Telecommunications Denial Order Enforcement Act

II 116TH CONGRESS 1ST SESSION S. 152 To direct the President to impose penalties pursuant to denial orders with respect to certain Chinese telecommunications companies that are in violation of the export control or sanctions laws of the United States, and for other purposes. IN THE SENATE OF THE UNITED STATES JANUARY 16, 2019 Mr. COTTON (for himself and Mr. VAN HOLLEN) introduced the following bill; which was read twice and referred to the Committee on Banking, Hous- ing, and Urban Affairs A BILL To direct the President to impose penalties pursuant to de- nial orders with respect to certain Chinese telecommuni- cations companies that are in violation of the export control or sanctions laws of the United States, 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 ‘‘Telecommunications 4 Denial Order Enforcement Act’’. 5 VerDate Sep 11 2014 22:30 Jan 24, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S152.IS S152 pbinns on DSK79D2C42PROD with BILLS 2 •S 152 IS SEC. 2. STATEMENT OF POLICY. 1 It shall be the policy of the United States to enforce 2 denial orders on covered telecommunications companies 3 (as defined in section 3(d)) found to have violated the ex- 4 port control or sanctions laws of the United States. 5 SEC. 3. IMPOSITION AND ENFORCEMENT OF DENIAL OR- 6 DERS WITH RESPECT TO COVERED TELE- 7 COMMUNICATIONS COMPANIES. 8 (a) IMPOSITION OF DENIAL ORDERS.— 9 (1) IN GENERAL.—Not later than 180 days 10 after the date of the enactment of this Act, and an- 11 nually thereafter— 12 (A) the President shall determine and re- 13 port to the appropriate congressional commit- 14 tees if any covered telecommunications company 15 is in violation of an export control or sanctions 16 law of the United States; and 17 (B) if the President makes an affirmative 18 determination with respect to a covered tele- 19 communications company under subparagraph 20 (A), the President shall impose penalties pursu- 21 ant to a denial order with respect to the com- 22 pany or its agents or affiliates as described in 23 paragraph (2). 24 (2) PENALTIES DESCRIBED.—The penalties de- 25 scribed in this paragraph are the following: 26 VerDate Sep 11 2014 22:30 Jan 24, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S152.IS S152 pbinns on DSK79D2C42PROD with BILLS 3 •S 152 IS (A) The covered telecommunications com- 1 pany and when acting for or on their behalf, 2 their successors, assigns, directors, officers, em- 3 ployees, representatives, or agents (hereinafter 4 each a ‘‘denied person’’), may not, directly or 5 indirectly, participate in any way in any trans- 6 action involving any commodity, software, or 7 technology (hereinafter collectively referred to 8 as ‘‘item’’) exported or to be exported from the 9 United States that is subject to the Export Ad- 10 ministration Regulations (as codified in sub- 11 chapter C of chapter VII of title 15, Code of 12 Federal Regulations, or any successor regula- 13 tions), or in any other activity subject to the 14 Export Administration Regulations. 15 (B) No person may, directly or indirectly, 16 do any of the following: 17 (i) Export or reexport to or on behalf 18 of a denied person any item subject to the 19 Export Administration Regulations. 20 (ii) Take any action that facilitates 21 the acquisition or attempted acquisition by 22 a denied person of the ownership, posses- 23 sion, or control of any item subject to the 24 Export Administration Regulations that 25 VerDate Sep 11 2014 22:30 Jan 24, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S152.IS S152 pbinns on DSK79D2C42PROD with BILLS 4 •S 152 IS has been or will be exported from the 1 United States, including financing or other 2 support activities related to a transaction 3 whereby a denied person acquires or at- 4 tempts to acquire such ownership, posses- 5 sion, or control. 6 (iii) Take any action to acquire from 7 or to facilitate the acquisition or attempted 8 acquisition from a denied person of any 9 item subject to the Export Administration 10 Regulations that has been exported from 11 the United States. 12 (iv) Obtain from a denied person in 13 the United States any item subject to the 14 Export Administration Regulations with 15 knowledge or reason to know that the item 16 will be, or is intended to be, exported from 17 the United States. 18 (v) Engage in any transaction to serv- 19 ice any item subject to the Export Admin- 20 istration Regulations that has been or will 21 be exported from the United States and 22 which is owned, possessed, or controlled by 23 a denied person, or service any item, of 24 whatever origin, that is owned, possessed, 25 VerDate Sep 11 2014 22:30 Jan 24, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S152.IS S152 pbinns on DSK79D2C42PROD with BILLS 5 •S 152 IS or controlled by a denied person if such 1 service involves the use of any item subject 2 to the Export Administration Regulations 3 that has been or will be exported from the 4 United States. 5 (3) REPORT.—The President shall submit to 6 the appropriate congressional committees an annual 7 report on the implementation of this subsection. 8 (b) PROHIBITION ON MODIFICATION OF PEN- 9 ALTIES.—Notwithstanding any other provision of law, no 10 official of an executive agency may modify any penalty, 11 including a penalty imposed pursuant to a denial order, 12 implemented by the Government of the United States with 13 respect to a covered telecommunications company or its 14 agents or affiliates pursuant to a determination that the 15 company has violated an export control or sanctions law 16 of the United States until the date that is 30 days after 17 the President certifies to the appropriate congressional 18 committees that the company— 19 (1) has not, for a period of one year, conducted 20 activities in violation of the laws of the United 21 States; and 22 (2) is fully cooperating with investigations into 23 the activities of the company conducted by the Gov- 24 ernment of the United States, if any. 25 VerDate Sep 11 2014 22:30 Jan 24, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S152.IS S152 pbinns on DSK79D2C42PROD with BILLS 6 •S 152 IS (c) REGULATIONS.—The President is authorized to 1 prescribe such regulations as may be necessary to carry 2 out this section. 3 (d) DEFINITIONS.—In this section: 4 (1) APPROPRIATE CONGRESSIONAL COMMIT- 5 TEES.—The term ‘‘appropriate congressional com- 6 mittees’’ means— 7 (A) the Committee on Financial Services 8 and the Committee on Foreign Affairs of the 9 House of Representatives; and 10 (B) the Committee on Banking, Housing, 11 and Urban Affairs and the Committee on For- 12 eign Relations of the Senate. 13 (2) COVERED TELECOMMUNICATIONS COM- 14 PANY.—The term ‘‘covered telecommunications com- 15 pany’’ means any of the following: 16 (A) Huawei Technologies Company or 17 ZTE Corporation (or any subsidiary or affiliate 18 of such entities). 19 (B) Any other telecommunications com- 20 pany domiciled in the People’s Republic of 21 China (or any subsidiary or affiliate of such en- 22 tities), excluding any subsidiary of a foreign 23 company domiciled in the People’s Republic of 24 China. 25 VerDate Sep 11 2014 22:30 Jan 24, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S152.IS S152 pbinns on DSK79D2C42PROD with BILLS 7 •S 152 IS (3) EXECUTIVE AGENCY.—The term ‘‘executive 1 agency’’ means— 2 (A) an executive department specified in 3 section 101 of title 5, United States Code; 4 (B) a military department specified in sec- 5 tion 102 of title 5, United States Code; 6 (C) an independent establishment as de- 7 fined in section 104(1) of title 5, United States 8 Code; and 9 (D) a wholly owned Government corpora- 10 tion fully subject to chapter 91 of title 31, 11 United States Code. 12 Æ VerDate Sep 11 2014 22:30 Jan 24, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\S152.IS S152 pbinns on DSK79D2C42PROD with BILLS