To codify the denial of export privileges and related provisions under title 15, Code of Federal Regulations.

I 116TH CONGRESS 2D SESSION H. R. 8831 To codify the denial of export privileges and related provisions under title 15, Code of Federal Regulations. IN THE HOUSE OF REPRESENTATIVES DECEMBER 2, 2020 Mr. BUCK introduced the following bill; which was referred to the Committee on Foreign Affairs A BILL To codify the denial of export privileges and related provisions under title 15, Code of Federal Regulations. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. FINDINGS. 3 Congress finds the following: 4 (1) The Founders of the United States viewed 5 intellectual property rights as fundamental rights 6 that must be protected by the government. 7 (2) Article I, section 8, clause 8 of the United 8 States Constitution affirmatively defends the individ- 9 ual’s right to protect intellectual property by grant- 10 VerDate Sep 11 2014 20:22 Dec 09, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8831.IH H8831 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 8831 IH ing Congress power ‘‘to promote the Progress of 1 Science and Useful arts, by securing, for limited 2 Times, to Authors and Inventors, the exclusive Right 3 to their respective Writings and Discoveries’’. 4 (3) The Commission on the Theft of American 5 Intellectual Property estimates that intellectual 6 property theft costs the United States economy ap- 7 proximately $600 billion annually. 8 (4) A March 1, 2019, CNBC poll found that 9 one-in-five United States corporations say that 10 China has stolen proprietary intellectual property 11 within the last year and one-in-three United States 12 corporations state that China has stolen their intel- 13 lectual property within the last decade. 14 (5) The Commission on the Theft of American 15 Intellectual Property further reports that China’s in- 16 dustrial policies call for the ‘‘absorption, digestion, 17 and re-innovation of foreign intellectual property to 18 meet the Made in China 2025 goal of 40 percent 19 self-sufficiency by 2020 and 75 percent by 2025’’. 20 (6) The Chinese Government remains the 21 world’s principle source of intellectual property theft. 22 (7) China engages in foreign ownership restric- 23 tions that include joint venture requirements and ad- 24 ministrative reviews that pressure United States 25 VerDate Sep 11 2014 20:22 Dec 09, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8831.IH H8831 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 8831 IH companies to transfer intellectual property and pro- 1 prietary technology to Chinese companies. 2 (8) China imposes harmful contractual obliga- 3 tions on United States companies seeking to license 4 their proprietary technology to Chinese-based firms 5 and is engaged in a purposeful and unfair practice 6 of acquiring United States businesses to generate 7 technology transfers. 8 (9) The Chinese Government is engaged in 9 cyber attacks against United States businesses, mili- 10 tary installations, and government entities, including 11 the United States Office of Personnel Management, 12 resulting in the theft of untold proprietary informa- 13 tion and commercial trade secrets. 14 (10) China is undertaking the ‘‘greatest intel- 15 lectual property theft in human history’’ according 16 to Secretary of Defense Mark Esper. 17 (11) Congress must take bold action to combat 18 the Chinese Government’s concerted efforts to per- 19 petrate cyber attacks against United States entities 20 and steal United States intellectual property. 21 (12) Denial orders are issued by the Assistant 22 Secretary of Commerce for Export Enforcement of 23 the Bureau of Industry and Security to deny the ex- 24 port privileges of an entity or individual. A denial of 25 VerDate Sep 11 2014 20:22 Dec 09, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8831.IH H8831 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 8831 IH export privileges prohibits the person from partici- 1 pating in any way in any transaction subject to the 2 Export Administration Regulations (EAR). Further- 3 more, it is unlawful for any other entity or indi- 4 vidual to participate in any way in an export trans- 5 action subject to the EAR with a person subject to 6 a denial order. 7 (13) On April 16, 2018, Secretary of Commerce 8 Wilbur Ross announced that the Bureau of Industry 9 and Security of the Department of Commerce had 10 issued an order to deny the export privileges of 11 Zhongxing Telecommunications Equipment Corpora- 12 tion of Shenzhen, China (‘‘ZTE Corporation’’) and 13 ZTE Kangxun Telecommunications Ltd. of Hi-New 14 Shenzhen, China. 15 SEC. 2. SENSE OF CONGRESS. 16 It is the sense of Congress that— 17 (1) denial orders are an important foreign pol- 18 icy tool to use against foreign entities and individ- 19 uals, especially Chinese persons, with a pattern of 20 violating United States laws, especially laws relating 21 to intellectual property; and 22 (2) the Department of Commerce should vigor- 23 ously utilize denial orders to hold such persons ac- 24 countable. 25 VerDate Sep 11 2014 20:22 Dec 09, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8831.IH H8831 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 8831 IH SEC. 3. STRATEGY. 1 Not later than one year after the date of the enact- 2 ment of this Act, the Secretary of Commerce, in consulta- 3 tion with the Secretary of State, the Secretary of Treas- 4 ury, and Attorney General, shall submit to Congress a 5 strategy regarding how denial orders issued by the Bureau 6 of Industry and Security of the Department of Commerce 7 to deny the export privileges of foreign entities and indi- 8 viduals, especially entities and individuals located in 9 China, can be better utilized as part of a holistic approach 10 to hold such entities and individuals accountable for theft 11 of United States intellectual property. 12 SEC. 4. CODIFICATION OF DENIAL OF EXPORT PRIVILEGES 13 AND RELATED PROVISIONS UNDER TITLE 15, 14 CODE OF FEDERAL REGULATIONS. 15 The provisions of part 730 of title 15, Code of Fed- 16 eral Regulations, relating to general information, and sec- 17 tion 766.25 of such title, relating to administrative action 18 denying export privileges, are hereby enacted into law. 19 Æ VerDate Sep 11 2014 20:22 Dec 09, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H8831.IH H8831 pbinns on DSKJLVW7X2PROD with BILLS