I

106TH CONGRESS

2D SESSION H. R. 4836

To provide for the application of certain measures to the People’s Republic

of China in response to the illegal sale, transfer, or misuse of certain

controlled goods, services, or technology, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JULY 12, 2000

Mr. PALLONE introduced the following bill; which was referred to the Committee on International Relations, and in addition to the Committee on

Rules, for a period to be subsequently determined by the Speaker, in each

case for consideration of such provisions as fall within the jurisdiction of

the committee concerned

A BILL

To provide for the application of certain measures to the

People’s Republic of China in response to the illegal

sale, transfer, or misuse of certain controlled goods, services, or technology, 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 ‘‘China Nonproliferation

5 Act’’.

6 SEC. 2. DEFINITIONS.

7 In this Act:
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1 (1) ADVANCED CONVENTIONAL WEAPONS.—The

2 term ‘‘advanced conventional weapons’’ includes—

3 (A) long-range precision-guided munitions,

4 fuel air explosives, cruise missiles, low observ5 ability aircraft or vessels, other radar evading

6 aircraft or vessels, advanced military aircraft,

7 military satellites, electromagnetic weapons, and

8 laser weapons;

9 (B) advanced command, control, and com10 munications systems, electronic warfare sys11 tems, and intelligence collection systems; and

12 (C) such other items or systems as the

13 President may, by regulation, determine nec14 essary for purposes of this title.

15 (2) GOODS AND TECHNOLOGY.—The terms

16 ‘‘goods’’ and ‘‘technology’’ mean—

17 (A) any article, natural or manmade sub18 stance, material, supply, or manufactured prod19 uct, including inspection and test equipment;

20 and

21 (B) any information and know-how (wheth22 er in tangible form, such as models, prototypes,

23 drawings, sketches, diagrams, blueprints, or

24 manuals, or in intangible form, such as training

25 or technical services) that can be used to de-
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1 sign, produce, manufacture, utilize, improve the

2 performance of or reconstruct goods, including

3 computer software and technical data.

4 (3) PERSON.—The term ‘‘person’’ means—

5 (A) any United States or People’s Republic

6 of China individual, partnership, corporation, or

7 other form of association, or any of their suc8 cessor entities, parents, or subsidiaries;

9 (B) any other nongovernmental entity, or10 ganization, or group, that is organized under

11 the laws of the United States or the People’s

12 Republic of China or has its principal place of

13 business in the United States or the People’s

14 Republic of China;

15 (C) any governmental entity of the Peo16 ple’s Republic of China operating as a business

17 enterprise; and

18 (D) any successor, subunit, or subsidiary

19 of any entity described in subparagraphs (A)

20 through (C).

21 (4) PROLIFERATION ACTIVITY.—The term

22 ‘‘proliferation activity’’ means the activity described

23 in section 3(a)(1).

24 (5) STATE-OWNED ENTERPRISE OF THE PEO25 PLE’S REPUBLIC OF CHINA.—
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1 (A) IN GENERAL.—The term ‘‘state-owned

2 enterprise of the People’s Republic of China’’

3 means a person who is affiliated with or wholly

4 owned, controlled, or subsidized by the Govern5 ment of the People’s Republic of China or the

6 People’s Liberation Army and whose means of

7 production, products, and revenues are owned

8 or controlled by a central or provincial govern9 ment authority. A person shall be considered to

10 be state-owned if—

11 (i) the person’s assets are primarily

12 owned by a central or provincial govern13 ment authority;

14 (ii) a substantial proportion of the

15 person’s profits are required to be sub16 mitted to a central or provincial govern17 ment authority;

18 (iii) the person’s production, pur19 chases of inputs, and sales of output, in

20 whole or in part, are subject to state, sec21 toral, or regional plans; or

22 (iv) a license issued by a government

23 authority classifies the person as state24 owned.

25 (B) EXCEPTION.—Any person that—
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1 (i) is a qualified foreign joint venture

2 or is licensed by a governmental authority

3 as a collective, cooperative, or private en4 terprise; or

5 (ii) is wholly owned by a foreign per6 son,

7 shall not be considered to be state-owned.

8 (C) QUALIFIED FOREIGN JOINT VEN9 TURE.—The term ‘‘qualified foreign joint ven10 ture’’ means any person—

11 (i) which is registered and licensed in

12 the agency or department of the Govern13 ment of the People’s Republic of China

14 concerned with foreign economic relations

15 and trade as an equity, cooperative, con16 tractual joint venture, or joint stock com17 pany with foreign investment;

18 (ii) in which the foreign investor part19 ner and a person of the People’s Republic

20 of China share profits and losses and joint21 ly manage the venture;

22 (iii) in which the foreign investor

23 partner holds or controls at least 25 per24 cent of the investment and the foreign in25 vestor partner is not substantially owned
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1 or controlled by a state-owned enterprise of

2 the People’s Republic of China;

3 (iv) in which the foreign investor part4 ner is not a person of a country the gov5 ernment of which the Secretary of State

6 has determined under section 6(j) of the

7 Export Administration Act of 1979 (50

8 U.S.C. App. 2405(j)) to have repeatedly

9 provided support for acts of international

10 terrorism; and

11 (v) which does not use state-owned

12 enterprises of the People’s Republic of

13 China to export its goods or services.

14 (6) UNITED STATES ASSISTANCE.—The term

15 ‘‘United States assistance’’ means—

16 (A) any assistance under the Foreign As17 sistance Act of 1961, other than urgent human18 itarian assistance or medicine;

19 (B) sales and assistance under the Arms

20 Export Control Act;

21 (C) financing by the Commodity Credit

22 Corporation for export sales of agricultural

23 commodities; and

24 (D) financing under the Export-Import

25 Bank Act.
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1 SEC. 3. REPORTS ON PROLIFERATION BY PEOPLE’S REPUB2 LIC OF CHINA.

3 (a) REPORTS.—

4 (1) IN GENERAL.—The President shall, at the

5 times specified in subsection (b), submit to the Com6 mittee on International Relations of the House of

7 Representatives, the Committee on Foreign Rela8 tions of the Senate, the Committee on Armed Serv9 ices of the Senate, the Select Committee on Intel10 ligence of the Senate, and the Committee on Govern11 mental Affairs of the Senate, a report identifying

12 every person with respect to whom there is credible

13 information indicating that that person, on or after

14 January 1, 2000, transferred, retransferred, sold,

15 misused, or diverted from, or within, the People’s

16 Republic of China to a foreign person or national of

17 the People’s Republic of China involved in the devel18 opment or acquisition of nuclear, chemical, or bio19 logical weapons or ballistic or cruise missiles—

20 (A) goods, services, or technology listed

21 on—

22 (i) the Nuclear Suppliers Group

23 Guidelines for the Export of Nuclear Mate24 rial, Equipment and Technology (published

25 by the International Atomic Energy Agen26 cy as Information Circular INFCIRC/254/
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1 Rev. 3/Part 1, and subsequent revisions)

2 and Guidelines for Transfers of Nuclear3 Related Dual-Use Equipment, Material,

4 and Related Technology (published by the

5 International Atomic Energy Agency as In6 formation Circular INFCIRC/254/Rev. 3/

7 Part 2, and subsequent revisions);

8 (ii) the Missile Technology Control

9 Regime Equipment and Technology Annex

10 of June 11, 1996, and subsequent revi11 sions;

12 (iii) the lists of items and substances

13 relating to biological and chemical weapons

14 the export of which is controlled by the

15 Australia Group;

16 (iv) the Schedules of the Convention

17 on the Prohibition of the Development,

18 Production, Stockpiling and Use of Chem19 ical Weapons and on Their Destruction, in20 cluding chemicals, precursors, and other

21 substances; or

22 (v) the Wassenaar Arrangement list of

23 Dual Use Goods and Technologies and

24 Munitions list of July 12, 1996, and subse25 quent revisions; or
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1 (B) goods, services, or technology not list2 ed on any list identified in subparagraph (A)

3 but which nevertheless would be, if the goods,

4 services, or technology were United States

5 goods, services, or technology, prohibited or

6 controlled for export to the People’s Republic of

7 China, or any tier IV countries as defined by

8 the Bureau of Export Administration of the De9 partment of Commerce, and that have the po10 tential to make a contribution to the develop11 ment, improvement, or production of nuclear,

12 biological, or chemical weapons, or of ballistic

13 or cruise missile systems, or advanced conven14 tional weapons or munitions.

15 (2) ACTION BY PERSONS IDENTIFIED.—The

16 President shall include in the report information on

17 any action taken by a person identified in a prior

18 annual report under this subsection that establishes

19 that the person has discontinued, rectified, or miti20 gated a prior proliferation activity identified under

21 this Act.

22 (3) ACTION BY PRESIDENT.—The President

23 shall include in the report information on actions

24 taken by the President under sections 4 and 5, in

25 response to proliferation activities conducted by per-
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1 sons identified in this section. The President shall

2 include in the report information on any determina3 tions made under section 7. If the President fails to

4 exercise the authority under sections 4 and 5, or if

5 the President makes a determination under section

6 7, with respect to a person identified in a report

7 submitted pursuant to this section, the President

8 shall include that information and the reasons there9 fore in the report required under this section.

10 (4) OTHER INFORMATION.—In addition to the

11 information required by paragraphs (1) through (3),

12 the President shall include in the report information

13 on—

14 (A) noncompliance with any international

15 nonproliferation treaties, agreements, arrange16 ments, or commitments (verbal, written, or oth17 erwise) by the People’s Republic of China, in18 cluding the Missile Technology Control Regime

19 and the annexes to that Regime;

20 (B) noncompliance with United States ex21 port control laws, Executive orders, regulations,

22 or export license conditions by the People’s Re23 public of China;

24 (C) the performance of the Department of

25 Commerce in licensing, regulating, and control-
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1 ling the export of dual-use technology to the

2 People’s Republic of China, including the num3 ber and type of post-shipment verifications con4 ducted and enforcement actions taken;

5 (D) the threats to the security interests of

6 the United States, or the security interests of

7 its allies resulting from—

8 (i) proliferation activities on the part

9 of the People’s Republic of China or per10 sons identified in reports submitted under

11 this section;

12 (ii) the transfer or sale to the Govern13 ment of, or persons within the People’s Re14 public of China of dual-use technologies

15 and goods listed on the Commerce Control

16 List;

17 (iii) the misuse or diversion by the

18 People’s Republic of China of dual-use

19 technology; and

20 (iv) the transfer or sale of goods, serv21 ices, or technology identified by the Direc22 tor of Central Intelligence as having a sig23 nificant potential to make a contribution to

24 the development, improvement, or produc25 tion of nuclear, biological, or chemical
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1 weapons, or of ballistic or cruise missile

2 systems, or advanced conventional weapons

3 or munitions; and

4 (E) transfers to persons of the People’s

5 Republic of China of technology under arms

6 control and nonproliferation agreements and

7 opportunities for the People’s Republic of China

8 to engage in proliferation activities under agree9 ments such as Nuclear Nonproliferation Treaty,

10 Chemical Weapons Convention, Comprehensive

11 Test Ban Treaty, and Biological Weapons Con12 vention.

13 (b) TIMING OF REPORTS.—The reports required

14 under subsection (a) shall be submitted no later than 90

15 days after the date of enactment of this Act, and on June

16 1 of each year thereafter.

17 (c) EXCEPTIONS.—Any person who—

18 (1) has engaged in the transfer, sale, or misuse

19 of any goods, services, or technology on behalf of, or

20 in concert with, the Government of the United

21 States; or

22 (2) has transferred, retransferred, or sold such

23 goods, services, or technology in a manner fully con24 sistent with all applicable international nonprolifera25 tion treaties, agreements, and commitments with re-
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1 spect to which the People’s Republic of China is a

2 party,

3 is not required to be identified on account of that transfer

4 in any report submitted under this section, except to the

5 degree that credible information indicates that the par6 ticular transfer, sale, or misuse may have continued, or

7 been larger, more significant, or different in nature than

8 permitted on behalf of the Government of the United

9 States or under such international nonproliferation treaty

10 or agreement.

11 (d) SUBMISSION IN CLASSIFIED FORM.—Reports

12 shall be submitted in unclassified form, with classified an13 nexes as necessary.

14 SEC. 4. APPLICATION OF MANDATORY MEASURES TO CER15 TAIN PERSONS.

16 (a) APPLICATION OF MEASURES.—Subject to section

17 7, the President shall apply with respect to each person

18 identified in a report submitted pursuant to section 3(a),

19 for such period of time as the President may determine

20 but not less than one year, all of the measures described

21 in subsection (b).

22 (b) DESCRIPTION OF MEASURES.—The measures re23 ferred to in subsection (a) are the following:

24 (1) EXECUTIVE ORDER NO. 12938 PROHIBI25 TIONS.—Imposition of the measures set forth in sub-
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1 sections (b) and (c) of section 4 of Executive Order

2 No. 12938.

3 (2) ARMS EXPORT.—Prohibition on United

4 States Government transfers or sales to such person

5 of any item on the United States Munitions List as

6 in effect on August 8, 1995, and termination of all

7 sales and after-sale servicing to such person of any

8 defense articles, defense services, or design and con9 struction services under the Arms Export Control

10 Act.

11 (3) DUAL-USE EXPORT PROHIBITION.—Denial

12 of licenses, suspension of existing licenses, and ter13 mination of all transfers or sales and after-sale serv14 icing for the transfer to such person of any item the

15 export of which is controlled under the Export Ad16 ministration Act of 1979 (as extended pursuant to

17 the International Emergency Economic Powers Act)

18 or the Export Administration regulations.

19 (4) PROCUREMENT SANCTION.—Prohibition on

20 the United States Government procuring, or enter21 ing into any contract for the procurement of, any

22 goods or services from such person.

23 (5) UNITED STATES ASSISTANCE PROHIBI24 TION.—Prohibition on the provision of United States
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1 assistance in the form of grants, loans, credits, guar2 antees, or otherwise, to such person.

3 (6) SUSPENSION OF AGREEMENTS.—Immediate

4 suspension of any agreements or efforts for the co5 development or co-production with such person of

6 any item on the United States Munitions List.

7 (c) EFFECTIVE DATE OF MEASURES.—Each meas8 ure imposed pursuant to subsection (a) shall take effect

9 with respect to such person 30 days after the date that

10 the report identifying the person is submitted to Congress.

11 (d) PUBLICATION IN FEDERAL REGISTER.—Notice

12 of the imposition of the measure described in subsection

13 (b) to a person identified pursuant to section 3(a) shall

14 be published in the Federal Register, unless the President

15 determines that doing so would threaten the national secu16 rity or intelligence interests of the United States.

17 (e) DURATION OF MEASURES.—Each measure im18 posed under this section shall apply for a period of at least

19 12 months following the imposition of the measure and

20 shall cease to apply only if the President determines and

21 certifies to Congress that—

22 (1) credible information indicates that the per23 son with respect to whom the determination was

24 made under section 3(a) has ceased the activities for

25 which the measure was imposed;
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1 (2) credible information indicates that the per2 son has taken reasonable steps to rectify the viola3 tion; and

4 (3) the President has received reasonable assur5 ances from the person that such person will not en6 gage in similar activities in the future.

7 SEC. 5. APPLICATION OF ADDITIONAL MEASURES DI8 RECTED AT THE GOVERNMENT OF THE PEO9 PLE’S REPUBLIC OF CHINA.

10 (a) IN GENERAL.—In addition to the mandatory

11 measures described in section 4 applied against persons

12 identified pursuant to section 3(a), the President shall

13 apply additional measures as follows against the People’s

14 Republic of China:

15 (1) TIER 1 MEASURES.—The President shall

16 apply one or more of the measures listed in tier 1

17 that are not in effect under this or any other Act

18 or Executive order with respect to the People’s Re19 public of China in conjunction with, and at the same

20 time, as the mandatory measures applied against the

21 person under section 4.

22 (2) TIER 2 MEASURES.—If, one year after the

23 measures described in section 4 are imposed, the

24 proliferation activities upon which the measures were

25 based are not rectified as described in section 4(e),
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1 or the person has engaged in additional proliferation

2 activities, the President shall continue to apply the

3 measures described in section 4, any tier 1 measure

4 in effect, and shall also impose one or more tier 2

5 measures not in effect under this or any other Act

6 or Executive order with respect to the People’s Re7 public of China.

8 (3) TIER 3 MEASURES.—If 2 years after the

9 measures described in section 4 are imposed, the

10 proliferation activities upon which the measures were

11 based are not rectified as described in section 4(e),

12 or the person has engaged in additional proliferation

13 activities, the President shall continue to apply the

14 measures described in section 4, any tier 1 or tier

15 2 measures in effect, and shall also impose one or

16 more tier 3 measures not in effect under this or any

17 other Act or Executive order with respect to the

18 People’s Republic of China.

19 (b) DEFINITION OF TIER 1, TIER 2, AND TIER 3

20 MEASURES.—

21 (1) TIER 1 MEASURE.—The term ‘‘tier 1 meas22 ure’’ includes any or all of the following:

23 (A) Suspension of all military-to-military

24 contacts and exchanges between the People’s

25 Republic of China and the United States.
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1 (B) Suspension of all United States assist2 ance to the People’s Republic of China by the

3 United States Government.

4 (C) Prohibition on United States bank

5 loans or bond offerings in United States mar6 kets on the part of any national of the People’s

7 Republic of China or any state-owned enterprise

8 of the People’s Republic of China.

9 (D) Prohibition on the transfer or sale or

10 after-sale servicing, including the provision of

11 replacement parts, to the People’s Republic of

12 China or any national of the People’s Republic

13 of China of any item on the United States Mu14 nitions List and suspension of any agreement

15 with the People’s Republic of China or any na16 tional of the People’s Republic of China or any

17 state-owned enterprise of the People’s Republic

18 of China for the co-development or co-produc19 tion of any item on the United States Muni20 tions List.

21 (2) TIER 2 MEASURE.—The term ‘‘tier 2 meas22 ure’’ includes any or all of the following:

23 (A) Suspension of all scientific, academic,

24 and technical exchanges between the People’s

25 Republic of China and the United States.
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1 (B) Direction of the Export-Import Bank

2 of the United States not to approve the

3 issuance of any guarantees, insurance, exten4 sion of credit, or participation in the extension

5 of credit to the People’s Republic of China.

6 (C) Denial of access to the capital markets

7 of the United States by all state-owned enter8 prises of the People’s Republic of China.

9 (D) Prohibition on the transfer or sale to

10 the People’s Republic of China or any national

11 of the People’s Republic of China of any item

12 on the Commerce Control List that is controlled

13 for national security purposes and prohibition

14 of after-sale servicing, including the provision of

15 replacement parts for such items.

16 (3) TIER 3 MEASURE.—The term ‘‘tier 3 meas17 ure’’ includes any or all of the following:

18 (A) Prohibition on procurement by the

19 United States Government or entering into any

20 contract for the procurement of, any goods or

21 services from the People’s Republic of China or

22 any national of the People’s Republic of China.

23 (B) Designation of the People’s Republic

24 of China in a country tier under the Export Ad-
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1 ministration Regulations that is higher than the

2 country tier in effect.

3 (C) Denial of access to the capital markets

4 of the United States by any company owned or

5 controlled by nationals of the People’s Republic

6 of China.

7 (D) Prohibition on the transfer or sale to

8 the People’s Republic of China or any national

9 of the People’s Republic of China of any item

10 on the Commerce Control List and prohibition

11 of after-sale servicing, including replacement

12 parts for such items.

13 SEC. 6. PROCEDURES FOR CONGRESSIONAL REVIEW.

14 (a) WRITTEN JUSTIFICATION.—Any notification sub15 mitted by the President under section 3 indicating that

16 the President is not imposing a measure or exercising au17 thority under section 4 or 5 or that the President is mak18 ing a determination under section 7 shall include a written

19 justification describing in detail the facts and cir20 cumstances relating specifically to the person identified in

21 a report submitted pursuant to section 3(a) that supports

22 the President’s decision not to exercise the authority of

23 section 4 or section 5 or the President’s decision to make

24 a determination under section 7 with respect to that per25 son.
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1 (b) CONGRESSIONAL ACTION.—If Congress receives

2 a notification described in section 3 and does not agree

3 with the justification described in subsection (a), the ap4 propriate measure shall be imposed with respect to the

5 person identified in the notification if a joint resolution

6 described in this section is enacted into law.

7 (c) JOINT RESOLUTION.—

8 (1) DEFINITION.—For purposes of this section,

9 a joint resolution means a resolution introduced by

10 any Member of Congress after the date the notifica11 tion described in section 3 is received, the resolving

12 clause of which contains only the following: ‘‘That

13 Congress does not agree with the justification con14 tained in the notification submitted by the President

15 pursuant to the China Nonproliferation Act on

16 lllllll and that the President shall exer17 cise the mandatory measures under section 4 of the

18 Act and one or all of the tier ll measures under

19 that Act.’’; with the first blank space being filled

20 with the appropriate date and the second blank

21 space being filled with the appropriate tier.

22 (2) REFERRAL TO COMMITTEE.—

23 (A) SENATE.—A joint resolution intro24 duced in the Senate shall be referred to the

25 Committee on Foreign Relations of the Senate.
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1 (B) HOUSE OF REPRESENTATIVES.—A

2 joint resolution introduced in the House of Rep3 resentatives shall be referred to the Committee

4 on International Relations of the House of Rep5 resentatives.

6 (C) REPORTING.—A joint resolution may

7 not be reported before the 8th day after the

8 date on which the joint resolution is introduced.

9 (3) DISCHARGE OF COMMITTEE.—If the com10 mittee to which a joint resolution is referred in ei11 ther House has not reported the joint resolution (or

12 an identical joint resolution) at the end of 15 cal13 endar days during which that House is in session

14 after the date on which the joint resolution is

15 introduced—

16 (A) the committee shall be deemed to be

17 discharged from further consideration of the

18 joint resolution; and

19 (B) the joint resolution shall be placed on

20 the appropriate calendar of that House.

21 (4) FLOOR CONSIDERATION.—

22 (A) IN GENERAL.—

23 (i) MOTION TO PROCEED TO CONSID24 ERATION.—When the committee to which a

25 joint resolution is referred in either House
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1 has reported, or has been deemed to be

2 discharged (under paragraph (3)) from

3 further consideration of, a joint

4 resolution—

5 (I) it is at any time thereafter in

6 order (even though a previous motion

7 to the same effect has been disagreed

8 to) for any Member of that House to

9 move to proceed to the consideration

10 of the joint resolution; and

11 (II) all points of order against

12 the joint resolution (and against con13 sideration of the joint resolution) are

14 waived.

15 (ii) TREATMENT OF MOTION.—A mo16 tion under clause (i)—

17 (I) is privileged in the Senate

18 and is highly privileged in the House

19 of Representatives;

20 (II) is not debatable; and

21 (III) is not subject to amend22 ment, a motion to postpone, or a mo23 tion to proceed to the consideration of

24 other business.
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1 (iii) NO MOTION TO RECONSIDER.—A

2 motion to reconsider the vote by which a

3 motion under clause (i) is agreed to or dis4 agreed to shall not be in order.

5 (iv) AGREEMENT TO MOTION.—If a

6 motion under clause (i) is agreed to, the

7 joint resolution shall remain the unfinished

8 business of the House until the House dis9 poses of the joint resolution.

10 (B) DEBATE.—

11 (i) TIME.—Debate on a joint resolu12 tion, and on all debatable motions and ap13 peals in connection with consideration of a

14 joint resolution, shall be limited to not

15 more than 10 hours, which shall be divided

16 equally between those favoring and those

17 opposing the joint resolution. A motion

18 further to limit debate is in order and not

19 debatable.

20 (ii) AMENDMENTS AND MOTIONS OUT

21 OF ORDER.—An amendment to a joint res22 olution, a motion to postpone, to proceed

23 to the consideration of other business, or

24 to recommit such a joint resolution, or a

25 motion to reconsider the vote by which
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1 such a joint resolution is agreed to or dis2 agreed to is not in order.

3 (C) VOTE ON FINAL PASSAGE.—A vote on

4 final passage of the joint resolution shall be

5 taken in each House on or before the close of

6 the 15th calendar day during which that House

7 is in session after the resolution is reported by

8 the committee of that House to which it was re9 ferred, or after the committee has been dis10 charged from further consideration of the reso11 lution.

12 (D) RULINGS OF THE CHAIR OF PROCE13 DURE.—Appeals from the decisions of the Chair

14 relating to the application of the rules of either

15 House to the procedure relating to a joint reso16 lution shall be decided without debate.

17 (5) COORDINATION WITH ACTION BY OTHER

18 HOUSE.—

19 (A) IN GENERAL.—If, before the passage

20 by 1 House of a joint resolution of that House,

21 that House receives from the other House a

22 joint resolution, the procedures stated in this

23 paragraph shall apply.
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1 (B) NO REFERRAL.—The joint resolution

2 of the other House shall not be referred to a

3 committee.

4 (C) PROCEDURE.—With respect to a joint

5 resolution of the House receiving the joint

6 resolution—

7 (i) the procedure in that House shall

8 be the same as if no joint resolution had

9 been received from the other House; but

10 (ii) the vote on final passage shall be

11 on the joint resolution of the other House.

12 (6) RULES OF THE SENATE AND THE HOUSE

13 OF REPRESENTATIVES.—This subsection is enacted

14 by Congress—

15 (A) as an exercise of the rulemaking power

16 of the Senate and the House of Representa17 tives, respectively; and

18 (i) is deemed a part of the rules of

19 each House, respectively, but applicable

20 only with respect to the procedure to be

21 followed in that House in the case of a

22 joint resolution; and

23 (ii) supersedes other rules only to the

24 extent that the subsection is inconsistent

25 with those rules; and
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1 (B) with full recognition of the constitu2 tional right of either House to change the rules

3 (so far as the rules relate to the procedure of

4 that House) at any time, in the same manner

5 and to the same extent as in the case of any

6 other rule of that House.

7 SEC. 7. DETERMINATION EXEMPTING PERSON OR THE PEO8 PLE’S REPUBLIC OF CHINA FROM SECTIONS 4

9 AND 5.

10 (a) IN GENERAL.—Sections 4 and 5 shall not apply

11 to a person or to the People’s Republic of China 15 days

12 after the President reports to the Committee on Inter13 national Relations of the House of Representatives, the

14 Committee on Foreign Relations of the Senate, the Com15 mittee on Armed Services of the Senate, the Select Com16 mittee on Intelligence of the Senate, and the Committee

17 on Governmental Affairs of the Senate, that the President

18 has determined, on the basis of information provided by

19 that person, or otherwise obtained by the President,

20 that—

21 (1) the person did not, on or after January 1,

22 2000, knowingly transfer to or export from the Peo23 ple’s Republic of China the goods, services, or tech24 nology the apparent transfer or export of which
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1 caused that person to be identified in a report sub2 mitted pursuant to section 3(a);

3 (2) the person is subject to the primary juris4 diction of a government that is an adherent to one

5 or more relevant nonproliferation regimes, the per6 son was identified in a report submitted pursuant to

7 section 3(a) with respect to a transfer of goods,

8 services, or technology described in section 3(a)(1),

9 and such transfer was made consistent with the

10 guidelines and parameters of all such relevant re11 gimes of which such government is an adherent; or

12 (3) it is important to the national security of

13 the United States not to apply the provisions of sec14 tion 4 or 5.

15 (b) OPPORTUNITY TO PROVIDE INFORMATION.—

16 Congress urges the President—

17 (1) in every appropriate case, to contact in a

18 timely fashion each person identified in each report

19 submitted pursuant to section 3(a), or the govern20 ment with primary jurisdiction over such person, in

21 order to afford such person or government, the op22 portunity to provide explanatory, exculpatory, or

23 other additional information with respect to the

24 transfer that caused such person to be identified in

25 a report submitted pursuant to section 3(a); and
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1 (2) to exercise the authority in subsection (a) in

2 all cases where information obtained from a foreign

3 person identified in a report submitted pursuant to

4 section 3(a), or from the government with primary

5 jurisdiction over such person, establishes that the ex6 ercise of such authority is warranted.

7 (c) SUBMISSION IN CLASSIFIED FORM.—The deter8 mination and report of the President under subsection (a)

9 should be submitted in unclassified form, with classified

10 annexes as necessary.

11 SEC. 8. NOTIFICATION TO SECURITIES COMMISSION OF IN12 CLUSION IN REPORT.

13 (a) DEFINITIONS.—In this section, the following defi14 nitions shall apply:

15 (1) COMMISSION.—The term ‘‘Commission’’

16 means the Securities and Exchange Commission.

17 (2) REGISTERED NATIONAL SECURITIES ASSO18 CIATION.—The term ‘‘registered national securities

19 association’’ means an association registered under

20 section 15A(b) of the Securities Exchange Act of

21 1934 (15 U.S.C. 78o–3(b)).

22 (3) REGISTERED NATIONAL SECURITIES EX23 CHANGE.—The term ‘‘registered national securities

24 exchange’’ means a national securities exchange reg-
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1 istered under 6 of the Securities Exchange Act of

2 1934 (15 U.S.C. 78f).

3 (4) REGISTRATION STATEMENT.—The term

4 ‘‘registration statement’’ has the same meaning as

5 in section 2 of the Securities Act of 1933 (15 U.S.C.

6 77b).

7 (5) SECURITIES LAWS.—The terms ‘‘securities

8 laws’’ and ‘‘security’’ have the same meanings as in

9 section 3 of the Securities Exchange Act of 1934

10 (15 U.S.C. 78c).

11 (b) NOTIFICATION TO THE COMMISSION.—Each re12 port prepared by the President under section 3 shall be

13 transmitted to the Commission at the times specified in

14 section 3(b).

15 (c) REGULATIONS.—Not later than 6 months after

16 the date of enactment of this Act, the Commission shall

17 promulgate regulations—

18 (1) to ensure that securities investors are noti19 fied of the identity of any person included in a re20 port prepared by the President under section 3, the

21 securities of which are listed, or authorized for list22 ing, on a registered national securities exchange (or

23 tier or segment thereof) or by a registered national

24 securities association; and
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1 (2) to require each person included in a report

2 of the President under section 3 to provide notice of

3 such inclusion in each written report, statement, or

4 other filing or notice required from that person

5 under the securities laws, including—

6 (A) any registration statement;

7 (B) any annual or quarterly report, state8 ment, or other filing or notice;

9 (C) any proxy, consent, authorization, in10 formation statement, or other notice required to

11 be sent to shareholders with respect to any se12 curity registered pursuant to the securities

13 laws;

14 (D) any report, statement, or other filing

15 or notice required in connection with an initial

16 public offering; and

17 (E) any report, statement, or other filing

18 required in connection with a merger, acquisi19 tion, tender offer, or similar transaction.

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