I 

116TH CONGRESS 

2D SESSION H. R. 7064 

To prohibit financial investment by a United States person in foreign industrial defense corporations with substantial contracts with, ties to, or 

support from, the Chinese military and affiliated entities, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 1, 2020 

Mr. BANKS (for himself, Mr. GALLAGHER, and Mr. LAMALFA) introduced the 

following bill; which was referred to the Committee on Financial Services, 

and in addition to the Committee on Foreign Affairs, 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 prohibit financial investment by a United States person 

in foreign industrial defense corporations with substantial 

contracts with, ties to, or support from, the Chinese 

military and affiliated entities, 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 ‘‘Stop Funding the PLA 

5 Act’’. 


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1 SEC. 2. SPECIFICATION OF PROHIBITED FOREIGN INDUS2 TRIAL DEFENSE CORPORATIONS. 

3 (a) SPECIFICATION REQUIRED.—Not later than 90 

4 days after the date of the enactment of this section, and 

5 annually thereafter, the Secretary, in consultation with the 

6 Secretary of State, the Secretary of Defense, and the do7 mestic intelligence community, shall submit to the Com8 mittee on Banking, Housing, and Urban Affairs of the 

9 Senate and the Committee on Financial Services of the 

10 House of Representatives a report that specifies each for11 eign industrial defense corporation with substantial con12 tracts with, ties to, or support from, a PLA entity. 

13 (b) EFFECT OF SPECIFICATION.— 

14 (1) PURCHASE OF SECURITIES PROHIBITED.— 

15 Beginning on the date that is 180 days after a re16 port is submitted under subsection (a), a United 

17 States person may not purchase securities of a for18 eign industrial defense corporation specified in such 

19 report. 

20 (2) DIVESTMENT REQUIRED.— 

21 (A) IN GENERAL.—Except as provided in 

22 subparagraph (B), not later than 180 days 

23 after a report is submitted under subsection 

24 (a), a United States person that owns a secu25 rity of a foreign industrial defense corporation 


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1 specified in such report shall divest themselves 

2 of such security. 

3 (B) EXTENDED WIND-DOWN IN CASE OF

4 FINANCIAL HARDSHIP.—The Secretary may 

5 allow a United States person a 270-day exten6 sion to the 180-day period for compliance under 

7 subparagraph (A) if the Secretary determines 

8 that such entity— 

9 (i) owns a security of a foreign indus10 trial defense corporation specified in a re11 port submitted under subsection (a); and 

12 (ii) would experience extreme financial 

13 hardship to comply within the 180-day pe14 riod under subparagraph (A). 

15 (c) ASSIGNMENT OF AUTHORITY.— 

16 (1) ENFORCEMENT.—The Secretary shall en17 force the provisions of this section. 

18 (2) REGULATIONS.—Not later than 90 days 

19 after the date of the enactment of this section, the 

20 Secretary shall issue such regulations and guidance 

21 as necessary to implement and enforce this section. 

22 (d) REPORT.—Not later than 360 days after the date 

23 of the enactment of this section, the Secretary shall sub24 mit to the Committee on Banking, Housing, and Urban 

25 Affairs of the Senate and the Committee on Financial 


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1 Services of the House of Representatives a report on the 

2 progress of the divestments required under subsection 

3 (b)(2). 

4 (e) PETITION FOR REMOVAL FROM DESIGNATION.— 

5 (1) IN GENERAL.—A foreign industrial defense 

6 corporation may petition the Secretary to not be in7 cluded or removed from a report under subsection 

8 (a). 

9 (2) REQUIREMENTS.—A petition under para10 graph (1) shall include such documentation of the 

11 assets and liabilities, company financial records, 

12 ownership and investor records, and past and cur13 rent business contracts of the foreign industrial de14 fense corporation submitting such petition that the 

15 Secretary determines necessary. 

16 (f) FINAL REPORT.—Not later than 8 years after the 

17 date of the enactment of this section, the Secretary shall 

18 submit to the Committee on Banking, Housing, and 

19 Urban Affairs of the Senate and the Committee on Finan20 cial Services of the House of Representatives a final report 

21 on the implementation of this section, including— 

22 (1) an analysis of the effectiveness of this sec23 tion; 

24 (2) the development and maintenance of the re25 ports required under subsection (a); and 


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1 (3) a description of completed and ongoing civil 

2 and criminal cases related to securities of foreign in3 dustrial defense corporations. 

4 (g) SUNSET.—This section and the authority under 

5 this section shall expire on the date that is 10 years after 

6 the date of the enactment of this section. 

7 (h) DEFINITIONS.—In this section: 

8 (1) PLA ENTITY.—The term ‘‘PLA entity’’ 

9 means any entity of the Chinese military, including 

10 the People’s Liberation Army, Navy, Air Force, 

11 Rocket Force, Strategic Support Force, and Joint 

12 Logistics Force, and the Chinese intelligence com13 munity. 

14 (2) FOREIGN INDUSTRIAL DEFENSE CORPORA15 TION.—The term ‘‘foreign industrial defense cor16 poration’’ means any corporation based— 

17 (A) outside of the United States; and 

18 (B) in a country that the Secretary, in 

19 consultation with the Secretary of Defense, the 

20 Secretary of State, and the domestic intel21 ligence community, determines does not possess 

22 positive economic and military relations with 

23 the United States. 

24 (3) SECRETARY.—The term ‘‘Secretary’’ means 

25 the Secretary of the Treasury. 


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1 (4) SUBSTANTIAL.—The term ‘‘substantial’’ 

2 shall, with respect to contracts with, ties to, or sup3 port from, a PLA entity, have the meaning deter4 mined by the Secretary, in consultation with the 

5 Secretary of State, the Secretary of Defense, and 

6 the domestic intelligence community. 

Æ 


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