ,chinese ,military-,industrial ,complex ,companies ,list 7a7 ,report 7#a7 ,in general ,not later than #cfe days after the date of the enactment of this ,act1 and biennially thereafter for #f years1 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 ,list3 7,a7 ,any ,,prc person listed on the ,military ,end-,user ,list 7,supplement ,no4 #g to part #gdd of the ,export ,administration ,regulations74 7,b7 ,any ,,prc person listed pursuant to section #abfj;,h of the ,william ,m4 7,mac7 ,thornberry ,national ,defense ,authorization ,act for ,fiscal ,year #bjba 7#aj ,u4,s4,c4 #aac note74 7,c7 ,any ,,prc person listed on the ,department of ,commerce's ,entity ,list 7,supplement ,no4 #d to part #gdd of the ,export ,administration ,regulations74 7#b7 ,process required ,to prepare the reports under paragraph 7#a71 the ,president shall establish a process under which the ,federal agencies responsible for administering the lists described in subparagraphs 7,a71 7,b71 and 7,c7 of paragraph 7#a7 shall share with each other all relevant information that led to the identification of the entities described in such lists4 7#c7 ,risk-based prioritization framework ,in making the initial determinations under paragraph 7#a71 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 7,a71 7,b71 and 7,c7 of paragraph 7#a74 7#d7 ,annual reports to the appropriate congressional committees ,the report under paragraph 7#a7 may summarize findings concerning entities previously reviewed pursuant to this section and do not necessitate additional review by the ,secretary4 7#e7 ,matters to be included ,the ,secretary shall include in the report required by paragraph 7#a7 an overview of the criteria required for listing on ,non-,,sdn ,chinese ,military-,industrial ,complex ,companies ,list4 ,the heads of the ,federal agencies administering the lists described in subparagraphs 7,a71 7,b71 and 7,c7 of paragraph 7#a7 shall provide an overview of the criteria for entity identification or listing on each respective list4 7b7 ,requirement for divestment 7#a7 ,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 ,list1 after the date that is #cfe days after the date of enactment of this ,act4 7#b7 ,authorization ,the prohibitions on investment imposed under paragraph 7#a7 shall not apply to a transaction in a security that is entered into on or before the date that is #cfe days after the date of enactment of this ,act by a ,united ,states person1 if such transaction is entered into solely to divest of the security4 7c7 ,waiver 7#a7 ,in general ,the ,president may establish a process under which the requirements of subsection 7b7 shall not apply if the ,president determines to do so is necessary to protect the national security or foreign policy objectives of the ,united ,states4 7#b7 ,case-by-case requirement ,determinations under paragraph 7#a7 shall be issued on a case-by-case basis for each entity on the ,non-,,sdn ,chinese ,military-,industrial ,complex ,companies ,list4 7#c7 ,notice and briefing ,the ,president shall notify the appropriate congressional committees in writing in advance of issuing a determination under paragraph 7#a7 and shall provide a substantive briefing on the determination to the appropriate congressional committees within #cj days of issuing a determination4 7d7 ,definitions ,in this section3 7#a7 ,appropriate congressional committees ,the term appropriate congressional committees means-- 7,a7 the ,committee on ,financial ,services and the ,committee on ,foreign ,affairs of the ,house of ,representatives2 and 7,b7 the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate4 7#b7 ,country of concern ,the term country of concern-- 7,a7 means the ,people's ,republic of ,china2 and 7,b7 includes the ,hong ,kong ,special ,administrative ,region and the ,macau ,special ,administrative ,region4 7#c7 ,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 #aciei1 as amended by ,executive ,order #adjcb 7#ej ,u4,s4,c4 #agja note2 relating to addressing the threat from securities investments that finance certain companies of the ,people's ,republic of ,china71 and any successor order4 7#d7 ,,prc person ,the term ,,prc person means a foreign person that-- 7,a7 is incorporated in a principal place of business in1 or is organized under the laws of1 a country of concern2 7,b7 is a member of the ,central ,committee of the ,chinese ,communist ,party2 7,c7 is the state or the government of a country of concern1 as well as any political subdivision1 agency1 or instrumentality thereof2 or 7,d7 is owned in the aggregate1 directly or indirectly1 #ej percent or more by an entity or a group of entities described in subparagraph 7,a71 7,b71 or 7,c74