SECURE IP Act of 2019

II 116TH CONGRESS 1ST SESSION S. 1092 To impose sanctions with respect to the theft of United States intellectual property by Chinese persons, and for other purposes. IN THE SENATE OF THE UNITED STATES APRIL 9, 2019 Mr. CRUZ introduced the following bill; which was read twice and referred to the Committee on Foreign Relations A BILL To impose sanctions with respect to the theft of United States intellectual property by Chinese persons, 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 ‘‘Sanction Entities in 4 China for Undermining Rules, Exploiting Intellectual 5 Property Act of 2019’’ or the ‘‘SECURE IP Act of 2019’’. 6 VerDate Sep 11 2014 19:35 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1092.IS S1092 pbinns on DSK79D2C42PROD with BILLS 2 •S 1092 IS SEC. 2. IMPOSITION OF SANCTIONS WITH RESPECT TO CHI- 1 NESE PERSONS THAT ARE INVOLVED IN THE 2 THEFT OF UNITED STATES INTELLECTUAL 3 PROPERTY. 4 (a) IDENTIFICATION REQUIRED.— 5 (1) IN GENERAL.—Not later than 90 days after 6 the date of the enactment of this Act, and every 180 7 days thereafter, the President shall— 8 (A) identify Chinese persons that the 9 President determines to, on or after such date 10 of enactment— 11 (i) be responsible for or complicit in, 12 or to have engaged in, the misappropria- 13 tion, receipt, or use of intellectual property 14 stolen from United States persons if that 15 misappropriation, receipt, or use is reason- 16 ably likely to result in, or has materially 17 contributed to, a significant threat to the 18 national security, foreign policy, or econ- 19 omy of the United States; 20 (ii) have materially assisted, spon- 21 sored, or provided financial, material, or 22 technological support for, or goods or serv- 23 ices to or in support of— 24 (I) any activity described in 25 clause (i); or 26 VerDate Sep 11 2014 19:35 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1092.IS S1092 pbinns on DSK79D2C42PROD with BILLS 3 •S 1092 IS (II) any person the property and 1 interests in property of which are 2 blocked pursuant to subsection (b)(1); 3 (iii) be owned or controlled by, or to 4 have acted or purported to act for or on 5 behalf of, directly or indirectly, any person 6 the property and interests in property of 7 which are blocked pursuant to subsection 8 (b)(1); 9 (iv) have attempted to engage in any 10 of the activity described in clause (i), (ii), 11 or (iii); or 12 (v) be a corporate officer of, or a prin- 13 cipal shareholder with controlling interests 14 in, an entity described in any of clauses (i) 15 through (iv); and 16 (B) submit to the appropriate congres- 17 sional committees a list of such persons. 18 (2) FORM.—The list required by paragraph 19 (1)(B) shall be submitted to the appropriate con- 20 gressional committees in unclassified form and pub- 21 lished in the Federal Register. 22 (3) PUBLIC INPUT.— 23 VerDate Sep 11 2014 19:35 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1092.IS S1092 pbinns on DSK79D2C42PROD with BILLS 4 •S 1092 IS (A) IN GENERAL.—In identifying persons 1 under paragraph (1)(A), the President shall so- 2 licit and consider public input, as appropriate. 3 (B) PROCESS.—Not later than 30 days 4 after the date of the enactment of this Act, the 5 President shall— 6 (i) establish a process for soliciting 7 and considering public input under sub- 8 paragraph (A) in a manner that protects 9 the confidentiality of persons providing 10 that input; 11 (ii) publish guidelines for providing 12 input pursuant to that process on a pub- 13 licly available internet website in an easily 14 searchable format; and 15 (iii) submit to the appropriate con- 16 gressional committees a report on that 17 process. 18 (b) IMPOSITION OF SANCTIONS.—The President shall 19 impose the following sanctions with respect to each person 20 on the list required by subsection (a)(1)(B): 21 (1) BLOCKING OF PROPERTY.—The President 22 shall block and prohibit, in accordance with the 23 International Emergency Economic Powers Act (50 24 U.S.C. 1701 et seq.), all transactions in all property 25 VerDate Sep 11 2014 19:35 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1092.IS S1092 pbinns on DSK79D2C42PROD with BILLS 5 •S 1092 IS and interests in property of the person if such prop- 1 erty and interests in property are in the United 2 States, come within the United States, or are or 3 come within the possession or control of a United 4 States person. 5 (2) EXCLUSION FROM UNITED STATES.—In the 6 case of an alien, the Secretary of State shall deny 7 a visa to, and the Secretary of Homeland Security 8 shall exclude from the United States, the alien. 9 (c) EXCEPTIONS.— 10 (1) INTELLIGENCE ACTIVITIES.—This section 11 shall not apply with respect to activities subject to 12 the reporting requirements under title V of the Na- 13 tional Security Act of 1947 (50 U.S.C. 3091 et seq.) 14 or any authorized intelligence activities of the United 15 States. 16 (2) COMPLIANCE WITH UNITED NATIONS HEAD- 17 QUARTERS AGREEMENT.—Subsection (b)(2) shall 18 not apply with respect to the admission of an alien 19 to the United States if such admission is necessary 20 to comply with United States obligations under the 21 Agreement between the United Nations and the 22 United States of America regarding the Head- 23 quarters of the United Nations, signed at Lake Suc- 24 cess June 26, 1947, and entered into force Novem- 25 VerDate Sep 11 2014 19:35 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1092.IS S1092 pbinns on DSK79D2C42PROD with BILLS 6 •S 1092 IS ber 21, 1947, under the Convention on Consular Re- 1 lations, done at Vienna April 24, 1963, and entered 2 into force March 19, 1967, or under other inter- 3 national agreements. 4 (d) IMPLEMENTATION; PENALTIES.— 5 (1) IMPLEMENTATION.—The President may ex- 6 ercise all authorities provided under sections 203 7 and 205 of the International Emergency Economic 8 Powers Act (50 U.S.C. 1702 and 1704) to carry out 9 this section. 10 (2) PENALTIES.—A person that violates, at- 11 tempts to violate, conspires to violate, or causes a 12 violation of subsection (b)(1) or any regulation, li- 13 cense, or order issued to carry out that subsection 14 shall be subject to the penalties set forth in sub- 15 sections (b) and (c) of section 206 of the Inter- 16 national Emergency Economic Powers Act (50 17 U.S.C. 1705) to the same extent as a person that 18 commits an unlawful act described in subsection (a) 19 of that section. 20 (e) TERMINATION OF SANCTIONS.—The President 21 may remove a Chinese person from the list required by 22 subsection (a)(1)(B), and terminate the application of 23 sanctions under subsection (b) with respect to the person, 24 VerDate Sep 11 2014 19:35 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1092.IS S1092 pbinns on DSK79D2C42PROD with BILLS 7 •S 1092 IS if the President determines and reports to the appropriate 1 congressional committees that the person— 2 (1) has not, during the 2-year period preceding 3 the date of the determination, engaged in any activ- 4 ity described in subsection (a)(1)(A); and 5 (2) has provided assurances that the person will 6 not engage in any such activity in the future. 7 (f) REPORT REQUIRED.— 8 (1) IN GENERAL.—With the third consecutive 9 list required by subsection (a)(1)(B) that includes a 10 Chinese person, the President shall submit to the 11 appropriate congressional committees a report that 12 includes a description of— 13 (A) the activity described in subsection 14 (a)(1)(A) in which the person engaged; 15 (B) how the intellectual property involved 16 in the activity was misappropriated or used; 17 (C) how the use of that intellectual prop- 18 erty affected the United States person from 19 which the intellectual property was stolen; and 20 (D) the significant threat to the national 21 security, foreign policy, or economy of the 22 United States the misappropriation, receipt, or 23 use of the intellectual property is reasonably 24 VerDate Sep 11 2014 19:35 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1092.IS S1092 pbinns on DSK79D2C42PROD with BILLS 8 •S 1092 IS likely to result in or has materially contributed 1 to. 2 (2) FORM OF REPORT.—The report required by 3 paragraph (1) shall be submitted in unclassified 4 form but may include a classified annex. 5 (g) DEFINITIONS.—In this section: 6 (1) ADMISSION; ALIEN.—The terms ‘‘admis- 7 sion’’ and ‘‘alien’’ have the meanings given those 8 terms in section 101 of the Immigration and Nation- 9 ality Act (8 U.S.C. 1101). 10 (2) APPROPRIATE CONGRESSIONAL COMMIT- 11 TEES.—The term ‘‘appropriate congressional com- 12 mittees’’ means— 13 (A) the Committee on Banking, Housing, 14 and Urban Affairs, the Committee on Foreign 15 Relations, and the Committee on Finance of the 16 Senate; and 17 (B) the Committee on Foreign Affairs, the 18 Committee on Financial Services, and the Com- 19 mittee on Ways and Means of the House of 20 Representatives. 21 (3) CHINESE PERSON.—The term ‘‘Chinese 22 person’’ means— 23 (A) an individual who is a citizen or na- 24 tional of the People’s Republic of China; or 25 VerDate Sep 11 2014 19:35 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1092.IS S1092 pbinns on DSK79D2C42PROD with BILLS 9 •S 1092 IS (B) an entity organized under the laws of 1 the People’s Republic of China or otherwise 2 subject to the jurisdiction of the Government of 3 the People’s Republic of China. 4 (4) INTELLECTUAL PROPERTY.—The term ‘‘in- 5 tellectual property’’ means— 6 (A) any work protected by a copyright 7 under title 17, United States Code; 8 (B) any property protected by a patent 9 granted by the United States Patent and 10 Trademark Office under title 35, United States 11 Code; 12 (C) any word, name, symbol, or device, or 13 any combination thereof, that is registered as a 14 trademark with the United States Patent and 15 Trademark Office under the Act entitled ‘‘An 16 Act to provide for the registration and protec- 17 tion of trademarks used in commerce, to carry 18 out the provisions of certain international con- 19 ventions, and for other purposes’’, approved 20 July 5, 1946 (commonly known as the 21 ‘‘Lanham Act’’ or the ‘‘Trademark Act of 22 1946’’) (15 U.S.C. 1051 et seq.); 23 (D) a trade secret (as defined in section 24 1839 of title 18, United States Code); or 25 VerDate Sep 11 2014 19:35 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1092.IS S1092 pbinns on DSK79D2C42PROD with BILLS 10 •S 1092 IS (E) any other form of intellectual property. 1 (5) UNITED STATES PERSON.—The term 2 ‘‘United States person’’ means— 3 (A) a United States citizen or an alien law- 4 fully admitted for permanent residence to the 5 United States; or 6 (B) an entity organized under the laws of 7 the United States or of any jurisdiction within 8 the United States, including a foreign branch of 9 such an entity. 10 Æ VerDate Sep 11 2014 19:35 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\S1092.IS S1092 pbinns on DSK79D2C42PROD with BILLS