National Critical Capabilities Defense Act of 2021

II 117TH CONGRESS 1ST SESSION S. 1854 To require reviews of United States investment in foreign countries that may threaten national critical capabilities, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 26, 2021 Mr. CASEY (for himself, Mr. CORNYN, Ms. STABENOW, Mr. KAINE, Mr. RUBIO, and Mr. TILLIS) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To require reviews of United States investment in foreign countries that may threaten national critical capabilities, 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 ‘‘National Critical Capa- 4 bilities Defense Act of 2021’’. 5 SEC. 2. NATIONAL CRITICAL CAPABILITIES REVIEWS. 6 (a) IN GENERAL.—The Trade Act of 1974 (19 7 U.S.C. 2101 et seq.) is amended by adding at the end 8 the following: 9 VerDate Sep 11 2014 00:31 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1854.IS S1854 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 1854 IS ‘‘TITLE X—NATIONAL CRITICAL 1 CAPABILITIES REVIEWS 2 ‘‘SEC. 1001. DEFINITIONS. 3 ‘‘In this title: 4 ‘‘(1) APPROPRIATE CONGRESSIONAL COMMIT- 5 TEES.—The term ‘appropriate congressional com- 6 mittees’ means— 7 ‘‘(A) the Committee on Finance, the Com- 8 mittee on Armed Services, the Committee on 9 Banking, Housing, and Urban Affairs, the 10 Committee on Commerce, Science, and Trans- 11 portation, the Committee on Health, Education, 12 Labor, and Pensions, and the Committee on 13 Homeland Security and Governmental Affairs 14 of the Senate; and 15 ‘‘(B) the Committee on Ways and Means, 16 the Committee on Armed Services, the Com- 17 mittee on Education and Labor, the Committee 18 on Financial Services, the Committee on Home- 19 land Security, and the Committee on Transpor- 20 tation and Infrastructure of the House of Rep- 21 resentatives. 22 ‘‘(2) COMMITTEE.—The term ‘Committee’ 23 means the Committee on National Critical Capabili- 24 ties established under section 1002. 25 VerDate Sep 11 2014 00:31 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1854.IS S1854 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 1854 IS ‘‘(3) CONTROL.—The term ‘control’ means the 1 power, direct or indirect, whether exercised or not 2 exercised, to determine, direct, or decide important 3 matters affecting an entity, subject to regulations 4 prescribed by the Committee. 5 ‘‘(4) COUNTRY OF CONCERN.—The term ‘coun- 6 try of concern’— 7 ‘‘(A) has the meaning given the term ‘for- 8 eign adversary’ in section 8(c)(2) of the Secure 9 and Trusted Communications Networks Act of 10 2019 (47 U.S.C. 1607(c)(2)); and 11 ‘‘(B) may include a nonmarket economy 12 country (as defined in section 771(18) of the 13 Tariff Act of 1930 (19 U.S.C. 1677(18))) iden- 14 tified by the Committee for purposes of this 15 paragraph by regulation. 16 ‘‘(5) COVERED TRANSACTION.— 17 ‘‘(A) IN GENERAL.—Except as otherwise 18 provided, the term ‘covered transaction’ means 19 any of the following transactions, proposed or 20 pending on or after the date of the enactment 21 of this title: 22 ‘‘(i) Any transaction by a United 23 States business that— 24 VerDate Sep 11 2014 00:31 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1854.IS S1854 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 1854 IS ‘‘(I) shifts or relocates to a coun- 1 try of concern, or transfers to an enti- 2 ty of concern, the design, develop- 3 ment, production, manufacture, fab- 4 rication, supply, servicing, testing, 5 management, operation, investment, 6 ownership, or any other essential ele- 7 ments involving one or more national 8 critical capabilities identified under 9 subparagraph (B)(ii); or 10 ‘‘(II) could result in an unaccept- 11 able risk to a national critical capa- 12 bility. 13 ‘‘(ii) Any other transaction, transfer, 14 agreement, or arrangement, the structure 15 of which is designed or intended to evade 16 or circumvent the application of this title, 17 subject to regulations prescribed by the 18 Committee. 19 ‘‘(B) REGULATIONS.— 20 ‘‘(i) IN GENERAL.—The Committee 21 shall prescribe regulations further defining 22 the term ‘covered transaction’ in accord- 23 ance with subchapter II of chapter 5, and 24 chapter 7, of title 5, United States Code 25 VerDate Sep 11 2014 00:31 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1854.IS S1854 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 1854 IS (commonly known as the ‘Administrative 1 Procedure Act’). 2 ‘‘(ii) IDENTIFICATION OF NATIONAL 3 CRITICAL CAPABILITIES.—For purposes of 4 subparagraph (A)(I), the regulations pre- 5 scribed by the Committee under clause (i) 6 shall— 7 ‘‘(I) identify the national critical 8 capabilities subject to that subpara- 9 graph based on criteria intended to 10 limit application of that subparagraph 11 to the subset of national critical capa- 12 bilities that is likely to pose an unac- 13 ceptable risk to the national security 14 and crisis preparedness of the United 15 States; and 16 ‘‘(II) enumerate, quantify, 17 prioritize, and set forth sufficient al- 18 lowances of, specific types and exam- 19 ples of such capabilities. 20 ‘‘(6) CRISIS PREPAREDNESS.—The term ‘crisis 21 preparedness’ means preparedness for— 22 ‘‘(A) a public health emergency declared 23 under section 319 of the Public Health Service 24 Act (42 U.S.C. 247d); or 25 VerDate Sep 11 2014 00:31 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1854.IS S1854 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 1854 IS ‘‘(B) a major disaster declared under sec- 1 tion 401 of the Robert T. Stafford Disaster Re- 2 lief and Emergency Assistance Act (42 U.S.C. 3 5170). 4 ‘‘(7) CRITICAL INFRASTRUCTURE.—The term 5 ‘critical infrastructure’ means systems and assets, 6 whether physical or virtual, so vital to the United 7 States that the incapacity or destruction of such sys- 8 tems and assets would have a debilitating impact on 9 national security, national economic security, na- 10 tional public health or safety, or any combination of 11 those matters. 12 ‘‘(8) ENTITY OF CONCERN.—The term ‘entity 13 of concern’ means an entity— 14 ‘‘(A) the ultimate parent entity of which is 15 domiciled in a country of concern; or 16 ‘‘(B) that is directly or indirectly controlled 17 by, owned by, or subject to the influence of a 18 foreign person that has a substantial nexus 19 with a country of concern. 20 ‘‘(9) FOREIGN ENTITY.— 21 ‘‘(A) IN GENERAL.—Except as provided by 22 subparagraph (B), the term ‘foreign entity’ 23 means any branch, partnership, group or sub- 24 group, association, estate, trust, corporation or 25 VerDate Sep 11 2014 00:31 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1854.IS S1854 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 1854 IS division of a corporation, or organization orga- 1 nized under the laws of a foreign country if— 2 ‘‘(i) its principal place of business is 3 outside the United States; or 4 ‘‘(ii) its equity securities are primarily 5 traded on one or more foreign exchanges. 6 ‘‘(B) EXCEPTION.—The term ‘foreign enti- 7 ty’ does not include any entity described in sub- 8 paragraph (A) that can demonstrate that a ma- 9 jority of the equity interest in such entity is ul- 10 timately owned by nationals of the United 11 States. 12 ‘‘(10) FOREIGN PERSON.—The term ‘foreign 13 person’ means— 14 ‘‘(A) any foreign national, foreign govern- 15 ment, or foreign entity; 16 ‘‘(B) any entity over which control is exer- 17 cised or exercisable by a foreign national, for- 18 eign government, or foreign entity; or 19 ‘‘(C) any entity over which control is exer- 20 cised or exercisable by a person described in 21 subparagraph (A) or (B). 22 ‘‘(11) NATIONAL CRITICAL CAPABILITIES.—The 23 term ‘national critical capabilities’, subject to regula- 24 tions prescribed by the Committee— 25 VerDate Sep 11 2014 00:31 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1854.IS S1854 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 1854 IS ‘‘(A) means systems and assets, whether 1 physical or virtual, so vital to the United States 2 that the inability to develop such systems and 3 assets or the incapacity or destruction of such 4 systems or assets would have a debilitating im- 5 pact on national security or crisis preparedness; 6 and 7 ‘‘(B) includes the following: 8 ‘‘(i) The production, in sufficient 9 quantities, of any of the following articles: 10 ‘‘(I) Medical supplies, medicines, 11 and personal protective equipment. 12 ‘‘(II) Articles essential to the op- 13 eration, manufacture, supply, service, 14 or maintenance of critical infrastruc- 15 ture. 16 ‘‘(III) Articles critical to infra- 17 structure construction after a natural 18 or manmade disaster. 19 ‘‘(IV) Articles that are compo- 20 nents of systems critical to the oper- 21 ation of weapons systems, intelligence 22 collection systems, or items critical to 23 the conduct of military or intelligence 24 operations. 25 VerDate Sep 11 2014 00:31 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1854.IS S1854 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 1854 IS ‘‘(V) Any other articles identified 1 in regulations prescribed under sec- 2 tion 1007. 3 ‘‘(ii) Supply chains for the production 4 of articles described in clause (i). 5 ‘‘(iii) Essential supply chains for the 6 Department of Defense. 7 ‘‘(iv) Any other supply chains identi- 8 fied in regulations prescribed under section 9 1007. 10 ‘‘(v) Services critical to the production 11 of articles described in clause (i) or a sup- 12 ply chain described in clause (ii), (iii), or 13 (iv). 14 ‘‘(vi) Medical services. 15 ‘‘(vii) Services critical to the mainte- 16 nance of critical infrastructure. 17 ‘‘(viii) Services critical to infrastruc- 18 ture construction after a natural or man- 19 made disaster. 20 ‘‘(ix) Any other services identified in 21 regulations prescribed under section 1007. 22 ‘‘(12) NATIONAL SECURITY.—The term ‘na- 23 tional security’ includes— 24 VerDate Sep 11 2014 00:31 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1854.IS S1854 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 1854 IS ‘‘(A) national security, as defined in sec- 1 tion 721(a) of the Defense Production Act of 2 1950 (50 U.S.C. 4565(a)); 3 ‘‘(B) national defense, as defined in section 4 702 of that Act (50 U.S.C. 4552); and 5 ‘‘(C) agricultural security and natural re- 6 sources security. 7 ‘‘(13) PARTY.—The term ‘party’, with respect 8 to a transaction, has the meaning given that term in 9 regulations prescribed by the Committee. 10 ‘‘(14) UNITED STATES.—The term ‘United 11 States’ means the several States, the District of Co- 12 lumbia, and any territory or possession of the 13 United States. 14 ‘‘(15) UNITED STATES BUSINESS.—The term 15 ‘United States business’ means a person engaged in 16 interstate commerce in the United States. 17 ‘‘SEC. 1002. COMMITTEE ON NATIONAL CRITICAL CAPABILI- 18 TIES. 19 ‘‘(a) IN GENERAL.—There is established a com- 20 mittee, to be known as the ‘Committee on National Crit- 21 ical Capabilities’, which shall carry out this title and such 22 other assignments as the President may designate. 23 ‘‘(b) MEMBERSHIP.— 24 VerDate Sep 11 2014 00:31 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1854.IS S1854 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 1854 IS ‘‘(1) IN GENERAL.—The Committee shall be 1 comprised of the head, or a designee of the head, of 2 each of the following: 3 ‘‘(A) The Office of the United States 4 Trade Representative. 5 ‘‘(B) The Department of Commerce. 6 ‘‘(C) The Office of Science and Technology 7 Policy. 8 ‘‘(D) The Department of the Treasury. 9 ‘‘(E) The Department of Homeland Secu- 10 rity. 11 ‘‘(F) The Department of Defense. 12 ‘‘(G) The Department of State. 13 ‘‘(H) The Department of Justice. 14 ‘‘(I) The Department of Energy. 15 ‘‘(J) The Department of Health and 16 Human Services. 17 ‘‘(K) The Department of Agriculture. 18 ‘‘(L) The Department of Labor. 19 ‘‘(M) Any other Federal agency the Presi- 20 dent determines appropriate, generally or on a 21 case-by-case basis. 22 ‘‘(2) EX OFFICIO MEMBERS.— 23 ‘‘(A) IN GENERAL.—In addition to the 24 members of the Committee specified in para- 25 VerDate Sep 11 2014 00:31 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1854.IS S1854 pbinns on DSKJLVW7X2PROD with BILLS 12 •S 1854 IS graph (1), the following shall, except as pro- 1 vided in subparagraph (B), be nonvoting, ex 2 officio members of the Committee: 3 ‘‘(i) The Director of National Intel- 4 ligence. 5 ‘‘(ii) The Administrator of the Fed- 6 eral Emergency Management Agency. 7 ‘‘(iii) The Director of the National In- 8 stitute of Standards and Technology. 9 ‘‘(iv) The Director of the Centers for 10 Disease Control and Prevention. 11 ‘‘(v) The Director of the National In- 12 stitute of Allergy and Infectious Diseases. 13 ‘‘(vi) The Chairperson of the Federal 14 Communications Commission. 15 ‘‘(vii) The Chairperson of the Securi- 16 ties and Exchange Commission. 17 ‘‘(viii) The Chairperson of the Com- 18 modity Futures Trading Commission. 19 ‘‘(ix) The Administrator of the Fed- 20 eral Aviation Administration. 21 ‘‘(B) DESIGNATION AS VOTING MEM- 22 BERS.—The chairperson of the Committee may 23 designate any of the officials specified in 24 VerDate Sep 11 2014 00:31 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1854.IS S1854 pbinns on DSKJLVW7X2PROD with BILLS 13 •S 1854 IS clauses (ii) through (ix) of subparagraph (A) as 1 voting members of the Committee. 2 ‘‘(c) CHAIRPERSON.— 3 ‘‘(1) IN GENERAL.—The United States Trade 4 Representative shall serve as the chairperson of the 5 Committee. 6 ‘‘(2) CONSULTATIONS WITH SECRETARIES OF 7 DEFENSE AND COMMERCE.—In carrying out the du- 8 ties of the chairperson of the Committee, the United 9 States Trade Representative shall consult with the 10 Secretary of Defense and the Secretary of Com- 11 merce. 12 ‘‘(d) DESIGNATION OF OFFICIALS TO CARRY OUT 13 DUTIES RELATED TO COMMITTEE.—The head of each 14 agency represented on the Committee shall designate an 15 official, at or equivalent to the level of Assistant Secretary 16 in the Department of the Treasury, who is appointed by 17 the President, by and with the advice and consent of the 18 Senate, to carry out such duties related to the Committee 19 as the head of the agency may assign. 20 ‘‘SEC. 1003. REVIEW OF COVERED TRANSACTIONS. 21 ‘‘(a) MANDATORY NOTIFICATION.—A United States 22 business that engages in a covered transaction shall sub- 23 mit a written notification of the transacti [Text truncated for display. Full text available on Congress.gov.]