S. 945 

One Hundred Sixteenth Congress 

of the 

United States of America 

AT THE SECOND SESSION 

Begun and held at the City of Washington on Friday, 

the third day of January, two thousand and twenty 

An Act 

To amend the Sarbanes-Oxley Act of 2002 to require certain issuers to disclose 

to the Securities and Exchange Commission information regarding foreign jurisdictions that prevent the Public Company Accounting Oversight Board from performing inspections under that Act, and for other purposes. 

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Holding Foreign Companies 

Accountable Act’’. 

SEC. 2. DISCLOSURE REQUIREMENT. 

Section 104 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7214) 

is amended by adding at the end the following: 

‘‘(i) DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.— 

‘‘(1) DEFINITIONS.—In this subsection— 

‘‘(A) the term ‘covered issuer’ means an issuer that 

is required to file reports under section 13 or 15(d) of 

the Securities Exchange Act of 1934 (15 U.S.C. 78m, 

78o(d)); and 

‘‘(B) the term ‘non-inspection year’ means, with respect 

to a covered issuer, a year— 

‘‘(i) during which the Commission identifies the 

covered issuer under paragraph (2)(A) with respect 

to every report described in subparagraph (A) filed 

by the covered issuer during that year; and 

‘‘(ii) that begins after the date of enactment of 

this subsection. 

‘‘(2) DISCLOSURE TO COMMISSION.—The Commission shall— 

‘‘(A) identify each covered issuer that, with respect 

to the preparation of the audit report on the financial 

statement of the covered issuer that is included in a report 

described in paragraph (1)(A) filed by the covered issuer, 

retains a registered public accounting firm that has a 

branch or office that— 

‘‘(i) is located in a foreign jurisdiction; and 

‘‘(ii) the Board is unable to inspect or investigate 

completely because of a position taken by an authority 

in the foreign jurisdiction described in clause (i), as 

determined by the Board; and 

‘‘(B) require each covered issuer identified under 

subparagraph (A) to, in accordance with the rules issued 

by the Commission under paragraph (4), submit to the 
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Commission documentation that establishes that the covered issuer is not owned or controlled by a governmental 

entity in the foreign jurisdiction described in subparagraph 

(A)(i). 

‘‘(3) TRADING PROHIBITION AFTER 3 YEARS OF NON-INSPECTIONS.— 

‘‘(A) IN GENERAL.—If the Commission determines that 

a covered issuer has 3 consecutive non-inspection years, 

the Commission shall prohibit the securities of the covered 

issuer from being traded— 

‘‘(i) on a national securities exchange; or 

‘‘(ii) through any other method that is within the 

jurisdiction of the Commission to regulate, including 

through the method of trading that is commonly 

referred to as the ‘over-the-counter’ trading of securities. 

‘‘(B) REMOVAL OF INITIAL PROHIBITION.—If, after the 

Commission imposes a prohibition on a covered issuer 

under subparagraph (A), the covered issuer certifies to 

the Commission that the covered issuer has retained a 

registered public accounting firm that the Board has 

inspected under this section to the satisfaction of the 

Commission, the Commission shall end that prohibition. 

‘‘(C) RECURRENCE OF NON-INSPECTION YEARS.—If, after 

the Commission ends a prohibition under subparagraph 

(B) or (D) with respect to a covered issuer, the Commission 

determines that the covered issuer has a non-inspection 

year, the Commission shall prohibit the securities of the 

covered issuer from being traded— 

‘‘(i) on a national securities exchange; or 

‘‘(ii) through any other method that is within the 

jurisdiction of the Commission to regulate, including 

through the method of trading that is commonly 

referred to as the ‘over-the-counter’ trading of securities. 

‘‘(D) REMOVAL OF SUBSEQUENT PROHIBITION.—If, after 

the end of the 5-year period beginning on the date on 

which the Commission imposes a prohibition on a covered 

issuer under subparagraph (C), the covered issuer certifies 

to the Commission that the covered issuer will retain a 

registered public accounting firm that the Board is able 

to inspect under this section, the Commission shall end 

that prohibition. 

‘‘(4) RULES.—Not later than 90 days after the date of enactment of this subsection, the Commission shall issue rules that 

establish the manner and form in which a covered issuer shall 

make a submission required under paragraph (2)(B).’’. 

SEC. 3. ADDITIONAL DISCLOSURE. 

(a) DEFINITIONS.—In this section— 

(1) the term ‘‘audit report’’ has the meaning given the 

term in section 2(a) of the Sarbanes-Oxley Act of 2002 (15 

U.S.C. 7201(a)); 

(2) the term ‘‘Commission’’ means the Securities and 

Exchange Commission; 

(3) the term ‘‘covered form’’— 

(A) means— 
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(i) the form described in section 249.310 of title 

17, Code of Federal Regulations, or any successor regulation; and 

(ii) the form described in section 249.220f of title 

17, Code of Federal Regulations, or any successor regulation; and 

(B) includes a form that— 

(i) is the equivalent of, or substantially similar 

to, the form described in clause (i) or (ii) of subparagraph (A); and 

(ii) a foreign issuer files with the Commission 

under the Securities Exchange Act of 1934 (15 U.S.C. 

78a et seq.) or rules issued under that Act; 

(4) the terms ‘‘covered issuer’’ and ‘‘non-inspection year’’ 

have the meanings given the terms in subsection (i)(1) of section 

104 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7214), as 

added by section 2 of this Act; and 

(5) the term ‘‘foreign issuer’’ has the meaning given the 

term in section 240.3b–4 of title 17, Code of Federal Regulations, or any successor regulation. 

(b) REQUIREMENT.—Each covered issuer that is a foreign issuer 

and for which, during a non-inspection year with respect to the 

covered issuer, a registered public accounting firm described in 

subsection (i)(2)(A) of section 104 of the Sarbanes-Oxley Act of 

2002 (15 U.S.C. 7214), as added by section 2 of this Act, has 

prepared an audit report shall disclose in each covered form filed 

by that issuer that covers such a non-inspection year— 

(1) that, during the period covered by the covered form, 

such a registered public accounting firm has prepared an audit 

report for the issuer; 

(2) the percentage of the shares of the issuer owned by 

governmental entities in the foreign jurisdiction in which the 

issuer is incorporated or otherwise organized; 

(3) whether governmental entities in the applicable foreign 

jurisdiction with respect to that registered public accounting 

firm have a controlling financial interest with respect to the 

issuer; 

(4) the name of each official of the Chinese Communist 

Party who is a member of the board of directors of— 

(A) the issuer; or 

(B) the operating entity with respect to the issuer; 

and 

(5) whether the articles of incorporation of the issuer (or 

equivalent organizing document) contains any charter of the 
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Chinese Communist Party, including the text of any such 

charter. 

Speaker of the House of Representatives. 

Vice President of the United States and

President of the Senate.