South China Sea and East China Sea Sanctions Act of 2021

II Calendar No. 158 117TH CONGRESS 1ST SESSION S. 1657 To impose sanctions with respect to the People’s Republic of China in relation to activities in the South China Sea and the East China Sea, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 17, 2021 Mr. RUBIO (for himself, Mr. CARDIN, and Mr. BARRASSO) introduced the fol- lowing bill; which was read twice and referred to the Committee on For- eign Relations OCTOBER 28, 2021 Reported by Mr. MENENDEZ, with an amendment [Strike out all after the enacting clause and insert the part printed in italic] A BILL To impose sanctions with respect to the People’s Republic of China in relation to activities in the South China Sea and the East China Sea, and for other purposes. 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 ‘‘South China Sea and 4 East China Sea Sanctions Act of 2021’’. 5 VerDate Sep 11 2014 00:26 Oct 29, 2021 Jkt 029200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6401 E:\BILLS\S1657.RS S1657 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 1657 RS SEC. 2. DEFINITIONS. 1 In this Act: 2 (1) ACCOUNT; CORRESPONDENT ACCOUNT; PAY- 3 ABLE-THROUGH ACCOUNT.—The terms ‘‘account’’, 4 ‘‘correspondent account’’, and ‘‘payable-through ac- 5 count’’ have the meanings given those terms in sec- 6 tion 5318A of title 31, United States Code. 7 (2) ALIEN.—The term ‘‘alien’’ has the meaning 8 given that term in section 101(a) of the Immigration 9 and Nationality Act (8 U.S.C. 1101(a)). 10 (3) APPROPRIATE COMMITTEES OF CON- 11 GRESS.—The term ‘‘appropriate committees of Con- 12 gress’’ means— 13 (A) the Committee on Foreign Relations, 14 the Committee on Armed Services, the Com- 15 mittee on Banking, Housing, and Urban Af- 16 fairs, and the Select Committee on Intelligence 17 of the Senate; and 18 (B) the Committee on Foreign Affairs, the 19 Committee on Armed Services, the Committee 20 on Financial Services, and the Permanent Se- 21 lect Committee on Intelligence of the House of 22 Representatives. 23 (4) CHINESE PERSON.—The term ‘‘Chinese 24 person’’ means— 25 VerDate Sep 11 2014 00:26 Oct 29, 2021 Jkt 029200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6401 E:\BILLS\S1657.RS S1657 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 1657 RS (A) an individual who is a citizen or na- 1 tional of the People’s Republic of China; or 2 (B) an entity organized under the laws of 3 the People’s Republic of China or otherwise 4 subject to the jurisdiction of the Government of 5 the People’s Republic of China. 6 (5) FINANCIAL INSTITUTION.—The term ‘‘fi- 7 nancial institution’’ means a financial institution 8 specified in subparagraph (A), (B), (C), (D), (E), 9 (F), (G), (H), (I), (J), (K), (M), (N), (P), (R), (T), 10 (Y), or (Z) of section 5312(a)(2) of title 31, United 11 States Code. 12 (6) FOREIGN FINANCIAL INSTITUTION.—The 13 term ‘‘foreign financial institution’’ has the meaning 14 given that term in section 1010.605 of title 31, Code 15 of Federal Regulations (or any corresponding similar 16 regulation or ruling). 17 (7) KNOWINGLY.—The term ‘‘knowingly’’, with 18 respect to conduct, a circumstance, or a result, 19 means that a person has actual knowledge, or should 20 have known, of the conduct, the circumstance, or the 21 result. 22 (8) PERSON.—The term ‘‘person’’ means any 23 individual or entity. 24 VerDate Sep 11 2014 00:26 Oct 29, 2021 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6401 E:\BILLS\S1657.RS S1657 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 1657 RS (9) UNITED STATES PERSON.—The term 1 ‘‘United States person’’ means— 2 (A) a United States citizen or an alien law- 3 fully admitted for permanent residence to the 4 United States; or 5 (B) an entity organized under the laws of 6 the United States or of any jurisdiction within 7 the United States, including a foreign branch of 8 such an entity. 9 SEC. 3. SANCTIONS WITH RESPECT TO CHINESE PERSONS 10 RESPONSIBLE FOR CHINA’S ACTIVITIES IN 11 THE SOUTH CHINA SEA AND THE EAST CHINA 12 SEA. 13 (a) INITIAL IMPOSITION OF SANCTIONS.—On and 14 after the date that is 60 days after the date of the enact- 15 ment of this Act, the President shall impose the sanctions 16 described in subsection (b) with respect to— 17 (1) any Chinese person that contributes to con- 18 struction or development projects, including land 19 reclamation, island-making, lighthouse construction, 20 building of base stations for mobile communications 21 services, building of electricity and fuel supply facili- 22 ties, or civil infrastructure projects, or contributes to 23 the ongoing supply of new settlements resulting from 24 such development projects, in areas of the South 25 VerDate Sep 11 2014 00:26 Oct 29, 2021 Jkt 029200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6401 E:\BILLS\S1657.RS S1657 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 1657 RS China Sea contested by one or more members of the 1 Association of Southeast Asian Nations; 2 (2) any Chinese person that is responsible for 3 or complicit in, or has engaged in, directly or indi- 4 rectly, actions or policies that threaten the peace, se- 5 curity, or stability of areas of the South China Sea 6 contested by one or more members of the Associa- 7 tion of Southeast Asian Nations or areas of the East 8 China Sea administered by Japan or the Republic of 9 Korea, including through the use of vessels and air- 10 craft to impose the sovereignty of the People’s Re- 11 public of China in those areas; 12 (3) any Chinese person that engages, or at- 13 tempts to engage, in an activity or transaction that 14 materially contributes to, or poses a risk of materi- 15 ally contributing to, an activity described in para- 16 graph (1) or (2); and 17 (4) any person that— 18 (A) is owned or controlled by a person de- 19 scribed in paragraph (1), (2), or (3); 20 (B) is acting for or on behalf of such a 21 person; or 22 (C) provides, or attempts to provide— 23 VerDate Sep 11 2014 00:26 Oct 29, 2021 Jkt 029200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6401 E:\BILLS\S1657.RS S1657 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 1657 RS (i) financial, material, technological, 1 or other support to a person described in 2 paragraph (1), (2), or (3); or 3 (ii) goods or services in support of an 4 activity described in paragraph (1), (2), or 5 (3). 6 (b) SANCTIONS DESCRIBED.— 7 (1) BLOCKING OF PROPERTY.—The President 8 shall block and prohibit, in accordance with the 9 International Emergency Economic Powers Act (50 10 U.S.C. 1701 et seq.), all transactions in all property 11 and interests in property of any person subject to 12 subsection (a) if such property and interests in prop- 13 erty are in the United States, come within the 14 United States, or are or come within the possession 15 or control of a United States person. 16 (2) EXCLUSION FROM UNITED STATES.—The 17 Secretary of State shall deny a visa to, and the Sec- 18 retary of Homeland Security shall exclude from the 19 United States, any person subject to subsection (a) 20 that is an alien. 21 (3) CURRENT VISA REVOKED.—The issuing 22 consular officer, the Secretary of State, or the Sec- 23 retary of Homeland Security (or a designee of one 24 of such Secretaries) shall revoke any visa or other 25 VerDate Sep 11 2014 00:26 Oct 29, 2021 Jkt 029200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6401 E:\BILLS\S1657.RS S1657 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 1657 RS entry documentation issued to any person subject to 1 subsection (a) that is an alien, regardless of when 2 issued. The revocation shall take effect immediately 3 and shall automatically cancel any other valid visa or 4 entry documentation that is in the alien’s possession. 5 (c) EXCEPTIONS; PENALTIES.— 6 (1) INAPPLICABILITY OF NATIONAL EMER- 7 GENCY REQUIREMENT.—The requirements of section 8 202 of the International Emergency Economic Pow- 9 ers Act (50 U.S.C. 1701) shall not apply for pur- 10 poses of subsection (b)(1). 11 (2) COMPLIANCE WITH UNITED NATIONS HEAD- 12 QUARTERS AGREEMENT.—Paragraphs (2) and (3) of 13 subsection (b) shall not apply if admission of an 14 alien to the United States is necessary to permit the 15 United States to comply with the Agreement regard- 16 ing the Headquarters of the United Nations, signed 17 at Lake Success, June 26, 1947, and entered into 18 force, November 21, 1947, between the United Na- 19 tions and the United States. 20 (3) PENALTIES.—The penalties provided for in 21 subsections (b) and (c) of section 206 of the Inter- 22 national Emergency Economic Powers Act (50 23 U.S.C. 1705) shall apply to a person that violates, 24 attempts to violate, conspires to violate, or causes a 25 VerDate Sep 11 2014 00:26 Oct 29, 2021 Jkt 029200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6401 E:\BILLS\S1657.RS S1657 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 1657 RS violation of regulations prescribed under subsection 1 (b)(1) to the same extent that such penalties apply 2 to a person that commits an unlawful act described 3 in subsection (a) of such section 206. 4 (d) ADDITIONAL IMPOSITION OF SANCTIONS.— 5 (1) IN GENERAL.—The President shall prohibit 6 the opening, and prohibit or impose strict conditions 7 on the maintaining, in the United States of a cor- 8 respondent account or a payable-through account by 9 a foreign financial institution that the President de- 10 termines knowingly, on or after the date that is 60 11 days after the date of the enactment of this Act, 12 conducts or facilitates a significant financial trans- 13 action for a person subject to subsection (a) if the 14 Director of National Intelligence determines that the 15 Government of the People’s Republic of China has— 16 (A) declared an air defense identification 17 zone over any part of the South China Sea; 18 (B) initiated reclamation work at another 19 disputed location in the South China Sea, such 20 as at Scarborough Shoal; 21 (C) seized control of Second Thomas 22 Shoal; 23 (D) deployed surface-to-air missiles to any 24 of the artificial islands the People’s Republic of 25 VerDate Sep 11 2014 00:26 Oct 29, 2021 Jkt 029200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6401 E:\BILLS\S1657.RS S1657 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 1657 RS China has built in the Spratly Island chain, in- 1 cluding Fiery Cross, Mischief, or Subi Reefs; 2 (E) established territorial baselines around 3 the Spratly Island chain; 4 (F) repeated harassment of Philippine ves- 5 sels; or 6 (G) repeated provocative actions against 7 the Japanese Coast Guard or Maritime Self-De- 8 fense Force or United States forces in the East 9 China Sea. 10 (2) REPORT.— 11 (A) IN GENERAL.—The determination of 12 the Director of National Intelligence referred to 13 in paragraph (1) shall be submitted in a report 14 to the President and the appropriate commit- 15 tees of Congress. 16 (B) FORM OF REPORT.—The report re- 17 quired by subparagraph (A) shall be submitted 18 in unclassified form, but may include a classi- 19 fied annex. 20 SEC. 4. DETERMINATIONS AND REPORT ON CHINESE COM- 21 PANIES ACTIVE IN THE SOUTH CHINA SEA 22 AND THE EAST CHINA SEA. 23 (a) IN GENERAL.—The Secretary of State shall sub- 24 mit to the appropriate committees of Congress a report 25 VerDate Sep 11 2014 00:26 Oct 29, 2021 Jkt 029200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6401 E:\BILLS\S1657.RS S1657 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 1657 RS that identifies each Chinese person the Secretary deter- 1 mines is engaged in the activities described in section 3(a). 2 (b) CONSIDERATION.—In preparing the report re- 3 quired under subsection (a), the Secretary shall make spe- 4 cific findings with respect to whether each of the following 5 persons is involved in the activities described in section 6 3(a): 7 (1) CCCC Tianjin Dredging Co., Ltd. 8 (2) CCCC Dredging (Group) Company, Ltd. 9 (3) China Communications Construction Com- 10 pany (CCCC), Ltd. 11 (4) China Petroleum Corporation (Sinopec 12 Group). 13 (5) China Mobile. 14 (6) China Telecom. 15 (7) China Southern Power Grid. 16 (8) CNFC Guangzhou Harbor Engineering 17 Company. 18 (9) Zhanjiang South Project Construction Bu- 19 reau. 20 (10) Hubei Jiangtian Construction Group. 21 (11) China Harbour Engineering Company 22 (CHEC). 23 (12) Guangdong Navigation Group (GNG) 24 Ocean Shipping. 25 VerDate Sep 11 2014 00:26 Oct 29, 2021 Jkt 029200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6401 E:\BILLS\S1657.RS S1657 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 1657 RS (13) Shanghai Leading Energy Shipping. 1 (14) China National Offshore Oil Corporation 2 (CNOOC). 3 (15) China Oilfield Services Limited (COSL). 4 (16) China Precision Machinery Import/Export 5 Corporation (CPMIEC). 6 (17) China Aerospace Science and Industry 7 Corporation (CASIC). 8 (18) Aviation Industry Corporation of China 9 (AVIC). 10 (19) Shenyang Aircraft Corporation. 11 (20) Shaanxi Aircraft Corporation. 12 (21) China Ocean Shipping (Group) Company 13 (COSCO). 14 (22) China Southern Airlines. 15 (23) Zhan Chaoying. 16 (24) Sany Group. 17 (25) Chinese persons affiliated with any of the 18 entities specified in paragraphs (1) through (24). 19 (c) SUBMISSION AND FORM.— 20 (1) SUBMISSION.—The report required by sub- 21 section (a) shall be submitted not later than 60 days 22 after the date of the enactment of this Act and every 23 180 days thereafter until the date that is 3 years 24 after such date of enactment. 25 VerDate Sep 11 2014 00:26 Oct 29, 2021 Jkt 029200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6401 E:\BILLS\S1657.RS S1657 pbinns on DSKJLVW7X2PROD with BILLS 12 •S 1657 RS (2) FORM.—The report required by subsection 1 (a) shall be submitted in unclassified form, but may 2 include a classified annex if the Secretary deter- 3 mines it is necessary for the national security inter- 4 ests of the United States to do so. 5 (3) PUBLIC AVAILABILITY.—The Secretary 6 shall publish the unclassified part of the report re- 7 quired by subsection (a) on a publicly available 8 website of the Department of State. 9 SEC. 5. PROHIBITION AGAINST DOCUMENTS PORTRAYING 10 THE SOUTH CHINA SEA OR THE EAST CHINA 11 SEA AS PART OF CHINA. 12 The Government Publishing Office may not publish 13 any map, document, record, electronic resource, or other 14 paper of the United States (other than materials relating 15 to hearings held by committees of Congress or internal 16 work product of a Federal agency) portraying or otherwise 17 indicating that it is the position of the United States that 18 the territory or airspace in the South China Sea contested 19 by one or more members of the Association of Southeast 20 Asian Nations or the territory or airspace of areas of the 21 East China Sea administered by Japan or the Republic 22 of Korea is part of the territory or airspace of the People’s 23 Republic of China. 24 V [Text truncated for display. Full text available on Congress.gov.]