What This Bill Does
This bill prohibits Americans from buying or selling certain Chinese company stocks that operate in defense, weapons, or surveillance technology. The bill also requires the Treasury Department to expand a list of Chinese military-related companies that face sanctions.
Who It Affects
United States persons (American citizens, permanent residents, U.S.-based businesses, and anyone physically in the U.S.) who invest in securities (stocks and similar financial products).
Key Provisions
• Americans cannot purchase or sell publicly traded securities (stocks and stock-like investments) issued by Chinese companies that work in defense, weapons, surveillance technology, or are owned by such companies. (Sec. 3)
• Americans cannot help execute, support or service any purchase or sale of these restricted securities. (Sec. 3)
• The Treasury Secretary must expand the Non-Specially Designated Nationals Chinese Military-Industrial Complex Companies List to include entities that support China's military industry, entities owned by those companies, spin-offs or successors of those companies, and financial service providers for those companies. (Sec. 4)
• If the President decides to waive sanctions on a Chinese entity for national security reasons, the President must notify Congress at least 20 days before the waiver takes effect and explain the reasons. (Sec. 5)
• Within 20 days after ending any sanction, the President must report to Congress on that termination and explain why. (Sec. 5)
What Changes
Americans would no longer be legally permitted to invest in stocks of certain Chinese companies involved in defense, weapons or surveillance work. The list of sanctioned Chinese military-industrial companies would expand to include more entities and their financial partners.
Important Definitions
• Chinese entity: Any organization created under Chinese law or controlled by China's government.
• Publicly traded securities: Stocks and stock-like investments that trade on any stock exchange or over-the-counter (private) market, including derivative securities (investments designed to track other stocks).
• United States person: American citizens, permanent residents, U.S.-based organizations (including foreign branches), or anyone physically located in the United States.
Effective Date
Not specified in bill text
II
118TH CONGRESS
1ST SESSION
S. 852
To prohibit securities investments that finance certain companies of the Peo-
ple’s Republic of China and to expand the Non-Specially Designated
Nationals Chinese Military-Industrial Complex Companies List of the
Office of Foreign Assets Control, and for other purposes.
IN THE SENATE OF THE UNITED STATES
MARCH 16, 2023
Mr. SCOTT of Florida (for himself, Mr. BRAUN, and Mr. HAGERTY) intro-
duced the following bill; which was read twice and referred to the Com-
mittee on Banking, Housing, and Urban Affairs
A BILL
To prohibit securities investments that finance certain com-
panies of the People’s Republic of China and to expand
the Non-Specially Designated Nationals Chinese Military-
Industrial Complex Companies List of the Office of For-
eign Assets Control, 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 Transactions
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Originating from Pernicious Chinese Companies and Poli-
5
cies Act of 2023’’ or the ‘‘STOP CCP Act of 2023’’.
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•S 852 IS
SEC. 2. DEFINITIONS.
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In this Act:
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(1) CHINESE ENTITY.—The term ‘‘Chinese en-
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tity’’ means an entity organized under the laws of
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the People’s Republic of China or otherwise subject
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to the jurisdiction of the Government of the People’s
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Republic of China.
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(2) PUBLICLY TRADED SECURITIES.—The term
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‘‘publicly traded securities’’ includes—
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(A) any security (as defined in section 3(a)
10
of the Securities Exchange Act of 1934 (15
11
U.S.C. 78c(a))) denominated in any currency
12
that trades on a securities exchange, or through
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the method of trading that is commonly re-
14
ferred to as ‘‘over-the-counter’’, in any jurisdic-
15
tion; and
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(B) any security that is derivative of or de-
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signed to provide investment exposure to a se-
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curity described in subparagraph (A).
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(3)
UNITED
STATES
PERSON.—The
term
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‘‘United States person’’ means—
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(A) an individual who is a United States
22
citizen or an alien lawfully admitted for perma-
23
nent residence to the United States;
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(B) an entity organized under the laws of
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the United States or any jurisdiction within the
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•S 852 IS
United States, including a foreign branch of
1
such an entity; or
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(C) any person in the United States.
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SEC. 3. PROHIBITION ON SECURITIES INVESTMENTS THAT
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FINANCE CERTAIN COMPANIES OF THE PEO-
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PLE’S REPUBLIC OF CHINA.
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The following activities by a United States person are
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prohibited:
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(1) The purchase or sale of any publicly traded
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securities, or any publicly traded securities that are
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derivative of such securities or are designed to pro-
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vide investment exposure to such securities, issued
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by any person determined by the Secretary of the
13
Treasury, in consultation with the Secretary of
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State, and, as the Secretary of the Treasury deems
15
appropriate, the Secretary of Defense—
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(A) to operate or have operated in the de-
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fense and related materiel sector or the surveil-
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lance technology sector of the economy of the
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People’s Republic of China; or
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(B) to own or control, or to be owned or
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controlled by, directly or indirectly, a person de-
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scribed in subparagraph (A).
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(2) The execution, support, or servicing of a
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purchase or sale described in paragraph (1).
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•S 852 IS
(3) Any transaction that evades or avoids, has
1
the purpose of evading or avoiding, causes a viola-
2
tion of, or attempts to violate the prohibition under
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paragraph (1).
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(4) Any conspiracy formed to violate the prohi-
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bition under paragraph (1).
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SEC. 4. EXPANSION OF NON-SPECIALLY DESIGNATED NA-
7
TIONALS
CHINESE
MILITARY-INDUSTRIAL
8
COMPLEX COMPANIES LIST.
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Not later than 180 days after the date of the enact-
10
ment of this Act, the Secretary of the Treasury shall pre-
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scribe regulations to expand the Non-Specially Designated
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Nationals Chinese Military-Industrial Complex Companies
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List (commonly referred to as the ‘‘NS–CMIC List’’) of
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the Office of Foreign Assets Control to include—
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(1) any entity engaged in supporting the Chi-
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nese military-industrial complex;
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(2) any entity that is owned or controlled by an
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entity described in paragraph (1);
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(3) any entity that is formed from a spin-off,
20
merger or acquisition, or sale of a business unit in-
21
volving an entity described in paragraph (1) or is
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otherwise a successor to such an entity; and
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(4) any entity that provides financial services
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for an entity described in paragraph (1), (2), or (3).
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•S 852 IS
SEC. 5. CLOSING SANCTIONS LOOPHOLES.
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(a) IN GENERAL.—If sanctions are imposed with re-
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spect to a Chinese entity under any statute or Executive
3
order described in subsection (b), sanctions shall be im-
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posed with respect to the Chinese entity under each other
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applicable statute and Executive order described in sub-
6
section (b) unless—
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(1) the President waives the imposition of such
8
sanctions; or
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(2) a waiver provided for under such other stat-
10
ute or Executive order applies.
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(b) STATUTES
AND
EXECUTIVE
ORDERS
DE-
12
SCRIBED.—A statute or Executive order described in this
13
subsection is a statute or Executive order that provides
14
for the imposition of sanctions.
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(c) NATIONAL SECURITY WAIVER.—
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(1) IN
GENERAL.—The President may waive
17
the application of any sanction imposed with respect
18
to any person under subsection (a) if the President
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determines and certifies to Congress that such a
20
waiver is important to the national security interests
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of the United States.
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(2) NOTIFICATION OF AND REPORT TO CON-
23
GRESS.—If the President decides to exercise the
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waiver authority provided under paragraph (1), the
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•S 852 IS
President shall, not less than 20 days before the
1
waiver takes effect, submit to Congress a report—
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(A) notifying Congress of the decision to
3
exercise the waiver authority; and
4
(B) fully articulating the rationale and cir-
5
cumstances that led to the decision.
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(d) TERMINATION OF SANCTIONS TO BE REPORTED
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TO CONGRESS.—Not later than 20 days after the termi-
8
nation of any sanction under subsection (a), the President
9
shall promptly submit to Congress a report on that termi-
10
nation and the reasons for the termination.
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Æ
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