What This Bill Does
This bill orders the President to impose tough economic penalties against Chinese military and surveillance companies. The penalties would block almost all financial dealings between these companies and American people or entities. The bill applies to companies already identified by other government processes and those the Treasury Secretary determines are involved in military or surveillance activities.
Who It Affects
Chinese military companies and surveillance companies listed in prior government orders, foreign companies engaged in Chinese military or surveillance work, American people or businesses that conduct transactions with these companies, the Department of Treasury (through its Office of Foreign Assets Control), and Congress.
Key Provisions
• The President must impose sanctions within 180 days after receiving an updated list of Chinese military companies, blocking all property and financial transactions involving these companies if certain evidentiary standards are met (Sec. 3(a))
• Sanctions block all transactions involving property located in the United States, coming into the United States, or under control of American persons connected to designated companies (Sec. 3(b))
• The President may skip imposing sanctions if he certifies to Congress in writing that doing so serves the national interest, with explanation of reasons (Sec. 3(d))
• Sanctions do not apply to authorized intelligence activities of the United States government (Sec. 3(e))
• Sanctions do not apply to importing goods into the United States (Sec. 3(f))
What Changes
Chinese military and surveillance companies would face broader restrictions beyond what currently exists. Under prior orders, only publicly traded securities (stocks and bonds) were restricted. This bill expands penalties to block all types of financing, business transactions, and property dealings between these companies and Americans. The President must revoke any older restrictions that become unnecessary because of these new, broader sanctions.
Important Definitions
The bill defines "good" as any article, substance, material, supply or manufactured product, including inspection and test equipment, but not including technical data (Sec. 3(f)(2)).
Effective Date
The President must impose sanctions within 180 days after the first updated list is submitted under the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 on or after this law is enacted (Sec. 3(a)). All sanctions expire on whichever comes first: 30 days after the President cancels the national emergency under Executive Order 13959 or 7 years after this law is enacted (Sec. 3(i)).
I
118TH CONGRESS
1ST SESSION
H. R. 760
To impose sanctions with respect to Communist Chinese military and
surveillance companies.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 2, 2023
Mr. BARR introduced the following bill; which was referred to the Committee
on Foreign Affairs, and in addition to the Committee on Financial Serv-
ices, for a period to be subsequently determined by the Speaker, in each
case for consideration of such provisions as fall within the jurisdiction of
the committee concerned
A BILL
To impose sanctions with respect to Communist Chinese
military and surveillance companies.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Chinese Military and
4
Surveillance Company Sanctions Act of 2023’’.
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SEC. 2. FINDINGS AND SENSE OF CONGRESS.
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(a) FINDINGS.—Congress finds the following:
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(1) Under Executive Order 13959 (85 Fed.
8
Reg. 73185; relating to addressing the threat from
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•HR 760 IH
securities investments that finance Communist Chi-
1
nese military companies) of November 17, 2020, the
2
President found that the People’s Republic of China
3
‘‘increases the size of the country’s military-indus-
4
trial complex by compelling civilian Chinese compa-
5
nies to support its military and intelligence activi-
6
ties. Those companies, though remaining ostensibly
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private and civilian, directly support the PRC’s mili-
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tary, intelligence, and security apparatuses and aid
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in their development and modernization.’’. The
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President further determined that ‘‘the PRC exploits
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United States investors to finance the development
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and modernization of its military.’’. As a result, Ex-
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ecutive Order 13959 restricted transactions in pub-
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licly traded securities of Communist Chinese military
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companies listed pursuant to section 1237 of the
16
Strom Thurmond National Defense Authorization
17
Act for Fiscal Year 1999 (50 U.S.C. 1701 note).
18
(2) Although Executive Order 13959 targets
19
transactions in public securities, it does not address
20
financing options for Communist Chinese military
21
companies through other forms of equity financing
22
or debt financing, nor does it limit transactions with
23
United States persons that may generate earnings in
24
a manner that facilitates company growth.
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•HR 760 IH
(3) The Office of Foreign Assets Control
1
(OFAC) of the Department of the Treasury, by im-
2
posing asset blocking through the Specially Des-
3
ignated Nationals (SDN) List, is able to forbid vir-
4
tually any transaction between United States per-
5
sons and a designated entity, including debt and eq-
6
uity financing, the exchange of goods and services,
7
and the provision of material or technological sup-
8
port. Conversely, restrictions limited to publicly trad-
9
ed securities are less comprehensive, and in the case
10
of certain Chinese companies of concern, may be ir-
11
relevant if the companies do not issue such securi-
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ties.
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(4) While restrictions on public securities are
14
restricted to the dealings of United States persons,
15
OFAC’s inclusion of a foreign entity on the SDN list
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deters third-country persons from dealing with a
17
designated entity, amplifying the effects of United
18
States sanctions globally.
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(5) OFAC has long devoted significant re-
20
sources to compiling evidence on SDNs that rou-
21
tinely withstand challenges in court, which enhances
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the effectiveness of United States sanctions, encour-
23
ages allies to consider comparable measures, and
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strengthens national security.
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•HR 760 IH
(6) On June 3, 2021, the President issued Ex-
1
ecutive Order 14032, which transferred responsi-
2
bility for naming Chinese military companies subject
3
to investment restrictions to the Secretary of the
4
Treasury, and expanded restrictions to entities oper-
5
ating in the surveillance technology sector of the
6
Chinese economy.
7
(b) SENSE OF CONGRESS.—It is the sense of the
8
Congress that the national emergency declared under Ex-
9
ecutive Order 13959 calls for the President to—
10
(1) more fully cut off financing avenues for
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Communist Chinese military and surveillance compa-
12
nies;
13
(2) prevent adaptation by a company to partial
14
restrictions that limit themselves to publicly traded
15
securities;
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(3) ensure that the United States assembles an
17
appropriate evidentiary basis to support the effec-
18
tiveness of sanctions;
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(4) enhance the impact of economic sanctions
20
by deterring third-country persons from dealing with
21
the companies; and
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(5) link the imposition of sanctions to clear ob-
23
jectives that serve to resolve the national emergency.
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•HR 760 IH
SEC. 3. SANCTIONS WITH RESPECT TO COMMUNIST CHI-
1
NESE MILITARY AND SURVEILLANCE COMPA-
2
NIES.
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(a) IN GENERAL.—Not later than 180 days after the
4
date on which the first updated list is submitted under
5
section 1260H of the William M. (Mac) Thornberry Na-
6
tional Defense Authorization Act for Fiscal Year 2021 (10
7
U.S.C. 113 note) on or after the date of the enactment
8
of this Act, the President shall impose the sanctions de-
9
scribed in subsection (b) with respect to—
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(1) each person that is on such updated list,
11
and
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(2) each foreign person listed in the Annex to
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Executive Order 14032 (86 Fed. Reg. 30145; relat-
14
ing to addressing the threat from securities invest-
15
ments that finance certain companies of the People’s
16
Republic of China) of June 3, 2021, or determined
17
by the Secretary of the Treasury, in consultation
18
with the Secretary of State, and, as the Secretary of
19
the Treasury determines appropriate, the Secretary
20
of Defense, to engage in the activities described
21
under section 1(a)(i) or 1(a)(ii) of such Executive
22
Order 14032,
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if the President determines that the imposition of such
24
sanctions meets appropriate evidentiary standards and ad-
25
vances the objective of resolving the national emergency
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•HR 760 IH
described in Executive Order 14032 (86 Fed. Reg. 30145;
1
relating to addressing the threat from securities invest-
2
ments that finance certain companies of the People’s Re-
3
public of China) of June 3, 2021.
4
(b) SANCTIONS DESCRIBED.—The President shall ex-
5
ercise all of the powers granted to the President under
6
the International Emergency Economic Powers Act (50
7
U.S.C. 1701 et seq.) to the extent necessary to block and
8
prohibit all transactions in property and interests in prop-
9
erty of a person if such property and interests in prop-
10
erty—
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(1) are in the United States;
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(2) come within the United States; or
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(3) come within the possession or control of a
14
United States person.
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(c) PENALTIES.—The penalties set forth in section
16
206 of the International Emergency Economic Powers Act
17
(50 U.S.C. 1705) apply to violations of any license, order,
18
or regulation issued under this section.
19
(d) WAIVER.—The President may waive the applica-
20
tion of sanctions under this section if the President cer-
21
tifies in writing to the appropriate congressional commit-
22
tees that the waiver is in the national interest of the
23
United States, with an explanation of the reasons therefor.
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•HR 760 IH
(e) EXCEPTION FOR INTELLIGENCE ACTIVITIES.—
1
Sanctions under this section shall not apply to any activity
2
subject to the reporting requirements under title V of the
3
National Security Act of 1947 (50 U.S.C. 3091 et seq.)
4
or any authorized intelligence activities of the United
5
States.
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(f) EXCEPTION RELATING
TO IMPORTATION
OF
7
GOODS.—
8
(1) IN GENERAL.—The authorities and require-
9
ments to impose sanctions authorized under this sec-
10
tion shall not include the authority or requirement
11
to impose sanctions on the importation of goods.
12
(2) GOOD
DEFINED.—In this subsection, the
13
term ‘‘good’’ means any article, natural or manmade
14
substance, material, supply, or manufactured prod-
15
uct, including inspection and test equipment, and ex-
16
cluding technical data.
17
(g) CONFORMING REQUIREMENT.—Not later than
18
180 days after the date of the enactment of this Act, the
19
President shall revoke the prohibitions described in section
20
1(a) of Executive Order 14032 that are duplicative of, less
21
restrictive than, or are otherwise made redundant by, the
22
sanctions described in this section.
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•HR 760 IH
(h) APPROPRIATE
CONGRESSIONAL
COMMITTEES
1
DEFINED.—In this section, the term ‘‘appropriate con-
2
gressional committees’’ means—
3
(1) the Committee on Foreign Affairs and the
4
Committee on Financial Services of the House of
5
Representatives; and
6
(2) the Committee on Foreign Relations and
7
the Committee on Banking, Housing, and Urban Af-
8
fairs of the Senate.
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(i) SUNSET.—The authority to impose sanctions
10
under this section, and any sanctions imposed under this
11
section, shall terminate on the earlier of—
12
(1) the date that is 30 days after the date on
13
which the President repeals the national emergency
14
declared under Executive Order 13959 (85 Fed.
15
Reg. 73185); or
16
(2) the date that is 7 years after the date of the
17
enactment of this Act.
18
Æ
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