I 

118TH CONGRESS 

1ST SESSION H. R. 6349 

To prohibit or require notification with respect to certain activities of United 

States persons involving countries of concern, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 9, 2023 

Mr. MCCAUL (for himself and Mr. MEEKS) introduced the following bill; which 

was referred to the Committee on Foreign Affairs 

A BILL 

To prohibit or require notification with respect to certain 

activities of United States persons involving countries 

of concern, 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 ‘‘Preventing Adversaries 

5 from Developing Critical Capabilities Act’’. 

6 SEC. 2. EXERCISE OF AUTHORITIES UNDER THE INTER7 NATIONAL EMERGENCY ECONOMIC POWERS 

8 ACT. 

9 (a) IN GENERAL.—The President may exercise all 

10 authorities provided under the International Emergency 


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1 Economic Powers Act (50 U.S.C. 1701 et seq.) necessary 

2 to carry out the provisions of this Act, including authori3 ties to impose penalties under section 206 of such Act. 

4 (b) DELEGATION.—The President may delegate the 

5 authorities described in subsection (a) to the head of any 

6 Federal agency the President determines appropriate in 

7 order to carry out the provisions of this Act. 

8 SEC. 3. PROHIBITION ON COVERED ACTIVITIES IN COV9 ERED SECTORS THAT POSE PARTICULARLY 

10 ACUTE THREATS TO UNITED STATES NA11 TIONAL SECURITY. 

12 (a) IDENTIFICATION OF CATEGORIES OF TECH13 NOLOGIES AND PRODUCTS.— 

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

15 after the date of the enactment of this Act, and an16 nually thereafter as described in paragraph (2), the 

17 President— 

18 (A) shall identify categories of technologies 

19 and products in covered sectors that may pose 

20 a particularly acute threat to the national secu21 rity of the United States if developed or ac22 quired by a country of concern; and 

23 (B) publish a list of the categories of tech24 nologies and products identified under para25 graph (1) in the Federal Register. 


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1 (2) UPDATES.—The President shall annually 

2 review and update the list of the categories of tech3 nologies and products identified under paragraph 

4 (1)(A) and update the Federal Register under para5 graph (1)(B) as appropriate. 

6 (b) PROHIBITION ON COVERED ACTIVITIES.—The 

7 President shall, on or after the date on which the initial 

8 list of categories of technologies and products is published 

9 in the Federal Register pursuant to subsection (a)(1)(B), 

10 prescribe, subject to public notice and comment, regula11 tions to prohibit a United States person from engaging, 

12 directly or indirectly, in a covered activity involving a cat13 egory of technologies and products on such list of cat14 egories of technologies and products in a covered sector. 

15 Such regulations should— 

16 (1) require that a United States person take all 

17 reasonable steps to prohibit and prevent any trans18 action by a foreign entity under the control of the 

19 United States person that would be a prohibited 

20 transaction if engaged in by a United States person; 

21 and 

22 (2) exclude any transaction consisting of the ac23 quisition of an equity or other interest in an entity 

24 located outside a country of concern, where the 

25 President has determined that the government of the 


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1 country in which that entity is established or has its 

2 principal place of business has in place a program 

3 for the restriction of certain activities involving 

4 countries of concern that is comparable to the provi5 sions provided for in this Act. 

6 (c) SENSE OF CONGRESS.—It is the sense of Con7 gress that the covered sectors include certain categories 

8 of technologies and products that would pose a particu9 larly acute threat to the national security of the United 

10 States if developed or acquired by a country of concern, 

11 and that the President should identify certain technologies 

12 and products in the covered sectors as categories of tech13 nologies and products in covered sectors for purposes of 

14 subsection (a)(1). 

15 SEC. 4. MANDATORY NOTIFICATION OF COVERED ACTIVI16 TIES IN COVERED SECTORS THAT MAY POSE 

17 THREATS TO UNITED STATES NATIONAL SE18 CURITY. 

19 (a) IDENTIFICATION OF CATEGORIES OF TECH20 NOLOGIES AND PRODUCTS.—Not later than one year after 

21 the date of the enactment of this Act, the President 

22 shall— 

23 (1) identify categories of technologies and prod24 ucts in covered sectors that may pose a threat to the 


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1 national security of the United States if developed or 

2 acquired by a country of concern; 

3 (2) publish a list of the categories of tech4 nologies and products identified under paragraph (1) 

5 in the Federal Register; and 

6 (3) annually thereafter, review the categories of 

7 technologies and products identified under para8 graph (1) and publish an updated list of the cat9 egories of technologies and products in the Federal 

10 Register under paragraph (2) if the list identified in 

11 paragraph (2) has changed. 

12 (b) MANDATORY NOTIFICATION.— 

13 (1) IN GENERAL.—Beginning on the date that 

14 is 90 days after the date on which the initial list of 

15 categories of technologies and products is published 

16 in the Federal Register pursuant to subsection 

17 (a)(2), a United States person engaging in a covered 

18 activity involving a category identified in subsection 

19 (a)(1), or controlling a foreign entity engaging in an 

20 activity that would be a covered activity if engaged 

21 in by a United States person, shall submit to the 

22 President a complete written notification of the ac23 tivity not later than 14 days after the completion 

24 date of the activity. 

25 (2) CIRCULATION OF NOTIFICATION.— 


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1 (A) IN GENERAL.—The President shall, 

2 upon receipt of a notification under paragraph 

3 (1), promptly inspect the notification for com4 pleteness. 

5 (B) INCOMPLETE NOTIFICATION.—If a no6 tification submitted under paragraph (1) is in7 complete, the President shall promptly inform 

8 the United States person that submits the noti9 fication that the notification is not complete 

10 and provide an explanation for relevant mate11 rial respect in which the notification is not com12 plete. 

13 (3) IDENTIFICATION OF NON-NOTIFIED ACTIV14 ITY.—The President shall establish a process to 

15 identify a covered activity involving a category iden16 tified under subsection (a)(1) for which— 

17 (A) a notification is not submitted to the 

18 President under paragraph (1); and 

19 (B) information is reasonably available. 

20 (c) CONFIDENTIALITY OF INFORMATION.— 

21 (1) IN GENERAL.—Except as provided in para22 graph (2), any information or documentary material 

23 filed with the President pursuant to this section 

24 shall be exempt from disclosure under section 

25 552(b)(3) of title 5, United States Code, and no 


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1 such information or documentary material may be 

2 made public by any government agency or Member 

3 of Congress. 

4 (2) EXCEPTIONS.—Subject to appropriate con5 fidentiality and classification requirements, the ex6 emption from disclosure provided by paragraph (1) 

7 shall not prevent the disclosure of the following: 

8 (A) Information relevant to any adminis9 trative or judicial action or proceeding. 

10 (B) Information provided to Congress or 

11 any of the appropriate congressional commit12 tees. 

13 (C) Information important to national se14 curity analysis or actions of the President to 

15 any domestic government entity, or to any for16 eign governmental entity of an ally or partner 

17 of the United States, under the direction and 

18 authorization of the President, only to the ex19 tent necessary for national security purposes. 

20 (D) Information that the parties have con21 sented to be disclosed to third parties. 

22 SEC. 5. REPORTING REQUIREMENTS. 

23 (a) IN GENERAL.—Not later than one year after the 

24 date on which the regulations prescribed under section 6 

25 take effect, and not less frequently than annually thereVerDate Sep 11 2014 03:03 Nov 28, 2023 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6349.IH H6349

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1 after, the President shall submit to the appropriate con2 gressional committees a report that— 

3 (1) lists all notifications submitted under sec4 tion 4(b) during the year preceding submission of 

5 the report, disaggregated by— 

6 (A) sector; 

7 (B) covered activity; 

8 (C) covered foreign entity; and 

9 (D) country of concern; 

10 (2) an assessment of whether to amend the reg11 ulations, including whether to amend the definition 

12 of ‘‘covered sectors’’ to enhance national security; 

13 (3) provides additional context and information 

14 regarding trends in the sectors, the types of covered 

15 activity, and the countries involved in those notifica16 tions, including— 

17 (A) the location of the relevant covered for18 eign entities; and 

19 (B) the country in which the United States 

20 person or foreign entity controlled by such 

21 United States person involved in the relevant 

22 covered activity is located; and 

23 (4) assesses the overall impact of those notifica24 tions, including recommendations for— 


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1 (A) expanding existing Federal programs 

2 to support the production or supply of covered 

3 sectors in the United States, including the po4 tential of existing authorities to address any re5 lated national security concerns; and 

6 (B) the continuation, expansion, or modi7 fication of the implementation and administra8 tion of this Act. 

9 (b) FORM.—Each report required by this section 

10 shall be submitted in unclassified form, but may include 

11 a classified annex. 

12 (c) PROHIBITION ON DISCLOSURE.—Information 

13 contained in each report required by this section may be 

14 withheld from disclosure only to the extent otherwise per15 mitted by statute, except that all information included 

16 pursuant to subsection (a)(1) shall be withheld from public 

17 disclosure. 

18 SEC. 6. REQUIREMENT FOR REGULATIONS. 

19 (a) IN GENERAL.—Not later than 180 days after the 

20 date on which the initial list of categories of technologies 

21 and products have been published in the Federal Register 

22 pursuant to sections 3(a)(1)(B) and 4(a)(2), the President 

23 shall prescribe and finalize proposed regulations to carry 

24 out this Act. 


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1 (b) ELEMENTS.—Regulations prescribed to carry out 

2 this Act shall specify— 

3 (1) the types of activities that will be considered 

4 to be covered activities; 

5 (2) the technologies and products in covered 

6 sectors with respect to which covered activities are 

7 prohibited under section 3(b) or require a notifica8 tion under section 4(b); and 

9 (3) a process by which parties can ask ques10 tions and get timely guidance as to whether a cov11 ered activity is prohibited under section 3(b) or re12 quires a notification under section 4(b). 

13 (c) REQUIREMENTS FOR CERTAIN REGULATIONS.— 

14 The President shall prescribe regulations further defining 

15 the terms used in this Act, including the terms ‘‘covered 

16 activity’’, ‘‘covered foreign entity’’, and ‘‘party’’, to maxi17 mize the effectiveness of carrying out this Act in accord18 ance with subchapter II of chapter 5 and chapter 7 of 

19 title 5 (commonly known as the ‘‘Administrative Proce20 dure Act’’). 

21 (d) PUBLIC NOTICE AND COMMENT.—Regulations 

22 issued pursuant to subsection (a) shall be subject to public 

23 notice and comment. 


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1 (e) LOW-BURDEN REGULATIONS.—In prescribing 

2 regulations under this section, the President shall, to the 

3 extent practicable, structure the regulations— 

4 (1) to minimize the cost and complexity of com5 pliance for affected parties; 

6 (2) to ensure the benefits of the regulations 

7 outweigh their costs; 

8 (3) to adopt the least burdensome alternative 

9 that achieves regulatory objectives; 

10 (4) to prioritize transparency and stakeholder 

11 involvement in the process of prescribing the regula12 tions; and 

13 (5) to regularly review and streamline existing 

14 regulations promulgated pursuant to this Act to re15 duce redundancy and complexity. 

16 (f) PENALTIES WITH RESPECT TO UNLAWFUL

17 ACTS.—Regulations issued under this section shall, con18 sistent with the authority provided by section 2(a), provide 

19 for the imposition of civil penalties for violations of this 

20 section, that involve— 

21 (1) engaging in a covered activity prohibited 

22 under section 3(b) pursuant to the regulations 

23 issued under this section; 

24 (2) failing to submit a timely notification under 

25 section 4(b) with respect to a covered activity or to 


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1 submit other information as required by the des2 ignated agency; or 

3 (3) submitting a material misstatement or omit4 ting a material fact in any information submitted in 

5 a notification under section 4(b). 

6 (g) ENFORCEMENT.—Consistent with the authority 

7 provided by section 2(a), the President may direct the At8 torney General to seek appropriate relief in the district 

9 courts of the United States, in order to implement and 

10 enforce this Act. 

11 (h) CONGRESSIONAL NOTIFICATION.—The President 

12 shall submit to the appropriate congressional committees 

13 all regulations prescribed to carry out this Act not later 

14 than 30 days before such regulations are to take effect. 

15 SEC. 7. MULTILATERAL ENGAGEMENT AND COORDINA16 TION. 

17 (a) IN GENERAL.—The President shall delegate the 

18 authorities and functions under this section to the Sec19 retary of State. 

20 (b) AUTHORITIES.—The Secretary of State, in co21 ordination with the heads or other relevant Federal agen22 cies, should— 

23 (1) conduct bilateral and multilateral engage24 ment with the governments of countries that are al25 lies and partners of the United States to promote 


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1 and increase coordination of protocols and proce2 dures to facilitate the effective implementation of 

3 and appropriate compliance with the prohibitions 

4 and notifications pursuant to this Act; 

5 (2) upon adoption of protocols and procedures 

6 described in paragraph (1), work with those govern7 ments to establish mechanisms for sharing informa8 tion, including trends, with respect to such activities; 

9 and 

10 (3) work with and encourage the governments 

11 of countries that are allies and partners of the 

12 United States to develop similar mechanisms of their 

13 own. 

14 (c) STRATEGY FOR MULTILATERAL ENGAGEMENT

15 AND COORDINATION.—Not later than 180 days after the 

16 date of the enactment of this Act, the Secretary of State, 

17 in coordination with the heads of other relevant Federal 

18 agencies, should— 

19 (1) develop a strategy to work with the govern20 ments of countries that are allies and partners of 

21 the United States to develop mechanisms that are 

22 comparable to the prohibitions and notifications pur23 suant to this Act; and 


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1 (2) assess opportunities to provide technical as2 sistance to those countries with respect to the devel3 opment of those mechanisms. 

4 (d) REPORT.—Not later than one year after the date 

5 of the enactment of this Act, and annually thereafter for 

6 4 years, the Secretary of State shall submit to the appro7 priate congressional committees a report that includes— 

8 (1) a discussion of any strategy developed pur9 suant to subsection (c)(1), including key tools and 

10 objectives for the development of comparable mecha11 nisms by the governments of allies and partners of 

12 the United States; 

13 (2) a list of partner and allied countries to tar14 get for cooperation in developing their own screening 

15 programs; 

16 (3) the status of the strategy’s implementation 

17 and outcomes; and 

18 (4) a description of impediments to the estab19 lishment of comparable mechanisms by governments 

20 of allies and partners of the United States. 

21 SEC. 8. AUTHORIZATION OF APPROPRIATIONS. 

22 (a) IN GENERAL.—There is authorized to be appro23 priated $25,000,000, to be derived from amounts other24 wise authorized to be appropriated to the President, for 

25 each of the first two fiscal years beginning on or after 


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1 the date of the enactment of this Act, to carry out this 

2 Act, including to provide outreach to industry and persons 

3 affected by this Act. 

4 (b) HIRING AUTHORITY.— 

5 (1) PRESIDENT.—The President may appoint, 

6 without regard to the provisions of sections 3309 

7 through 3318 of title 5, United States Code, not 

8 more than 15 candidates directly to positions in the 

9 competitive service (as defined in section 2102 of 

10 that title). 

11 (2) AGENCY.—The head of the Federal depart12 ment or agency designated under section 2(b) to 

13 hold primary responsibility for administering this 

14 Act may appoint, without regard to the provisions of 

15 sections 3309 through 3318 of title 5, United States 

16 Code, not fewer than 25 candidates directly to posi17 tions in the competitive service (as defined in section 

18 2102 of that title) of such department or agency. 

19 (3) PRIMARY RESPONSIBILITY.—The primary 

20 responsibility of individuals in positions authorized 

21 to be hired under this subsection shall be to admin22 ister this Act. 

23 SEC. 9. RULE OF CONSTRUCTION. 

24 Nothing in this Act may be construed to— 


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1 (1) restrain or deter United States activities 

2 abroad if such activities do not pose a risk to the na3 tional security of the United States; or 

4 (2) alter or negate the authority of the Presi5 dent under any authority, process, regulation, inves6 tigation, enforcement measure, or review provided by 

7 or established under any other provision of Federal 

8 law, or any other authority of the President or the 

9 Congress under the Constitution of the United 

10 States. 

11 SEC. 10. NATIONAL INTEREST WAIVER. 

12 (a) IN GENERAL.—Subject to subsection (b), the 

13 President is authorized to exempt from any applicable pro14 hibition or notification requirement any activity deter15 mined by the President, in consultation with the heads of 

16 relevant Federal agencies, as appropriate, to be in the na17 tional interest of the United States. 

18 (b) CONGRESSIONAL NOTIFICATION.—The President 

19 shall— 

20 (1) notify the appropriate congressional com21 mittees not later than 48 hours after issuing a waiv22 er under subsection (a); and 

23 (2) include in such notification an identification 

24 of the national interest justifying the use of the 

25 waiver. 


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1 SEC. 11. DEFINITIONS. 

2 In this Act: 

3 (1) APPROPRIATE CONGRESSIONAL COMMIT4 TEES.—The term ‘‘appropriate congressional com5 mittees’’ means— 

6 (A) the Committee on Foreign Affairs, the 

7 Committee on Financial Services, the Com8 mittee on Ways and Means, the Committee on 

9 Appropriations, and the Permanent Select Com10 mittee on Intelligence of the House of Rep11 resentatives; and 

12 (B) the Committee on Foreign Relations, 

13 the Committee on Banking, Housing, and 

14 Urban Affairs, the Committee on Finance, the 

15 Committee on Appropriations, and the Select 

16 Committee on Intelligence of the Senate. 

17 (2) COUNTRY OF CONCERN.—The term ‘‘coun18 try of concern’’— 

19 (A) means— 

20 (i) the Democratic People’s Republic 

21 of North Korea; 

22 (ii) the People’s Republic of China, in23 cluding the Hong Kong Special Adminis24 trative Region and the Macau Special Ad25 ministrative Region; 

26 (iii) the Russian Federation; and 


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1 (iv) the Islamic Republic of Iran; and 

2 (B) includes any other country the Presi3 dent determines necessary to ensure a country 

4 specified in clause (i), (ii), (iii), or (iv) of sub5 paragraph (A) is unable to circumvent the pro6 visions of this Act and the regulations issued 

7 pursuant to this Act. 

8 (3) COVERED ACTIVITY.— 

9 (A) IN GENERAL.—Subject to such regula10 tions as may be prescribed in accordance with 

11 section 7, and except as provided in subpara12 graph (B), the term ‘‘covered activity’’ means 

13 any activity engaged in by a United States per14 son that involves— 

15 (i) an acquisition by such United 

16 States person of an equity interest or con17 tingent equity interest, or monetary capital 

18 contribution, in a covered foreign entity, 

19 directly or indirectly, by contractual com20 mitment or otherwise, with the goal of gen21 erating income or gain; 

22 (ii) an arrangement for an interest 

23 held by such United States person in the 

24 short- or long-term debt obligations of a 

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1 ance rights that are characteristic of an 

2 equity investment, management, or other 

3 important rights; 

4 (iii) the establishment of a wholly 

5 owned subsidiary in a country of concern, 

6 such as a greenfield investment, for the 

7 purpose of production, design, testing, 

8 manufacturing, fabrication, or development 

9 related to one or more covered sectors; 

10 (iv) the establishment by such United 

11 States person of a joint venture in a coun12 try of concern or with a covered foreign en13 tity for the purpose of production, design, 

14 testing, manufacturing, fabrication, or re15 search, or other contractual or other com16 mitments involving a covered foreign entity 

17 to jointly research and develop new innova18 tion, including through the transfer of cap19 ital or intellectual property or other busi20 ness proprietary information; or 

21 (v) the acquisition by a United States 

22 person with a covered foreign entity of— 

23 (I) operational cooperation, such 

24 as through supply or support arrange25 ments; 


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1 (II) the right to board represen2 tation (as an observer, even if limited, 

3 or as a member) or an executive role 

4 (as may be defined through regula5 tion) in a covered foreign entity; 

6 (III) the ability to direct or influ7 ence such operational decisions as 

8 may be defined through such regula9 tions; 

10 (IV) formal governance represen11 tation in any operating affiliate, such 

12 as a portfolio company, of a covered 

13 foreign entity; or 

14 (V) a new relationship to share 

15 or provide business services, such as 

16 financial services, marketing services, 

17 maintenance, or assembly functions; 

18 or 

19 (vi) knowingly directing transactions 

20 by foreign persons that would constitute 

21 covered activity if engaged in by a United 

22 States person. 

23 (B) EXCEPTIONS.—The term ‘‘covered ac24 tivity’’ does not include— 


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1 (i) any transaction the value of which 

2 the President determines is de minimis, as 

3 defined in regulations prescribed in accord4 ance with section 6; 

5 (ii) any category of transactions that 

6 the President determines is in the national 

7 interest of the United States, as may be 

8 defined in regulations prescribed in accord9 ance with section 6; 

10 (iii) an investment in— 

11 (I) a publicly traded security (as 

12 such term is defined in section 

13 3(a)(10) of the Securities Exchange 

14 Act of 1934); or 

15 (II) an index fund, mutual fund, 

16 exchange-traded fund, or a similar in17 strument (including associated deriva18 tives) offered by an investment com19 pany (as such term is defined in sec20 tion 3(a)(1) of the Investment Com21 pany Act of 1940), or by a private in22 vestment fund; 

23 (III) a venture capital fund, pri24 vate equity fund, fund of funds, or 

25 other pooled investment funds, as the 


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1 limited partner, in each case in which 

2 the limited partner’s contribution is 

3 solely capital in a limited partnership 

4 structure and— 

5 (aa) the limited partner can6 not make managerial decisions, is 

7 not responsible for any debts be8 yond its investment, and does not 

9 have the ability (formally or in10 formally) to influence or partici11 pate in the fund’s or a covered 

12 foreign entity’s decision making 

13 or operations; and 

14 (bb) the investment is below 

15 a de minimis threshold to be de16 termined by the President; 

17 (iv) the acquisition of the equity or 

18 other interest owned or held by a covered 

19 foreign entity in an entity or assets located 

20 outside of a country of concern in which 

21 the United States person is acquiring all 

22 interests in the entity or assets held by 

23 covered foreign entity; 


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1 (v) an intracompany transfer of funds 

2 from a United States parent company to a 

3 subsidiary located in a country of concern; 

4 (vi) a transaction made pursuant to a 

5 binding, uncalled capital commitment en6 tered into before the date on which the 

7 regulations prescribed in accordance with 

8 section 6 take effect; or 

9 (vii) any ordinary or administrative 

10 business transaction as may be defined in 

11 such regulations. 

12 (4) COVERED FOREIGN ENTITY.—Subject to 

13 regulations prescribed in accordance with section 6, 

14 the term ‘‘covered foreign entity’’ means the fol15 lowing: 

16 (A) Any entity that is incorporated in, has 

17 a principal place of business in, or is organized 

18 under the laws of a country of concern. 

19 (B) Any entity the equity securities of 

20 which are traded in the ordinary course of busi21 ness on one or more exchanges in a country of 

22 concern. 

23 (C) Any agency or instrumentality of the 

24 government of a country of concern. 


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1 (D) Any other entity that is not a United 

2 States person and that meets such criteria as 

3 may be specified by the President in such regu4 lations prescribed in accordance with section 6. 

5 (5) COVERED SECTORS.—Subject to regulations 

6 prescribed in accordance with section 6, the term 

7 ‘‘covered sectors’’ includes sectors within the fol8 lowing areas: 

9 (A) Semiconductors and microelectronics. 

10 (B) Artificial intelligence. 

11 (C) Quantum information science and 

12 technology. 

13 (D) Hypersonics. 

14 (E) High-performance computing and 

15 supercomputing. 

16 (6) PARTY.—The term ‘‘party’’, with respect to 

17 an activity, has the meaning given that term in reg18 ulations prescribed in accordance with section 7. 

19 (7) UNITED STATES PERSON.—The term 

20 ‘‘United States person’’ means— 

21 (A) an individual who is a United States 

22 citizen or an alien lawfully admitted for perma23 nent residence to the United States; or 

24 (B) an entity organized under the laws of 

25 the United States or of any jurisdiction within 


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1 the United States, including any foreign branch 

2 of such an entity. 

Æ 


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