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Title II — Protecting the United States from China’s discriminatory economic practices

S. 4272 · 116th Congress · Jul 22, 2020 · Lineage

II Protecting the United States from China’s discriminatory economic practices

Sec. 201 Findings and sense of Congress regarding the PRC’s industrial policy

(a)
Findings— Congress makes the following findings:
(1)
The People’s Republic of China, at the direction of the Chinese Communist Party, is advancing an ecosystem of anticompetitive economic and industrial policies that—
(A)
distort global markets;
(B)
limit innovation;
(C)
unfairly advantage PRC firms at the expense of the United States and other foreign firms; and
(D)
unfairly and harmfully prejudice consumer choice.
(2)
Of the extensive and systemic economic and industrial policies pursued by the PRC, the mass subsidization of Chinese firms, intellectual property theft, and forced technology transfer are among the most damaging to the global economy.
(3)
Through regulatory interventions and direct financial subsidies, the CCP, for the purposes of advancing national political and economic objectives, directs, coerces, and influences in anti-competitive ways the commercial activities of firms that are directed, financed, influenced, or otherwise controlled by the state, including state-owned enterprises, and ostensibly independent and private Chinese companies, such as technology firms in strategic sectors.
(4)
The PRC Government, at the national and subnational levels, grants special privileges or status to certain PRC firms in key sectors designated as strategic, such as telecommunications, oil, power, aviation, banking, and semiconductors. Enterprises receive special state preferences in the form of favorable loans, tax exemptions, and preferential land access from the CCP.
(5)
The subsidization of PRC companies, as described in paragraphs (3) and (4)—
(A)
enables these companies to sell goods below market prices, allowing them to outbid and crowd out market-based competitors and thereby pursue global dominance of key sectors;
(B)
distorts the global market economy by undermining longstanding and generally accepted market-based principles of fair competition, leading to barriers to entry and forced exit from the market for foreign or private firms, not only in the PRC, but in markets around the world;
(C)
creates government-sponsored or supported de facto monopolies, cartels, and other anti-market arrangements in key sectors, limiting or removing opportunities for other firms; and
(D)
leads to, as a result of the issues described in paragraphs (A) through (C), declines in profits and revenue needed by foreign and private firms for research and development.
(6)
The CCP incentivizes and empowers Chinese actors to steal critical technologies and trade secrets from private and foreign competitors operating in the PRC and around the world, particularly in areas that the CCP has identified as critical to advancing PRC objectives. The PRC, as directed by the CCP, also continues to implement anti-competitive regulations, policies, and practices that coerce the handover of technology and other propriety or sensitive data from foreign enterprises to domestic firms in exchange for access to the PRC market.
(7)
Companies in the United States and in foreign countries compete with state-subsidized PRC companies that enjoy the protection and power of the state in third-country markets around the world. The advantages granted to PRC firms, combined with significant restrictions to accessing the PRC market itself, severely hamper the ability of United States and foreign firms to compete, innovate, and pursue the provision of best value to customers. The result is an unbalanced playing field. Such an unsustainable course, if not checked, will over time lead to depressed competition around the world, reduced opportunity, and harm to both producers and consumers.
(8)
As stated in the United States Trade Representative’s investigation of the PRC’s trade practices under section 301 of the Trade Act of 1974 (19 U.S.C. 2411), conducted in March 2018, “When U.S. companies are deprived of fair returns on their investment in IP, they are unable to achieve the growth necessary to reinvest in innovation. In this sense, China’s technology transfer regime directly burdens the innovation ecosystem that is an engine of economic growth in the United States and similarly-situated economies.”.
(9)
In addition to forced technology described in this subsection, the United States Trade Representative’s investigation of the PRC under section 301 of the Trade Act of 1974 (19 U.S.C. 2411) also identified requirements that foreign firms license products at less than market value, government-directed and government-subsidized acquisition of sensitive technology for strategic purposes, and cyber theft as other key PRC technology and industrial policies that are unreasonable and discriminatory. These policies place at risk United States intellectual property rights, innovation and technological development, and jobs in dozens of industries.
(10)
Other elements of the PRC’s ecosystem of industrial policies that harm innovation and distort global markets include—
(A)
advancement of policies that encourage local production over imports;
(B)
continuation of policies that favor unique technical standards in use by Chinese firms rather than globally accepted standards, which often force foreign firms to alter their products and manufacturing chains to compete;
(C)
requirements that foreign companies disclose proprietary information to qualify for the adoption of their standards for use in the PRC domestic market; and
(D)
maintenance of closed procurement processes, which limit participation by foreign firms, including by setting terms that require such firms to use domestic suppliers, transfer know-how to firms in the PRC, and disclose proprietary information.
(11)
The Belt and Road Initiative (BRI) and associated industry-specific efforts under this initiative, such as the Digital Silk Road, are key vectors to advance the PRC’s mercantilist policies and practices globally. The resulting challenges do not only affect United States firms. As the European Chamber of Commerce reported in a January 2020 report, the combination of concessional lending to Chinese state-owned enterprises, nontransparent procurement and bidding processes, closed digital standards, and other factors severely limit European and other participation in BRI and make “competition [with Chinese companies] in third-country markets extremely challenging”. This underscores a key objective of BRI, which is to ensure the reliance of infrastructure, digital technologies, and other important goods on PRC supply chains and technical standards.
(b)
Sense of Congress— It is the sense of Congress that—
(1)
the challenges presented by a nonmarket economy like the PRC’s economy, which has captured such a large share of global economic exchange, are in many ways unprecedented and require sufficiently elevated and sustained long-term focus and engagement;
(2)
while the Economic and Trade Agreement Between the Government of the United States and the Government of the People’s Republic of China, done at Washington January 15, 2020, makes initial progress in several areas, including intellectual property and trade secret protection, significant further steps are still required to address some of the more difficult economic and industrial policies issues in the PRC, which affect the United States and other nations;
(3)
in order to truly address the most detrimental aspects of CCP-directed mercantilist economic strategy, the United States must adopt policies that—
(A)
expose the full scope and scale of intellectual property theft and mass subsidization of Chinese firms, and the resulting harm to the United States, foreign markets, and the global economy;
(B)
ensure that PRC companies face costs and consequences for anticompetitive behavior;
(C)
provide options for affected United States persons to address and respond to unreasonable and discriminatory CCP-directed industrial policies; and
(D)
strengthen the protection of critical technology and sensitive data, while still fostering an environment that provides incentives for innovation and competition;
(4)
the United States must work with its allies and partners through the Organization for Economic Cooperation and Development (OECD), the World Trade Organization, and other venues and fora—
(A)
to reinforce long-standing generally accepted principles of fair competition and market behavior and address the PRC’s anticompetitive economic and industrial policies that undermine decades of global growth and innovation;
(B)
to ensure that the PRC is not granted the same treatment as that of a free-market economy until it ceases the implementation of laws, regulations, policies, and practices that provide unfair advantage on PRC firms in furtherance of national objectives and impose unreasonable, discriminatory, and illegal burdens on market-based international commerce; and
(C)
to align policies with respect to curbing state-directed subsidization of the private sector, such as advocating for global rules related to transparency and adherence to notification requirements, including through the efforts currently being advanced by the United States, Japan, and the European Union; and
(5)
the United States and its allies and partners must collaborate to provide incentives to their respective companies to cooperate in areas such as—
(A)
advocating for protection of intellectual property rights in markets around the world;
(B)
fostering open technical standards; and
(C)
increasing joint investments in overseas markets.

Sec. 202 Intellectual property violators list

(a)
In general— Not later than 1 year after the date of the enactment of this Act, and not less frequently than annually thereafter, the Secretary of State, in coordination with the Secretary of Commerce, the United States Trade Representative, and the Director of National Intelligence, shall create a list (referred to in this section as the “intellectual property violators list”), which identifies all centrally administered, state-owned enterprises that have benefitted from—
(1)
a significant act or series of acts of intellectual property theft that subjected a United States economic sector or particular company incorporated in the United States to harm; or
(2)
an act or government policy of involuntary or coerced technology transfer of intellectual property ultimately owned by a company incorporated in the United States.
(b)
Rules for identification— To determine whether there is a credible basis for determining that a company should be included on the intellectual property violators list, the Secretary of State, in coordination with the Secretary of Commerce, the United States Trade Representative, and the Director of National Intelligence, shall consider—
(1)
any finding by a United States court that the company has violated relevant United States laws intended to protect intellectual property rights;
(2)
a decision by the President to impose sanctions authorized under section 204(e); or
(3)
substantial and credible information received from any entity described in subsection (c) or other interested persons.
(c)
Consultation— In carrying out this section, the Secretary of State, in coordination with the Secretary of Commerce, the United States Trade Representative, and the Director of National Intelligence, may consult, as necessary and appropriate, with—
(1)
other Federal agencies, including independent agencies;
(2)
the private sector; and
(3)
civil society organizations with relevant expertise.
(d)
Report—
(1)
In general— The Secretary of State shall publish, in the Federal Register, an annual report that—
(A)
lists the companies engaged in the activities described in subsection (a)(1); and
(B)
describes the circumstances surrounding actions described in subsection (a)(2), including any role of the Government of the PRC; and
(C)
assesses, to the extent practicable, the economic advantage derived by the companies engaged in the activities described in subsection (a)(1).
(2)
Form— The report published under paragraph (1) shall be unclassified, but may include a classified annex.
(e)
Declassification and release— The Director of National Intelligence may authorize the declassification of information, as appropriate, to inform the contents of the report published pursuant to subsection (d).
(f)
Requirement To protect business-Confidential information—
(1)
In general— The Secretary of State and the heads of all other Federal agencies involved in the production of the intellectual property violators list shall protect from disclosure any proprietary information submitted by a private sector participant and marked as business-confidential information, unless the party submitting the confidential business information—
(A)
had notice, at the time of submission, that such information would be released by the Secretary; or
(B)
subsequently consents to the release of such information.
(2)
Nonconfidential version of report— If confidential business information is provided by a private sector participant, a nonconfidential version of the report under subsection (d) shall be published in the Federal Register that summarizes or deletes, if necessary, the confidential business information.
(3)
Treatment as trade secrets— Proprietary information submitted by a private party under this section—
(A)
shall be considered to be trade secrets and commercial or financial information (as defined under section 552(b)(4) of title 5, United States Code); and
(B)
shall be exempt from disclosure without the express approval of the private party.

Sec. 203 Government of the People’s Republic of China subsidies list

(a)
Report— Not later than 1 year after the date of the enactment of this Act, and annually thereafter, the Secretary of State, in coordination with the United States Trade Representative and the Secretary of Commerce, shall publish an unclassified report in the Federal Register that comprehensively identifies and measures—
(1)
subsidies provided by the Government of the PRC to enterprises in the PRC in contravention of agreed trade and other rules; and
(2)
discriminatory treatment favoring enterprises in the PRC over foreign market participants.
(b)
Subsidies described— In compiling the report under subsection (a), the Secretary of State shall consider—
(1)
regulatory and other policies enacted or promoted by the Government of the PRC that—
(A)
discriminate in favor of enterprises in the PRC at the expense of foreign market participants;
(B)
shield centrally administered, state-owned enterprises from competition; or
(C)
otherwise suppress market-based competition;
(2)
financial subsidies, including favorable lending terms, from or promoted by the Government of the PRC or centrally administered, state-owned enterprises that materially benefit PRC enterprises over foreign market participants in contravention of generally accepted market principles; and
(3)
any subsidy that violates the agreement referred to in section 101(d)(12) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(12)) (commonly known as the World Trade Organization’s Agreement on Subsidies and Countervailing Measures).
(c)
Consultation— The Secretary of State, in coordination with the Secretary of Commerce and the United States Trade Representative, may, as necessary and appropriate, consult with—
(1)
other Federal agencies, including independent agencies;
(2)
the private sector; and
(3)
civil society organizations with relevant expertise.

Sec. 204 Review of petitions related to intellectual property theft and forced technology transfer

(a)
Definitions— In this section:
(1)
Appropriate congressional committees— The term appropriate congressional committees means—
(A)
the Committee on Foreign Relations of the Senate;
(B)
the Committee on Banking, Housing, and Urban Affairs of the Senate;
(C)
the Committee on Commerce, Science, and Transportation of the Senate;
(D)
the Committee on the Judiciary of the Senate;
(E)
the Committee on Foreign Affairs of the House of Representatives;
(F)
the Committee on Financial Services of the House of Representatives;
(G)
the Committee on Energy and Commerce of the House of Representatives; and
(H)
the Committee on the Judiciary of the House of Representatives.
(2)
Committee— The term Committee means the committee established or designated under subsection (b).
(3)
Foreign person— The term foreign person means a person that is not a United States person.
(4)
Intellectual property— The term intellectual property means—
(A)
any work protected by a copyright under title 17, United States Code;
(B)
any property protected by a patent granted by the United States Patent and Trademark Office under title 35, United States Code;
(C)
any word, name, symbol, or device, or any combination thereof, that is registered as a trademark with the United States Patent and Trademark Office under the Act entitled “An Act to provide for the registration and protection of trademarks used in commerce, to carry out the provisions of certain international conventions, and for other purposes”, approved July 5, 1946 (commonly known as the “Lanham Act” or the “Trademark Act of 1946”) (15 U.S.C. 1051 et seq.);
(D)
a trade secret (as defined in section 1839 of title 18, United States Code); or
(E)
any other form of intellectual property.
(5)
United States person— The term United States person means—
(A)
a United States citizen or an alien lawfully admitted for permanent residence to the United States; or
(B)
an entity organized under the laws of the United States or any jurisdiction within the United States, including a foreign branch of such an entity.
(b)
Establishment of a committee—
(1)
In general— The President shall—
(A)
establish a multi-agency committee to carry out this section; or
(B)
designate an existing multi-agency committee within the executive branch to carry out this section if the President determines that the existing committee has the relevant expertise and personnel to carry out this section.
(2)
Membership— The Committee shall be comprised of the following officials (or, subject to paragraph (3), a designee of any such official):
(A)
The Secretary of the Treasury.
(B)
The Secretary of Commerce.
(C)
The Secretary of State.
(D)
The Attorney General.
(E)
The Director of National Intelligence.
(F)
The heads of such other agencies as the President determines appropriate, generally or on a case-by-case basis.
(3)
Designee— An official specified in paragraph (2) may select a designee to serve on the Committee from among individuals serving in positions appointed by the President by and with the advice and consent of the Senate.
(4)
Chair and vice chair— The President shall appoint a chairperson and a vice chairperson of the Committee from among the members of the Committee.
(c)
Submission of petitions—
(1)
In general— A United States person described in paragraph (3) may submit a petition to the Committee requesting that the Committee—
(A)
review, under subsection (d), a significant act or series of acts described in paragraph (2) committed by a foreign person; and
(B)
refer the matter to the President with a recommendation to impose sanctions under subsection (e) to address any threat to the national security of the United States posed by the significant act or series of acts.
(2)
Significant act or series of acts described— A significant act or series of acts described in this paragraph is a significant act or series of acts of—
(A)
theft of intellectual property of a United States person; or
(B)
forced transfer of technology that is the intellectual property of a United States person.
(3)
United States person described— A United States person is described in this paragraph if—
(A)
a court of competent jurisdiction in the United States has rendered a final judgment in favor of the United States person that—
(i)
the foreign person identified in the petition submitted under paragraph (1) committed the significant act or series of acts identified in the petition;
(ii)
the United States person is the owner of the intellectual property identified in the petition; and
(iii)
the foreign person is using that intellectual property without the permission of the United States person; and
(B)
the United States person can provide clear and convincing evidence to the Committee that the value of the economic loss to the United States person resulting from the significant act or series of acts exceeds $10,000,000.
(d)
Review and action by the Committee—
(1)
Review— Upon receiving a petition under subsection (c), the Committee shall conduct a review of the petition in order to determine whether the imposition of sanctions under subsection (e) is necessary and appropriate to address any threat to the national security of the United States posed by the significant act or series of acts identified in the petition.
(2)
Action— After conducting a review under paragraph (1) of a petition submitted under subsection (c), the Committee may take no action, dismiss the petition, or refer the petition to the President with a recommendation with respect to whether to impose sanctions under subsection (e).
(e)
Imposition of sanctions—
(1)
In general— The President may impose the sanctions described in paragraph (3) with respect to a foreign person identified in a petition submitted under subsection (c) if the President determines that imposing such sanctions is necessary and appropriate to address any threat to the national security of the United States posed by the significant act or series of acts identified in the petition.
(2)
Notice to Congress— Not later than 30 days after the Committee refers a petition to the President with a recommendation under subsection (d)(2), the President shall submit to the appropriate congressional committees a notice of the determination of the President under paragraph (1) with respect to whether or not to impose sanctions described in paragraph (3) with respect to each foreign person identified in the petition. Each notice required under this paragraph shall be submitted in unclassified form, but may include a classified annex.
(3)
Sanctions described— The sanctions that may be imposed under paragraph (1) with respect to a foreign person identified in a petition submitted under subsection (c) are the following:
(A)
Export sanction— The President may order the United States Government not to issue any specific license and not to grant any other specific permission or authority to export any goods or technology to the person under—
(i)
the Export Control Reform Act of 2018 (50 U.S.C. 4801 et seq.);
(ii)
the Arms Export Control Act (22 U.S.C. 2751 et seq.);
(iii)
the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.); or
(iv)
any other statute that requires the prior review and approval of the United States Government as a condition for the export or reexport of goods or services.
(B)
Loans from United States financial institutions— The President may prohibit any United States financial institution from making loans or providing credits to the person totaling more than $10,000,000 in any 12-month period unless the person is engaged in activities to relieve human suffering and the loans or credits are provided for such activities.
(C)
Loans from international financial institutions— The President may direct the United States executive director to each international financial institution to use the voice and vote of the United States to oppose any loan from the international financial institution that would benefit the person.
(D)
Prohibitions on financial institutions— The following prohibitions may be imposed against the person if the person is a financial institution:
(i)
Prohibition on designation as primary dealer— Neither the Board of Governors of the Federal Reserve System nor the Federal Reserve Bank of New York may designate, or permit the continuation of any prior designation of, the financial institution as a primary dealer in United States Government debt instruments.
(ii)
Prohibition on service as a repository of Government funds— The financial institution may not serve as agent of the United States Government or serve as repository for United States Government funds.
(E)
Procurement sanction— The President may prohibit the United States Government from procuring, or entering into any contract for the procurement of, any goods or services from the person.
(F)
Foreign exchange— The President may, pursuant to such regulations as the President may prescribe, prohibit any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which the person has any interest.
(G)
Banking transactions— The President may, pursuant to such regulations as the President may prescribe, prohibit any transfers of credit or payments between financial institutions or by, through, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of the person.
(H)
Property transactions— The President may, pursuant to such regulations as the President may prescribe, prohibit any person from—
(i)
acquiring, holding, withholding, using, transferring, withdrawing, transporting, importing, or exporting any property that is subject to the jurisdiction of the United States and with respect to which the person identified in the petition has any interest;
(ii)
dealing in or exercising any right, power, or privilege with respect to such property; or
(iii)
conducting any transaction involving such property.
(I)
Ban on investment in equity or debt of sanctioned person— The President may, pursuant to such regulations or guidelines as the President may prescribe, prohibit any United States person from investing in or purchasing significant amounts of equity or debt instruments of the person.
(J)
Exclusion of corporate officers— The President may direct the Secretary of State to deny a visa to, and the Secretary of Homeland Security to exclude from the United States, any alien that the President determines is a corporate officer or principal of, or a shareholder with a controlling interest in, the person.
(K)
Sanctions on principal executive officers— The President may impose on the principal executive officer or officers of the person, or on individuals performing similar functions and with similar authorities as such officer or officers, any of the sanctions described in this paragraph.
(f)
Implementation; penalties—
(1)
Implementation— The President may exercise all authorities provided to the President under sections 203 and 205 of the International Emergency Economic Powers Act (50 U.S.C. 1702 and 1704) to carry out this section.
(2)
Penalties— A person that violates, attempts to violate, conspires to violate, or causes a violation of this section or any regulation, license, or order issued to carry out this section shall be subject to the penalties set forth in subsections (b) and (c) of section 206 of the International Emergency Economic Powers Act (50 U.S.C. 1705) to the same extent as a person that commits an unlawful act described in subsection (a) of that section.
(g)
Confidentiality of information—
(1)
In general— The Committee shall protect from disclosure any proprietary information submitted by a United States person and marked as business confidential information, unless the person submitting the information—
(A)
had notice, at the time of submission, that the information would be released by the Committee; or
(B)
subsequently consents to the release of the information.
(2)
Treatment as trade secrets— Proprietary information submitted by a United States person under this section shall be—
(A)
considered to be trade secrets and commercial or financial information (as defined under section 552(b)(4) of title 5, United States Code);
(B)
exempt from disclosure without the express approval of the person.
(h)
Rulemaking— The President may prescribe such licenses, orders, and regulations as are necessary to carry out this section, including with respect to the process by which United States persons may submit petitions under subsection (c).

Sec. 205 Predatory pricing by entities owned, controlled, or directed by a foreign state

(a)
Prohibited acts—
(1)
In general— It is contrary to public policy, illegal, and void for a combination, conspiracy, trust, agreement, or contract executed by an entity owned, controlled, or directed by a foreign state or an agent or instrumentality of a foreign state (as defined in section 1603 of title 28, United States Code) and participating in international commerce to engage in acts to establish or set prices below the average variable cost in a manner that may foreseeably eliminate market competitors.
(2)
Economic support— In determining the average variable cost under paragraph (1), the court may take into account the effects of economic support provided by the owning or controlling foreign state to the entity on a discriminatory basis that may allow the entity to unfairly price at or below marginal cost.
(3)
Government subsidies— In determining the foreseeability of the elimination of market competitors under paragraph (1), the court may take into account the aggravating factor of the actions of the foreign state owning or controlling the entity referred to in such paragraph to use government resources to subsidize or underwrite the losses of the entity in a manner that allows the entity to sustain the predatory period and recoup its losses.
(b)
Recovery of damages by claimant for violations of this section— Any person (as defined in section 1(a) of the Clayton Act (15 U.S.C. 12) whose business or property is injured as a result of the actions of an entity described in subsection (a) shall be entitled to recovery from the defendant for damages and other related costs under section 4 of such Act (15 U.S.C. 15).
(c)
Elements of prima facie case— A plaintiff may initiate a claim against a defendant in an appropriate Federal court for a violation of subsection (a) in order to recover damages under subsection (b) by—
(1)
establishing, by a preponderance of the evidence, that the defendant—
(A)
is a foreign state or an agency or instrumentality of a foreign state (as defined in section 1603 of title 28, United States Code); and
(B)
is not immune from the jurisdiction of the Federal court pursuant to section 1605(a)(2) of title 28, United States Code; and
(2)
setting forth sufficient evidence to establish a reasonable inference that the defendant has violated subsection (a).
(d)
Court determination leading to evidentiary burden shifting to defendant— If a Federal court finds that a plaintiff has met its burden of proof under subsection (c), the court may determine that—
(1)
the plaintiff has established a prima facie case that the conduct of the defendant is in violation of subsection (a); and
(2)
the defendant has the burden of rebutting such case by establishing that the defendant is not in violation of subsection (a).
(e)
Filing of amicus briefs by the Department of State regarding international comity—
(1)
In general— For the purposes of considering questions of international comity with respect to making decisions regarding commercial activity and the scope of applicable sovereign immunity, the Federal court may receive and consider relevant amicus briefs filed by the Secretary of State.
(2)
Savings provision— Nothing in paragraph (1) may be construed to limit the ability of the Federal court to receive and consider any other amicus briefs.

Sec. 206 Reporting on requests to comply with the corporate social credit system in the People’s Republic of China

(a)
Defined term— In this section, the term corporate social credit system, as established by the “Planning Outline for the Construction of a Social Credit System” released by the State Council of the Government of the People’s Republic of China in 2014, means a nationwide network of systems operated by private and state actors, that—
(1)
use existing financial credit systems, public records, online activity, government licenses and registrations, and other information to collect, aggregate, and integrate data regarding corporate entities that come within the jurisdiction of the PRC, including United States companies operating in the PRC;
(2)
use the data referred to in paragraph (1)—
(A)
to monitor a corporate entity’s activities; and
(B)
to evaluate and rate certain financial, social, religious, or political behaviors of the entity and its key personnel;
(3)
rates such corporate entities according to their trustworthiness (as defined by the CCP and the Government of the PRC); and
(4)
implements punishments and rewards based on such ratings that have a direct bearing on a corporate entity’s activities within the PRC.
(b)
Reporting requirement— The President, acting through the Secretary of Commerce, and in consultation with the Secretary of State and any other individuals the President determines should be consulted, shall issue regulations requiring United States entities with at least $100,000,000 of assets or other investment in the PRC to submit a semiannual report regarding the impact of the corporate social credit system on the ability of such United States companies to conduct business or otherwise operate in the PRC.
(c)
Matters To Be included— The regulations issued pursuant to subsection (b) shall require each entity described in such subsection to report information regarding—
(1)
the positive and negative impacts of the corporate social credit system on the ability of the entity to conduct business in the PRC;
(2)
major disruptions to the business operations of the entity that are directly linked to the corporate social credit system, including in hiring, making contracts, implementing partnerships with other entities, and other appropriate matters;
(3)
whether the entity has been placed on or removed from a blacklist, untrustworthy entities list, priority key watchlist, or a redlist within the corporate social credit system;
(4)
whether the Government of the PRC took any actions directed at the entity as a result of a list described in paragraph (3), including any specific punishments or rewards;
(5)
any instances in which an agent of the Government of the PRC has asked for the resignation of key leadership within the company due to their individual social credit scores;
(6)
any instances in which an entity within the Government of PRC at the national, local, or municipal level informed the entity that it will face a negative impact on its rating within the corporate social credit system unless the entity takes a certain course of action or refrains from taking a certain course of action;
(7)
any instances in which the entity was asked by an agent of the Government of the PRC to take an action to accommodate a political position of the CCP or the Government of the PRC for the purposes of complying with the corporate social credit system; and
(8)
any instances in which the entity was required to provide sensitive proprietary business information to comply with the corporate social credit system.
(d)
Consultation with the private sector— In developing the regulations required under subsection (b), the Secretary of Commerce, in consultation with the Secretary of State, shall consult with United States entities with significant business operations in the PRC.
(e)
Willful failure To report— Not later than 180 days after the issuance of regulations pursuant to subsection (b), any United States entity required to report under such subsection who knowingly and willfully fails to make such report may, in addition to other penalties provided by law, be fined not more than $25,000.

Sec. 207 Annual review on the presence of Chinese companies in United States capital markets

(a)
Appropriate congressional committees— In this section, the term appropriate congressional committees means—
(1)
the Committee on Foreign Relations of the Senate;
(2)
the Select Committee on Intelligence of the Senate;
(3)
the Committee on Banking, Housing, and Urban Affairs of the Senate;
(4)
the Committee on Foreign Affairs of the House of Representatives;
(5)
the Permanent Select Committee on Intelligence of the House of Representatives; and
(6)
the Committee on Financial Services of the House of Representatives.
(b)
Report—
(1)
In general— Not later than 180 days after the date of the enactment of this Act, and annually thereafter for the following 5 years, the Secretary of State, in consultation with the Director of National Intelligence and the Secretary of the Treasury, shall submit an unclassified report to the appropriate congressional committees that describes the risks posed to the United States by the presence in United States capital markets of companies incorporated in the PRC.
(2)
Matters to be included— The report required under paragraph (1) shall—
(A)
identify companies incorporated in the PRC that—
(i)
are listed or traded on one or several stock exchanges within the United States, including over-the-counter market and “A Shares” added to indexes and exchange-traded funds out of mainland exchanges in the PRC; and
(ii)
based on the factors for consideration described in paragraph (3), have knowingly and materially contributed to—
(I)
activities that undermine United States national security;
(II)
serious abuses of internationally recognized human rights; or
(III)
a substantially increased financial risk exposure for United States-based investors;
(B)
describe the activities of the companies identified pursuant to subparagraph (A), and their implications for the United States; and
(C)
develop policy recommendations for the United States Government, State governments, United States financial institutions, United States equity and debt exchanges, and other relevant stakeholders to address the risks posed by the presence in United States capital markets of the companies identified pursuant to subparagraph (A).
(3)
Factors for consideration— In completing the report under paragraph (1), the President shall consider whether a company identified pursuant to paragraph (2)(A)—
(A)
has materially contributed to the development or manufacture, or sold or facilitated procurement by the PLA, of lethal military equipment or component parts of such equipment;
(B)
has contributed to the construction and militarization of features in the South China Sea;
(C)
has been sanctioned by the United States or has been determined to have conducted business with sanctioned entities;
(D)
has engaged in an act or a series of acts of intellectual property theft;
(E)
has engaged in corporate or economic espionage;
(F)
has contributed to the proliferation of nuclear or missile technology in violation of United Nations Security Council resolutions or United States sanctions;
(G)
has contributed to the repression of religious and ethnic minorities within the PRC, including in Xinjiang Uyghur Autonomous Region or Tibet Autonomous Region;
(H)
has contributed to the development of technologies that enable censorship directed or directly supported by the Government of the PRC;
(I)
has failed to comply fully with Federal securities laws (including required audits by the Public Company Accounting Oversight Board) and “material risk” disclosure requirements of the Securities and Exchange Commission; or
(J)
has contributed to other activities or behavior determined to be relevant by the President.
(c)
Report form— The report required under subsection (b)(1) shall be submitted in unclassified form, but may include a classified annex.
(d)
Publication— The unclassified portion of the report under subsection (b)(1) shall be made accessible to the public online through relevant United States Government websites.