116TH CONGRESS 

2D SESSION S. 945 

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. 
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†S 945 ES

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’’. 

6 SEC. 2. DISCLOSURE REQUIREMENT. 

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

8 U.S.C. 7214) is amended by adding at the end the fol9 lowing: 

10 ‘‘(i) DISCLOSURE REGARDING FOREIGN JURISDIC11 TIONS THAT PREVENT INSPECTIONS.— 

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

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

14 issuer that is required to file reports under sec15 tion 13 or 15(d) of the Securities Exchange Act 

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

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

18 with respect to a covered issuer, a year— 

19 ‘‘(i) during which the Commission 

20 identifies the covered issuer under para21 graph (2)(A) with respect to every report 

22 described in subparagraph (A) filed by the 

23 covered issuer during that year; and 

24 ‘‘(ii) that begins after the date of en25 actment of this subsection. 
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1 ‘‘(2) DISCLOSURE TO COMMISSION.—The Com2 mission shall— 

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

4 respect to the preparation of the audit report 

5 on the financial statement of the covered issuer 

6 that is included in a report described in para7 graph (1)(A) filed by the covered issuer, retains 

8 a registered public accounting firm that has a 

9 branch or office that— 

10 ‘‘(i) is located in a foreign jurisdic11 tion; and 

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

13 investigate completely because of a position 

14 taken by an authority in the foreign juris15 diction described in clause (i), as deter16 mined by the Board; and 

17 ‘‘(B) require each covered issuer identified 

18 under subparagraph (A) to, in accordance with 

19 the rules issued by the Commission under para20 graph (4), submit to the Commission docu21 mentation that establishes that the covered 

22 issuer is not owned or controlled by a govern23 mental entity in the foreign jurisdiction de24 scribed in subparagraph (A)(i). 
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1 ‘‘(3) TRADING PROHIBITION AFTER 3 YEARS OF

2 NON-INSPECTIONS.— 

3 ‘‘(A) IN GENERAL.—If the Commission de4 termines that a covered issuer has 3 consecutive 

5 non-inspection years, the Commission shall pro6 hibit the securities of the covered issuer from 

7 being traded— 

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

9 or 

10 ‘‘(ii) through any other method that is 

11 within the jurisdiction of the Commission 

12 to regulate, including through the method 

13 of trading that is commonly referred to as 

14 the ‘over-the-counter’ trading of securities. 

15 ‘‘(B) REMOVAL OF INITIAL PROHIBI16 TION.—If, after the Commission imposes a pro17 hibition on a covered issuer under subpara18 graph (A), the covered issuer certifies to the 

19 Commission that the covered issuer has re20 tained a registered public accounting firm that 

21 the Board has inspected under this section to 

22 the satisfaction of the Commission, the Com23 mission shall end that prohibition. 

24 ‘‘(C) RECURRENCE OF NON-INSPECTION

25 YEARS.—If, after the Commission ends a prohi-
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1 bition under subparagraph (B) or (D) with re2 spect to a covered issuer, the Commission deter3 mines that the covered issuer has a non-inspec4 tion year, the Commission shall prohibit the se5 curities of the covered issuer from being trad6 ed— 

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

8 or 

9 ‘‘(ii) through any other method that is 

10 within the jurisdiction of the Commission 

11 to regulate, including through the method 

12 of trading that is commonly referred to as 

13 the ‘over-the-counter’ trading of securities. 

14 ‘‘(D) REMOVAL OF SUBSEQUENT PROHIBI15 TION.—If, after the end of the 5-year period be16 ginning on the date on which the Commission 

17 imposes a prohibition on a covered issuer under 

18 subparagraph (C), the covered issuer certifies to 

19 the Commission that the covered issuer will re20 tain a registered public accounting firm that 

21 the Board is able to inspect under this section, 

22 the Commission shall end that prohibition. 

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

24 date of enactment of this subsection, the Commis25 sion shall issue rules that establish the manner and 
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1 form in which a covered issuer shall make a submis2 sion required under paragraph (2)(B).’’. 

3 SEC. 3. ADDITIONAL DISCLOSURE. 

4 (a) DEFINITIONS.—In this section— 

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

6 given the term in section 2(a) of the Sarbanes-Oxley 

7 Act of 2002 (15 U.S.C. 7201(a)); 

8 (2) the term ‘‘Commission’’ means the Securi9 ties and Exchange Commission; 

10 (3) the term ‘‘covered form’’— 

11 (A) means— 

12 (i) the form described in section 

13 249.310 of title 17, Code of Federal Regu14 lations, or any successor regulation; and 

15 (ii) the form described in section 

16 249.220f of title 17, Code of Federal Reg17 ulations, or any successor regulation; and 

18 (B) includes a form that— 

19 (i) is the equivalent of, or substan20 tially similar to, the form described in 

21 clause (i) or (ii) of subparagraph (A); and 

22 (ii) a foreign issuer files with the 

23 Commission under the Securities Exchange 

24 Act of 1934 (15 U.S.C. 78a et seq.) or 

25 rules issued under that Act; 
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1 (4) the terms ‘‘covered issuer’’ and ‘‘non-inspec2 tion year’’ have the meanings given the terms in 

3 subsection (i)(1) of section 104 of the Sarbanes4 Oxley Act of 2002 (15 U.S.C. 7214), as added by 

5 section 2 of this Act; and 

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

7 given the term in section 240.3b–4 of title 17, Code 

8 of Federal Regulations, or any successor regulation. 

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

10 foreign issuer and for which, during a non-inspection year 

11 with respect to the covered issuer, a registered public ac12 counting firm described in subsection (i)(2)(A) of section 

13 104 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7214), 

14 as added by section 2 of this Act, has prepared an audit 

15 report shall disclose in each covered form filed by that 

16 issuer that covers such a non-inspection year— 

17 (1) that, during the period covered by the cov18 ered form, such a registered public accounting firm 

19 has prepared an audit report for the issuer; 

20 (2) the percentage of the shares of the issuer 

21 owned by governmental entities in the foreign juris22 diction in which the issuer is incorporated or other23 wise organized; 

24 (3) whether governmental entities in the appli25 cable foreign jurisdiction with respect to that reg-
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1 istered public accounting firm have a controlling fi2 nancial interest with respect to the issuer; 

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

4 Communist Party who is a member of the board of 

5 directors of— 

6 (A) the issuer; or 

7 (B) the operating entity with respect to the 

8 issuer; and 

9 (5) whether the articles of incorporation of the 

10 issuer (or equivalent organizing document) contains 

11 any charter of the Chinese Communist Party, in12 cluding the text of any such charter. 

Passed the Senate May 20, 2020. 

Attest: 

Secretary. 

116TH CONGRESS 

2D SESSION S. 945 

AN ACT 

To amend the Sarbanes-Oxley Act of 2002 to repurposes. forming inspections under that Act, and for other Company Accounting Oversight Board from per- foreign jurisdictions that prevent the Public and Exchange Commission information regarding quire certain issuers to disclose to the Securities