Protecting National Security in Financial Investments Act

I 116TH CONGRESS 2D SESSION H. R. 8407 To require the Securities and Exchange Commission to assess whether the disclosure of information related to investments in certain entities is necessary or appropriate for the purposes of certain reports under the securities laws, to establish the Entities of the People’s Republic of China that Threaten United States National Security List, and for other purposes. IN THE HOUSE OF REPRESENTATIVES SEPTEMBER 29, 2020 Mr. RESCHENTHALER (for himself, Mr. MCCAUL, and Mr. RIGGLEMAN) intro- duced the following bill; which was referred to the Committee on Finan- cial Services, and in addition to the Committee on Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the com- mittee concerned A BILL To require the Securities and Exchange Commission to as- sess whether the disclosure of information related to investments in certain entities is necessary or appropriate for the purposes of certain reports under the securities laws, to establish the Entities of the People’s Republic of China that Threaten United States National Security List, 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 VerDate Sep 11 2014 18:47 Oct 21, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8407.IH H8407 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 8407 IH SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Protecting National 2 Security in Financial Investments Act’’. 3 SEC. 2. ASSESSMENT OF INFORMATION WITH RESPECT TO 4 INVESTMENTS IN CERTAIN ENTITIES. 5 (a) IN GENERAL.—Not later than 360 days following 6 the date of the enactment of this Act, the Securities and 7 Exchange Commission, in consultation with the Secretary 8 of the Treasury, shall submit to the Committee on Finan- 9 cial Services of the House of Representatives and the 10 Committee on Banking, Housing, and Urban Affairs of 11 the Senate a report assessing whether disclosure of invest- 12 ments in entities on the entity list by an issuer qualifies 13 as necessary or appropriate for the purposes of section 14 13(a) of the Securities Exchange Act of 1934. 15 (b) RULEMAKING.—Not later than 180 days fol- 16 lowing submission of the report required under subsection 17 (a), the Securities and Exchange Commission shall pre- 18 scribe regulations requiring an issuer to disclose in any 19 annual report required under section 13 of the Securities 20 Exchange Act of 1934, and in any prospectus in connec- 21 tion with an initial public offering, the information as- 22 sessed by the Commission in such report to be necessary 23 or appropriate for the purposes of subsection (a) of such 24 section 13. 25 (c) DEFINITIONS.—In this section: 26 VerDate Sep 11 2014 18:47 Oct 21, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8407.IH H8407 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 8407 IH (1) ENTITY LIST.—The term ‘‘entity list’’ 1 means the list maintained by the Bureau of Industry 2 and Security of the Department of Commerce and 3 set forth in Supplement No. 4 to part 744 of the 4 Export Administration Regulations. 5 (2) EXPORT ADMINISTRATION REGULATIONS.— 6 The term ‘‘Export Administration Regulations’’ 7 means subchapter C of chapter VII of title 15, Code 8 of Federal Regulations. 9 SEC. 3. ENTITIES OF THE PEOPLE’S REPUBLIC OF CHINA 10 THAT THREATEN UNITED STATES NATIONAL 11 SECURITY LIST. 12 (a) IN GENERAL.—Not later than one year after the 13 date of the enactment of this Act, and annually thereafter, 14 the Secretary of State, in consultation with the Director 15 of National Intelligence, the Secretary of Defense, and the 16 Secretary of Commerce, shall submit to the Congress a 17 list of— 18 (1) each entity of the People’s Republic of 19 China associated with the People’s Liberation Army, 20 the Chinese People’s Armed Police Force, the Min- 21 istry of State Security, or the China Coast Guard, 22 including any entity that— 23 (A) is a listed military supplier; 24 VerDate Sep 11 2014 18:47 Oct 21, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8407.IH H8407 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 8407 IH (B) is licensed to engage in military pro- 1 duction; 2 (C) is carrying out a declared military-civil 3 fusion business strategy; 4 (D) is a military factory representative, on- 5 site; 6 (E) maintains an office in a military-civil 7 fusion-linked industrial zone; 8 (F) is a defense contractor or is involved 9 in a defense contractor partnership; 10 (G) is engaged in collaborative efforts with 11 a defense research and development university; 12 (H) is a subsidiary of a defense university; 13 or 14 (I) is a military-civil fusion funding pro- 15 vider or recipient; and 16 (2) each entity of the People’s Republic of 17 China that is owned, controlled, or influenced by an 18 entity on the entity list. 19 (b) REFERENCE.—The list required by subsection (a) 20 may be referred to as the ‘‘Entities of the People’s Repub- 21 lic of China that Threaten United States National Secu- 22 rity List’’. 23 (c) PUBLIC AVAILABILITY.—The Secretary of State 24 shall make each list submitted pursuant to subsection (a) 25 VerDate Sep 11 2014 18:47 Oct 21, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8407.IH H8407 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 8407 IH available to the public, including on a website of the De- 1 partment of State, but shall remove any classified portions 2 of such list. 3 (d) STATEMENT OF POLICY.—It is the policy of the 4 United States that the Entities of the People’s Republic 5 of China that Threaten United States National Security 6 List should inform Federal Government policy. 7 (e) DEFINITIONS.—In this section: 8 (1) ENTITY LIST.—The term ‘‘entity list’’ 9 means the list maintained by the Bureau of Industry 10 and Security of the Department of Commerce and 11 set forth in Supplement No. 4 to part 744 of the 12 Export Administration Regulations. 13 (2) EXPORT ADMINISTRATION REGULATIONS.— 14 The term ‘‘Export Administration Regulations’’ 15 means subchapter C of chapter VII of title 15, Code 16 of Federal Regulations. 17 Æ VerDate Sep 11 2014 18:47 Oct 21, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H8407.IH H8407 pamtmann on DSKBC07HB2PROD with BILLS