II 

116TH CONGRESS 

1ST SESSION S. 945 

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. 

IN THE SENATE OF THE UNITED STATES 

MARCH 28, 2019 

Mr. KENNEDY (for himself and Mr. VAN HOLLEN) introduced the following 

bill; which was read twice and referred to the Committee on Banking, 

Housing, and Urban Affairs 

A BILL 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Holding Foreign Com5 panies Accountable Act’’. 


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1 SEC. 2. DISCLOSURE REQUIREMENT. 

2 Section 104 of the Sarbanes-Oxley Act of 2002 (15 

3 U.S.C. 7214) is amended by adding at the end the fol4 lowing: 

5 ‘‘(i) DISCLOSURE REGARDING FOREIGN JURISDIC6 TIONS THAT PREVENT INSPECTIONS.— 

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

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

9 issuer that is required to file reports under sec10 tion 13 or 15(d) of the Securities Exchange Act 

11 of 1934 (15 U.S.C. 78m; 78o(d)); and 

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

13 with respect to a covered issuer, a year— 

14 ‘‘(i) during which the Commission 

15 identifies the covered issuer under para16 graph (2)(A) with respect to every report 

17 described in subparagraph (A) filed by the 

18 covered issuer during that year; and 

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

20 enactment of this subsection. 

21 ‘‘(2) DISCLOSURE TO COMMISSION.—The Com22 mission shall— 

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

24 respect to the preparation of the audit report 

25 on the financial statement of the covered issuer 

26 that is included in a report described in paraVerDate Sep 11 2014 21:58 Apr 04, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S945.IS S945

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1 graph (1)(A) filed by the covered issuer, retains 

2 a registered public accounting firm that has a 

3 branch or office that— 

4 ‘‘(i) is located in a foreign jurisdic5 tion; and 

6 ‘‘(ii) the Board is unable to inspect 

7 under this section; and 

8 ‘‘(B) require each covered issuer identified 

9 under subparagraph (A) to, in accordance with 

10 the rules issued by the Commission under para11 graph (4), submit to the Commission docu12 mentation that establishes that the covered 

13 issuer is not owned or controlled by a govern14 mental entity in the foreign jurisdiction de15 scribed in subparagraph (A)(i). 

16 ‘‘(3) TRADING PROHIBITION AFTER 3 YEARS OF

17 NON-INSPECTIONS.— 

18 ‘‘(A) IN GENERAL.—If the Commission de19 termines that a covered issuer has 3 consecutive 

20 non-inspection years, the Commission shall pro21 hibit the securities of the covered issuer from 

22 being traded on a national securities exchange. 

23 ‘‘(B) REMOVAL OF INITIAL PROHIBI24 TION.—If, after the Commission imposes a pro25 hibition on a covered issuer under subparaVerDate Sep 11 2014 21:58 Apr 04, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S945.IS S945

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1 graph (A), the covered issuer certifies to the 

2 Commission that the covered issuer has re3 tained a registered public accounting firm that 

4 the Board has inspected under this section to 

5 the satisfaction of the Commission, the Com6 mission shall end that prohibition. 

7 ‘‘(C) RECURRENCE OF NON-INSPECTION

8 YEARS.—If, after the Commission ends a prohi9 bition under subparagraph (B) or (D) with re10 spect to a covered issuer, the Commission deter11 mines that the covered issuer has a non-inspec12 tion year, the Commission shall prohibit the se13 curities of the covered issuer from being traded 

14 on a national securities exchange. 

15 ‘‘(D) REMOVAL OF SUBSEQUENT PROHIBI16 TION.—If, after the end of the 5-year period be17 ginning on the date on which the Commission 

18 imposes a prohibition on a covered issuer under 

19 subparagraph (C), the covered issuer certifies to 

20 the Commission that the covered issuer will re21 tain a registered public accounting firm that 

22 the Board is able to inspect under this section, 

23 the Commission shall end that prohibition. 

24 ‘‘(4) RULES.—Not later than 90 days after the 

25 date of enactment of this subsection, the CommisVerDate Sep 11 2014 21:58 Apr 04, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S945.IS S945

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1 sion shall issue rules that establish the manner and 

2 form in which a covered issuer shall make a disclo3 sure and a submission required under clauses (i) and 

4 (ii) of paragraph (2)(B), respectively.’’. 

Æ 


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