China Technology Transfer Control Act of 2019

II 116TH CONGRESS 1ST SESSION S. 1459 To control the export to the People’s Republic of China of certain technology and intellectual property important to the national interest of the United States, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 14, 2019 Mr. HAWLEY introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To control the export to the People’s Republic of China of certain technology and intellectual property important to the national interest 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 ‘‘China Technology 4 Transfer Control Act of 2019’’. 5 SEC. 2. DEFINITIONS. 6 In this Act: 7 VerDate Sep 11 2014 05:27 May 23, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1459.IS S1459 kjohnson on DSK79L0C42 with BILLS 2 •S 1459 IS (1) CHINESE PERSON.—The term ‘‘Chinese 1 person’’ means— 2 (A) an individual who is a citizen or na- 3 tional of the People’s Republic of China; or 4 (B) an entity organized under the laws of 5 the People’s Republic of China or otherwise 6 subject to the jurisdiction of the Government of 7 the People’s Republic of China. 8 (2) COVERED NATIONAL INTEREST TECH- 9 NOLOGY OR INTELLECTUAL PROPERTY.—The term 10 ‘‘covered national interest technology or intellectual 11 property’’ includes the following: 12 (A) Technology or intellectual property 13 that would make a significant contribution to 14 the military potential of the People’s Republic 15 of China that would prove detrimental to the 16 national security of the United States. 17 (B) Technology or intellectual property 18 necessary to protect the economy of the United 19 States from the excessive drain of scarce mate- 20 rials and to reduce the serious inflationary im- 21 pact of demand from the People’s Republic of 22 China. 23 (C) Technology or intellectual property 24 that is a component of the production of prod- 25 VerDate Sep 11 2014 05:27 May 23, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1459.IS S1459 kjohnson on DSK79L0C42 with BILLS 3 •S 1459 IS ucts included in the most recent list required 1 under section 183 of the Trade Act of 1974, as 2 added by section 6(a), determined in consulta- 3 tion with the United States Trade Representa- 4 tive. 5 (D) Technology used by the Government of 6 the People’s Republic of China to carry out vio- 7 lations of human rights or religious liberties. 8 (3) FOREIGN PERSON.—The term ‘‘foreign per- 9 son’’ means any person that is not a United States 10 person. 11 (4) KNOWINGLY.—The term ‘‘knowingly’’, with 12 respect to conduct, a circumstance, or a result, 13 means that a person has actual knowledge, or should 14 have known, of the conduct, the circumstance, or the 15 result. 16 (5) INTELLECTUAL PROPERTY.—The term ‘‘in- 17 tellectual property’’ means— 18 (A) any work protected by a copyright 19 under title 17, United States Code; 20 (B) any property protected by a patent 21 granted by the United States Patent and 22 Trademark Office under title 35, United States 23 Code; 24 VerDate Sep 11 2014 05:27 May 23, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1459.IS S1459 kjohnson on DSK79L0C42 with BILLS 4 •S 1459 IS (C) any word, name, symbol, or device, or 1 any combination thereof, that is registered as a 2 trademark with the United States Patent and 3 Trademark Office under the Act entitled ‘‘An 4 Act to provide for the registration and protec- 5 tion of trademarks used in commerce, to carry 6 out the provisions of certain international con- 7 ventions, and for other purposes’’, approved 8 July 5, 1946 (commonly known as the 9 ‘‘Lanham Act’’ or the ‘‘Trademark Act of 10 1946’’) (15 U.S.C. 1051 et seq.); 11 (D) a trade secret (as defined in section 12 1839 of title 18, United States Code); or 13 (E) any other form of intellectual property. 14 (6) TECHNOLOGY.—The term ‘‘technology’’ in- 15 cludes goods or services relating to information sys- 16 tems, Internet-based services, production-enhancing 17 logistics, robotics, artificial intelligence, biotechnolo- 18 gy, or computing. 19 (7) UNITED STATES PERSON.—The term 20 ‘‘United States person’’ means— 21 (A) a United States citizen or an alien law- 22 fully admitted for permanent residence to the 23 United States; or 24 VerDate Sep 11 2014 05:27 May 23, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1459.IS S1459 kjohnson on DSK79L0C42 with BILLS 5 •S 1459 IS (B) an entity organized under the laws of 1 the United States or of any jurisdiction within 2 the United States, including a foreign branch of 3 such an entity. 4 SEC. 3. SENSE OF CONGRESS. 5 It is the sense of Congress that— 6 (1) while the United States is committed to 7 promoting cultural and technological exchange with 8 other countries, it is our responsibility to protect the 9 United States when channels for such exchange are 10 exploited by adversaries; and 11 (2) the People’s Republic of China consistently 12 seeks to exploit those channels, not only in its theft 13 of intellectual property but also in its manipulation 14 of lawful transfer and uses of technology in ways 15 that directly support its military objectives and 16 threaten the United States. 17 SEC. 4. CONTROL OF EXPORT OF COVERED NATIONAL IN- 18 TEREST TECHNOLOGY AND INTELLECTUAL 19 PROPERTY TO THE PEOPLE’S REPUBLIC OF 20 CHINA. 21 (a) IN GENERAL.—On and after the date that is 180 22 days after the date of the enactment of this Act, the Presi- 23 dent shall control the export or re-export to, or transfer 24 in, the People’s Republic of China of any covered national 25 VerDate Sep 11 2014 05:27 May 23, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1459.IS S1459 kjohnson on DSK79L0C42 with BILLS 6 •S 1459 IS interest technology or intellectual property subject to the 1 jurisdiction of the United States or exported by any 2 United States person. 3 (b) REPORT REQUIRED.—Not later than 90 days 4 after the date of the enactment of this Act, the Secretary 5 of State and the Secretary of Commerce shall jointly sub- 6 mit to Congress a report assessing whether covered na- 7 tional interest technology or intellectual property should 8 be controlled as required by subsection (a) under— 9 (1) the International Traffic in Arms Regula- 10 tions under subchapter M of chapter I of title 22, 11 Code of Federal Regulations; or 12 (2) the Export Administration Regulations 13 under subchapter C of chapter VII of title 15, Code 14 of Federal Regulations. 15 (c) REGULATIONS.—Not later than 180 days after 16 the date of the enactment of this Act, the President shall 17 prescribe such regulations as are necessary to carry out 18 subsection (a). 19 VerDate Sep 11 2014 05:27 May 23, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1459.IS S1459 kjohnson on DSK79L0C42 with BILLS 7 •S 1459 IS SEC. 5. IMPOSITION OF SANCTIONS WITH RESPECT TO PRO- 1 VISION TO OR PURCHASE FROM THE PEO- 2 PLE’S REPUBLIC OF CHINA OF COVERED NA- 3 TIONAL INTEREST TECHNOLOGY AND INTEL- 4 LECTUAL PROPERTY. 5 (a) IN GENERAL.—The President shall, pursuant to 6 the International Emergency Economic Powers Act (50 7 U.S.C. 1701 et seq.), block and prohibit all transactions 8 in all property and interests in property of a person de- 9 scribed in subsection (b) if such property and interests in 10 property are in the United States, come within the United 11 States, or are or come within the possession or control 12 of a United States person. 13 (b) PERSONS DESCRIBED.—A person described in 14 this subsection is— 15 (1) a foreign person that, on or after the date 16 of the enactment of this Act, knowingly sells or oth- 17 erwise provides to, or knowingly purchases from, the 18 People’s Republic of China any covered national in- 19 terest technology or intellectual property subject to 20 the jurisdiction of the United States; or 21 (2) a Chinese person that, on or after such date 22 of enactment, knowingly uses covered national inter- 23 est technology or intellectual property provided to 24 the Chinese person in violation of section 4 or any 25 other export control law of the United States. 26 VerDate Sep 11 2014 05:27 May 23, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1459.IS S1459 kjohnson on DSK79L0C42 with BILLS 8 •S 1459 IS (c) EXCEPTION RELATING TO IMPORTATION OF 1 GOODS.— 2 (1) IN GENERAL.—The requirement to block 3 and prohibit all transactions in all property and in- 4 terests in property under subsection (a) shall not in- 5 clude the authority to impose sanctions on the im- 6 portation of goods. 7 (2) GOOD DEFINED.—In this subsection, the 8 term ‘‘good’’ means any article, natural or man- 9 made substance, material, supply or manufactured 10 product, including inspection and test equipment, 11 and excluding technical data. 12 (d) WAIVER.—The President may waive the imposi- 13 tion of sanctions under subsection (a) with respect to a 14 person if the President determines and reports to Con- 15 gress that the waiver is in the national security interests 16 of the United States. 17 (e) IMPLEMENTATION; PENALTIES.— 18 (1) IMPLEMENTATION.—The President may ex- 19 ercise all authorities provided under sections 203 20 and 205 of the International Emergency Economic 21 Powers Act (50 U.S.C. 1702 and 1704) to carry out 22 this section. 23 (2) PENALTIES.—A person that violates, at- 24 tempts to violate, conspires to violate, or causes a 25 VerDate Sep 11 2014 05:27 May 23, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1459.IS S1459 kjohnson on DSK79L0C42 with BILLS 9 •S 1459 IS violation of subsection (a) or any regulation, license, 1 or order issued to carry out that subsection shall be 2 subject to the penalties set forth in subsections (b) 3 and (c) of section 206 of the International Emer- 4 gency Economic Powers Act (50 U.S.C. 1705) to the 5 same extent as a person that commits an unlawful 6 act described in subsection (a) of that section. 7 (3) INAPPLICABILITY OF NATIONAL EMER- 8 GENCY REQUIREMENT.—The requirements of section 9 202 of the International Emergency Economic Pow- 10 ers Act (50 U.S.C. 1701) shall not apply for pur- 11 poses of this section. 12 SEC. 6. ESTABLISHMENT OF LIST OF CERTAIN PRODUCTS 13 RECEIVING SUPPORT FROM THE GOVERN- 14 MENT OF THE PEOPLE’S REPUBLIC OF CHINA 15 OR USED BY THAT GOVERNMENT FOR 16 HUMAN RIGHTS VIOLATIONS. 17 (a) IN GENERAL.—Chapter 8 of title I of the Trade 18 Act of 1974 (19 U.S.C. 2241 et seq.) is amended by add- 19 ing at the end the following: 20 VerDate Sep 11 2014 05:27 May 23, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1459.IS S1459 kjohnson on DSK79L0C42 with BILLS 10 •S 1459 IS ‘‘SEC. 183. LIST OF CERTAIN PRODUCTS RECEIVING SUP- 1 PORT FROM THE GOVERNMENT OF THE PEO- 2 PLE’S REPUBLIC OF CHINA OR USED BY THAT 3 GOVERNMENT FOR HUMAN RIGHTS VIOLA- 4 TIONS. 5 ‘‘(a) IN GENERAL.—Not later than 120 days after 6 the date of the enactment of the China Technology Trans- 7 fer Control Act of 2019, and annually thereafter, the 8 United States Trade Representative shall set forth a list 9 of products manufactured or produced in, or exported 10 from, the People’s Republic of China that are determined 11 by— 12 ‘‘(1) the Trade Representative— 13 ‘‘(A) to receive support from the Govern- 14 ment of the People’s Republic of China pursu- 15 ant to the Made in China 2025 industrial policy 16 of that Government; or 17 ‘‘(B) to otherwise receive support from 18 that Government and that have or will in the 19 future displace net exports of like products by 20 the United States; or 21 ‘‘(2) the Secretary of State to be used by the 22 Government of the People’s Republic of China to 23 carry out violations of human rights or religious lib- 24 erties. 25 VerDate Sep 11 2014 05:27 May 23, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1459.IS S1459 kjohnson on DSK79L0C42 with BILLS 11 •S 1459 IS ‘‘(b) IDENTIFICATION OF PRODUCTS RECEIVING 1 SUPPORT PURSUANT TO MADE IN CHINA 2025 POLICY.— 2 ‘‘(1) IN GENERAL.—The Trade Representative 3 shall include in the list under subsection (a)(1)(A) 4 any product specified in the following documents set 5 forth by the Government of the People’s Republic of 6 China: 7 ‘‘(A) Notice on Issuing Made in China 8 2025. 9 ‘‘(B) China Manufacturing 2025. 10 ‘‘(C) Notice on Issuing the 13th Five-Year 11 National Strategic Emerging Industries Devel- 12 opment Plan. 13 ‘‘(D) Guiding Opinion on Promoting Inter- 14 national Industrial Capacity and Equipment 15 Manufacturing Cooperation. 16 ‘‘(E) Any other document that expresses a 17 national strategy or stated goal in connection 18 with the Made in China 2025 industrial policy 19 set forth by the Government of the People’s Re- 20 public of China, the Communist Party of China, 21 or another entity or individual capable of im- 22 pacting the national strategy of the People’s 23 Republic of China. 24 VerDate Sep 11 2014 05:27 May 23, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1459.IS S1459 kjohnson on DSK79L0C42 with BILLS 12 •S 1459 IS ‘‘(2) INCLUDED PRODUCTS.—In addition to 1 such products as the Trade Representative shall in- 2 clude pursuant to paragraph (1) in the list under 3 subsection (a)(1)(A), the Trade Representative shall 4 include products in the following industries: 5 ‘‘(A) Civil aircraft. 6 ‘‘(B) Turbine engines. 7 ‘‘(C) Motor car and vehicle. 8 ‘‘(D) Advanced medical equipment. 9 ‘‘(E) Advanced construction equipment. 10 ‘‘(F) Agricultural machinery. 11 ‘‘(G) Railway equipment. 12 ‘‘(H) Diesel locomotive. 13 ‘‘(I) Moving freight. 14 ‘‘(J) Semiconductor. 15 ‘‘(K) Lithium battery manufacturing. 16 ‘‘(L) Artificial intelligence. 17 ‘‘(M) High-capacity computing. 18 ‘‘(N) Quantum computing. 19 ‘‘(O) Robotics. 20 ‘‘(P) Biotechnology.’’. 21 (b) CLERICAL AMENDMENT.—The table of contents 22 for the Trade Act of 1974 is amended by inserting after 23 the item relating to section 182 the following: 24 VerDate Sep 11 2014 05:27 May 23, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1459.IS S1459 kjohnson on DSK79L0C42 with BILLS 13 •S 1459 IS ‘‘Sec. 183. List of certain products receiving support from the Government of the People’s Republic of China or used by that Government for human rights violations.’’. Æ VerDate Sep 11 2014 05:27 May 23, 2019 Jkt 089200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6301 E:\BILLS\S1459.IS S1459 kjohnson on DSK79L0C42 with BILLS