II 

118TH CONGRESS 

2D SESSION S. 5571 

To impose sanctions with respect to foreign persons that knowingly engage 

in significant operations in the defense and related materiel sector or 

the surveillance technology sector of the economy of the People’s Republic 

of China, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 17 (legislative day, DECEMBER 16), 2024 

Mr. SCOTT of Florida introduced the following bill; which was read twice and 

referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To impose sanctions with respect to foreign persons that 

knowingly engage in significant operations in the defense 

and related materiel sector or the surveillance technology 

sector of the economy of the People’s Republic of China, 

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 ‘‘Chinese Military and 

5 Surveillance Company Sanctions Act of 2024’’. 

6 SEC. 2. FINDINGS AND SENSE OF CONGRESS. 

7 (a) FINDINGS.—Congress finds the following: 


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1 (1) Under Executive Order 13959 of November 

2 17, 2020, the President found that the People’s Re3 public of China ‘‘increases the size of the country’s 

4 military-industrial complex by compelling civilian 

5 Chinese companies to support its military and intel6 ligence activities. Those companies, though remain7 ing ostensibly private and civilian, directly support 

8 the PRC’s military, intelligence, and security 

9 apparatuses and aid in their development and mod10 ernization.’’. The President further determined that 

11 ‘‘the PRC exploits United States investors to finance 

12 the development and modernization of its military.’’. 

13 As a result, Executive Order 13959 restricted trans14 actions in publicly traded securities of Communist 

15 Chinese military companies listed pursuant to sec16 tion 1237 of the Strom Thurmond National Defense 

17 Authorization Act for Fiscal Year 1999 (Public Law 

18 105–261; 50 U.S.C. 1701 note). 

19 (2) Although Executive Order 13959 targets 

20 transactions in some public securities, it does not 

21 fully address all public securities of concern or ad22 dress financing options for Communist Chinese mili23 tary companies through other forms of equity fi24 nancing or debt financing, nor does it limit trans25 actions with United States persons that may genVerDate Sep 11 2014 05:06 Jan 21, 2025 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S5571.IS S5571

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1 erate earnings in a manner that facilitates company 

2 growth. 

3 (3) The Office of Foreign Assets Control of the 

4 Department of the Treasury, by blocking the assets 

5 of certain entities pursuant to certain specific dele6 gated authorities and including those entities on the 

7 list of specially designated nationals and blocked 

8 persons (commonly referred to as the ‘‘SDN list’’), 

9 is able to forbid virtually any transaction between 

10 United States persons and such entities, including 

11 debt and equity financing and the exchange of goods 

12 and services. Conversely, restrictions limited to pub13 licly traded securities are less comprehensive, and in 

14 the case of certain Chinese companies of concern, 

15 may be of limited impact if the companies do not 

16 issue such securities or the full corporate family is 

17 not adequately covered. 

18 (4) While Executive Order 13959 applies only 

19 to the purchase or sale of certain publicly traded se20 curities by United States persons, the Office of For21 eign Assets Control’s inclusion of a foreign entity on 

22 the SDN list imposes a broader sanction by blocking 

23 the property and interest in property of the entity, 

24 which may further deter third-country persons from 


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1 dealing with it, amplifying the effects of United 

2 States sanctions globally. 

3 (5) The Office of Foreign Assets Control has 

4 long devoted significant resources to compiling evi5 dence in support of its sanctions, which enhances the 

6 effectiveness of United States sanctions, encourages 

7 allies to consider comparable measures, and 

8 strengthens national security. 

9 (6) On June 3, 2021, the President issued Ex10 ecutive Order 14032, which amended Executive 

11 Order 13959 by exclusively delegating authority for 

12 naming Chinese military companies subject to in13 vestment restrictions to the Secretary of the Treas14 ury, in consultation with the Secretary of State and, 

15 as appropriate, the Secretary of Defense, and ex16 panded restrictions to entities that operate or have 

17 operated in the surveillance technology sector of the 

18 Chinese economy. 

19 (b) SENSE OF CONGRESS.—It is the sense of Con20 gress that— 

21 (1) it is in the national interest of the United 

22 States to more fully address the economic threat 

23 that the Chinese Communist Party poses to United 

24 States freedom and prosperity; 


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1 (2) the United States must adopt policies that 

2 declare and defend the interests of the United States 

3 and deter the aggression of the Chinese Communist 

4 Party; and 

5 (3) the national emergency declared under Ex6 ecutive Order 13959 calls for the United States— 

7 (A) to more fully cut off financing avenues 

8 for Communist Chinese military and surveil9 lance companies; 

10 (B) to prevent adaptation by a company to 

11 partial restrictions that are limited to publicly 

12 traded securities; 

13 (C) to ensure that the United States as14 sembles an appropriate evidentiary basis to sup15 port the effectiveness of sanctions; 

16 (D) to enhance the impact of economic 

17 sanctions by deterring third-country persons 

18 from dealing with the companies; and 

19 (E) to link the imposition of sanctions to 

20 clear objectives that serve to resolve the na21 tional emergency. 


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1 SEC. 3. SANCTIONS WITH RESPECT TO COMMUNIST CHI2 NESE MILITARY AND SURVEILLANCE COMPA3 NIES. 

4 (a) IN GENERAL.—On and after the date that is 180 

5 days after the date of the enactment of this Act, the Presi6 dent shall impose the sanction described in subsection (c) 

7 with respect to any foreign person described in subsection 

8 (b). 

9 (b) FOREIGN PERSON DESCRIBED.—A foreign per10 son described in this subsection is any foreign person the 

11 President determines is knowingly operating in the de12 fense sector, military-civil fusion operations sector, or sur13 veillance technology sector of the economy of the People’s 

14 Republic of China. 

15 (c) SANCTION DESCRIBED.—The President shall pro16 hibit any transactions in foreign exchange that are subject 

17 to the jurisdiction of the United States and in which the 

18 foreign person described in subsection (b) has any inter19 est. 

20 (d) ADDITIONAL MEASURE RELATING TO FACILITA21 TION OF CERTAIN TRANSACTIONS.—The President shall 

22 prohibit or impose strict conditions on the opening or 

23 maintaining in the United States of a correspondent ac24 count or payable-through account by a foreign financial 

25 institution that the President determines has, on or after 

26 the date that is 180 days after the date of the enactment 


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1 of this Act, knowingly conducted or facilitated a signifi2 cant transaction or transactions on behalf of a foreign per3 son described in subsection (b). 

4 (e) CONGRESSIONAL REQUESTS.—Not later than 30 

5 days after receiving a request from the chairman or rank6 ing member of one of the appropriate congressional com7 mittees with respect to whether a person meets the criteria 

8 for the imposition of sanctions under subsection (c) or (d), 

9 the President shall— 

10 (1) determine if the person meets such criteria; 

11 and 

12 (2) submit a report to the chairman or ranking 

13 member, as the case may be, who submitted the re14 quest with respect to that determination that in15 cludes a statement of whether or not the President 

16 imposed or intends to impose sanctions with respect 

17 to the person. 

18 (f) DETERMINATIONS AND REPORTS.— 

19 (1) IN GENERAL.—Not later than one year 

20 after the date of the enactment of this Act, and an21 nually thereafter, the Secretary of the Treasury, in 

22 consultation with the Secretary of State, the Sec23 retary of Commerce, and the Secretary of Defense, 

24 shall— 


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1 (A) determine whether each foreign person 

2 on a list specified in paragraph (2), and each 

3 entity described in paragraph (3), meets the cri4 teria for the imposition of sanctions under sub5 section (c) or (d); and 

6 (B) submit to the appropriate congres7 sional committees a report explaining the re8 sults of each such determination. 

9 (2) LISTS SPECIFIED.—The lists specified in 

10 this paragraph are the following: 

11 (A) The Consolidated Screening List of the 

12 Federal Government. 

13 (B) The list of Chinese military companies 

14 operating directly or indirectly in the United 

15 States maintained by the Secretary of Defense 

16 under section 1260H(b) of the William M. 

17 (Mac) Thornberry National Defense Authoriza18 tion Act for Fiscal Year 2021 (Public Law 

19 116–283; 10 U.S.C. 113 note). 

20 (C) A list maintained under clause (i), (ii), 

21 (iv), or (v) of section 2(d)(2)(B) of the Act enti22 tled ‘‘An Act to ensure that goods made with 

23 forced labor in the Xinjiang Autonomous Re24 gion of the People’s Republic of China do not 

25 enter the United States market, and for other 


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1 purposes’’, approved December 23, 2021 (Pub2 lic Law 117–78; 22 U.S.C. 6901 note) (com3 monly referred to as the ‘‘Uyghur Forced Labor 

4 Prevention Act’’). 

5 (3) ENTITIES DESCRIBED.—An entity is de6 scribed in this paragraph if the entity produces 

7 equipment or services on the list of communications 

8 equipment and services that pose an unacceptable 

9 risk to the national security of the United States or 

10 the security and safety of United States persons 

11 maintained by the Federal Communications Com12 mission under section 2 of the Secure and Trusted 

13 Communications Networks Act of 2019 (47 U.S.C. 

14 1601). 

15 (g) CONSIDERATION OF CERTAIN ACTIVITIES.—In 

16 making determinations with respect to the imposition of 

17 sanctions under subsection (c) or (d), the Secretary of the 

18 Treasury may, if practicable, focus particular attention on 

19 foreign persons engaged in any of the following: 

20 (1) Artificial intelligence, machine learning, au21 tonomy, and related advances. 

22 (2) High-performance computing, semiconduc23 tors, and advanced computer hardware and software. 

24 (3) Quantum information science and tech25 nology. 


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1 (4) Robotics, automation, and advanced manu2 facturing. 

3 (5) Advanced communications technology and 

4 immersive technology. 

5 (6) Biotechnology, medical technology, 

6 genomics, and synthetic biology. 

7 (7) Data storage, data management, and cyber8 security, including biometrics. 

9 (8) Advanced materials science, including com10 posites and 2 dimensional materials. 

11 (9) Hypersonic flight technologies for glide or 

12 any other purposes. 

13 (10) Space-related technologies, including sat14 ellite communications. 

15 (11) Aviation and aerospace technologies. 

16 (12) Any other area on the Critical and Emerg17 ing Technologies List of the National Science and 

18 Technology Council. 

19 (h) IMPLEMENTATION; PENALTIES.— 

20 (1) IMPLEMENTATION.—The President may ex21 ercise the authorities provided under sections 203 

22 and 205 of the International Emergency Economic 

23 Powers Act (50 U.S.C. 1702 and 1704) to the ex24 tent necessary to carry out this section. 


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1 (2) PENALTIES.—A person that violates, at2 tempts to violate, conspires to violate, or causes a 

3 violation of this section or any regulation, license, or 

4 order issued to carry out this section shall be subject 

5 to the penalties set forth in subsections (b) and (c) 

6 of section 206 of the International Emergency Eco7 nomic Powers Act (50 U.S.C. 1705) to the same ex8 tent as a person that commits an unlawful act de9 scribed in subsection (a) of that section. 

10 (i) WAIVER.— 

11 (1) IN GENERAL.—The President may, for re12 newable periods of not to exceed 180 days, waive the 

13 application of this section with respect to a foreign 

14 person if the President certifies to the appropriate 

15 congressional committees that such a waiver is in 

16 the national security interests of the United States. 

17 (2) BRIEFING.—Not later than 90 days after 

18 the issuance of a waiver under paragraph (1), and 

19 every 180 days thereafter while the waiver remains 

20 in effect, the President shall brief the appropriate 

21 congressional committees on the reasons for the 

22 waiver. 

23 (j) EXCEPTIONS.— 


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1 (1) INTELLIGENCE AND LAW ENFORCEMENT

2 ACTIVITIES.—Sanctions under this section shall not 

3 apply with respect to— 

4 (A) any activity subject to the reporting 

5 requirements under title V of the National Se6 curity Act of 1947 (50 U.S.C. 3091 et seq.); or 

7 (B) any authorized intelligence or law en8 forcement activities of the United States. 

9 (2) HUMANITARIAN ACTIVITIES.—The Presi10 dent may not impose sanctions under this section 

11 with respect to any person for conducting or facili12 tating a transaction for the sale of agricultural com13 modities, food, medicine, or medical devices or for 

14 the provision of humanitarian assistance. 

15 (k) REGULATORY REQUIREMENTS.— 

16 (1) IN GENERAL.—The President shall, not 

17 later than 180 days after the date of the enactment 

18 of this Act, prescribe such regulations as are nec19 essary for the implementation of this section. 

20 (2) NOTIFICATION TO CONGRESS.—Not later 

21 than 10 days before prescribing regulations under 

22 paragraph (1), the President shall notify the appro23 priate congressional committees regarding the pro24 posed regulations and the provisions of this section 

25 that the regulations are implementing. 


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1 (l) SUNSET.—The authority to impose sanctions 

2 under this section shall terminate on the date that is 7 

3 years after the date of the enactment of this Act. 

4 (m) DEFINITIONS.—In this section: 

5 (1) ACCOUNT; CORRESPONDENT ACCOUNT; PAY6 ABLE-THROUGH ACCOUNT.—The terms ‘‘account’’, 

7 ‘‘correspondent account’’, and ‘‘payable-through ac8 count’’ have the meanings given those terms in sec9 tion 5318A of title 31, United States Code. 

10 (2) APPROPRIATE CONGRESSIONAL COMMIT11 TEES.—The term ‘‘appropriate congressional com12 mittees’’ means— 

13 (A) the Committee on Armed Services, the 

14 Committee on Banking, Housing, and Urban 

15 Affairs, the Committee on Foreign Relations, 

16 and the Committee on Homeland Security and 

17 Governmental Affairs; and 

18 (B) the Committee on Armed Services, the 

19 Committee on Financial Services, the Com20 mittee on Foreign Affairs, and the Committee 

21 on Homeland Security of the House of Rep22 resentatives. 

23 (3) EXECUTIVE ORDER 13959.—The term ‘‘Ex24 ecutive Order 13959’’ means Executive Order 13959 

25 (50 U.S.C. 1701 note; relating to addressing the 


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1 threat from securities investments that finance Com2 munist Chinese military companies), as in effect on 

3 the date of the enactment of this Act, including as 

4 most recently amended before such date of enact5 ment by Executive Order 14032 (86 Fed. Reg. 

6 30145). 

7 (4) FOREIGN PERSON.—The term ‘‘foreign per8 son’’ means an individual or entity that is not a 

9 United States person. 

10 (5) KNOWINGLY.—The term ‘‘knowingly’’ with 

11 respect to conduct, a circumstance, or a result, 

12 means that a person has actual knowledge, or should 

13 have known, of the conduct, the circumstance, or the 

14 result. 

15 (6) UNITED STATES PERSON.—The term 

16 ‘‘United States person’’ means— 

17 (A) a United States citizen or an alien law18 fully admitted for permanent residence to the 

19 United States; 

20 (B) an entity organized under the laws of 

21 the United States or of any jurisdiction within 

22 the United States, including a foreign branch of 

23 such an entity; or 

24 (C) a person in the United States. 


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1 SEC. 4. CODIFICATION OF EXECUTIVE ORDER 13959. 

2 (a) IN GENERAL.—Executive Order 13959 (50 

3 U.S.C. 1701 note; relating to addressing the threat from 

4 securities investments that finance Communist Chinese 

5 military companies), as in effect on the date of the enact6 ment of this Act, and sanctions imposed pursuant to that 

7 Executive Order, shall remain in effect until terminated 

8 by an Act of Congress. 

9 (b) ANNEX.—Not less frequently than annually, the 

10 President shall— 

11 (1) update the Annex to Executive Order 

12 13959; and 

13 (2) include, with respect to each entity included 

14 in that Annex, any subsidiary or affiliate of the enti15 ty that engages in activities relating to the reason 

16 the entity is included in the Annex. 

Æ 


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