IIB 

115TH CONGRESS 

2D SESSION H. R. 5576 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 6, 2018 

Received; read twice and referred to the Committee on Foreign Relations 

AN ACT 

To address state-sponsored cyber activities against the 

United States, 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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Cyber Deterrence and 

3 Response Act of 2018’’. 

4 SEC. 2. FINDINGS. 

5 Congress finds the following: 

6 (1) On February 13, 2018, the Director of Na7 tional Intelligence stated in his testimony before the 

8 Senate Select Committee on Intelligence that ‘‘Rus9 sia, China, Iran, and North Korea will pose the 

10 greatest cyber threats to the United States during 

11 the next year’’ through the use of cyber operations 

12 as low-cost tools of statecraft, and assessed that 

13 these states would ‘‘work to use cyber operations to 

14 achieve strategic objectives unless they face clear re15 percussions for their cyber operations’’. 

16 (2) The 2017 Worldwide Threat Assessment of 

17 the United States Intelligence Community stated 

18 that ‘‘The potential for surprise in the cyber realm 

19 will increase in the next year and beyond as billions 

20 more digital devices are connected—with relatively 

21 little built-in security—and both nation states and 

22 malign actors become more emboldened and better 

23 equipped in the use of increasingly widespread cyber 

24 toolkits. The risk is growing that some adversaries 

25 will conduct cyber attacks—such as data deletion or 

26 localized and temporary disruptions of critical infraVerDate Sep 11 2014 01:30 Sep 07, 2018 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5576.RFS H5576

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1 structure—against the United States in a crisis 

2 short of war.’’. 

3 (3) On March 29, 2017, President Donald J. 

4 Trump deemed it necessary to continue the national 

5 emergency declared in Executive Order No. 13694 

6 as ‘‘Significant malicious cyber-enabled activities 

7 originating from, or directed by persons located, in 

8 whole or in substantial part, outside the United 

9 States, continue to pose an unusual and extraor10 dinary threat to the national security, foreign policy, 

11 and economy of the United States.’’. 

12 (4) On January 5, 2017, former Director of 

13 National Intelligence, James Clapper, former Under14 secretary of Defense for Intelligence, Marcel Lettre, 

15 and the Commander of the United States Cyber 

16 Command, Admiral Michael Rogers, submitted joint 

17 testimony to the Committee on Armed Services of 

18 the Senate that stated ‘‘As of late 2016 more than 

19 30 nations are developing offensive cyber attack ca20 pabilities’’ and that ‘‘Protecting critical infrastruc21 ture, such as crucial energy, financial, manufac22 turing, transportation, communication, and health 

23 systems, will become an increasingly complex na24 tional security challenge.’’. 


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1 (5) There is significant evidence that hackers 

2 affiliated with foreign governments have conducted 

3 cyber operations targeting companies and critical in4 frastructure sectors in the United States as the De5 partment of Justice and the Department of the 

6 Treasury have announced that— 

7 (A) on March 15, 2018, five Russian enti8 ties and 19 Russian individuals were designated 

9 under the Countering America’s Adversaries 

10 Through Sanctions Act, as well as pursuant to 

11 Executive Order No. 13694, for interference in 

12 the 2016 United States elections and other ma13 licious cyber-enabled activities; 

14 (B) on March 24, 2016, seven Iranians 

15 working for Iran’s Revolutionary Guard Corps16 affiliated entities were indicted for conducting 

17 distributed denial of service attacks against the 

18 financial sector in the United States from 2012 

19 to 2013; and 

20 (C) on May 19, 2014, five Chinese military 

21 hackers were charged for hacking United States 

22 companies in the nuclear power, metals, and 

23 solar products industries, and engaging in eco24 nomic espionage. 


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1 (6) In May 2017, North Korea released 

2 ‘‘WannaCry’’ pseudo-ransomware, which posed a sig3 nificant risk to the economy, national security, and 

4 the citizens of the United States and the world, as 

5 it resulted in the infection of over 300,000 computer 

6 systems in more than 150 countries, including in the 

7 healthcare sector of the United Kingdom, dem8 onstrating the global reach and cost of cyber-enabled 

9 malicious activity. 

10 (7) In June 2017, Russia carried out the most 

11 destructive cyber-enabled operation in history, re12 leasing the NotPetya malware that caused billions of 

13 dollars’ worth of damage within Ukraine and across 

14 Europe, Asia, and the Americas. 

15 (8) In May 2018, the Department of State, 

16 pursuant to section 3(b) of Executive Order No. 

17 13800, prepared recommendations to the President 

18 on Deterring Adversaries and Better Protecting the 

19 American People From Cyber Threats, which stated 

20 ‘‘With respect to activities below the threshold of the 

21 use of force, the United States should, working with 

22 likeminded partners when possible, adopt an ap23 proach of imposing swift, costly, and transparent 

24 consequences on foreign governments responsible for 


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1 significant malicious cyber activities aimed at harm2 ing U.S. national interests.’’. 

3 SEC. 3. ACTIONS TO ADDRESS STATE-SPONSORED CYBER 

4 ACTIVITIES AGAINST THE UNITED STATES. 

5 (a) DESIGNATION AS A CRITICAL CYBER THREAT

6 ACTOR.— 

7 (1) IN GENERAL.—The President, acting 

8 through the Secretary of State, and in coordination 

9 with other relevant Federal agency heads, shall des10 ignate as a critical cyber threat actor— 

11 (A) each foreign person and each agency 

12 or instrumentality of a foreign state that the 

13 President determines to be knowingly respon14 sible for or complicit in, or have engaged in, di15 rectly or indirectly, state-sponsored cyber activi16 ties that are reasonably likely to result in, or 

17 have contributed to, a significant threat to the 

18 national security, foreign policy, or economic 

19 health or financial stability of the United States 

20 and that have the purpose or effect of— 

21 (i) causing a significant disruption to 

22 the availability of a computer or network 

23 of computers; 

24 (ii) harming, or otherwise significantly 

25 compromising the provision of service by, a 


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1 computer or network of computers that 

2 support one or more entities in a critical 

3 infrastructure sector; 

4 (iii) significantly compromising the 

5 provision of services by one or more enti6 ties in a critical infrastructure sector; 

7 (iv) causing a significant misappro8 priation of funds or economic resources, 

9 trade secrets, personal identifiers, or finan10 cial information for commercial or competi11 tive advantage or private financial gain; 

12 (v) destabilizing the financial sector of 

13 the United States by tampering with, alter14 ing, or causing a misappropriation of data; 

15 or 

16 (vi) interfering with or undermining 

17 election processes or institutions by tam18 pering with, altering, or causing misappro19 priation of data; 

20 (B) each foreign person that the President 

21 has determined to have knowingly, significantly, 

22 and materially assisted, sponsored, or provided 

23 financial, material, or technological support for, 

24 or goods or services to or in support of, any ac25 tivities described in subparagraph (A) by a forVerDate Sep 11 2014 01:30 Sep 07, 2018 Jkt 079200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5576.RFS H5576

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1 eign person or agency or instrumentality of a 

2 foreign state designated as a critical cyber 

3 threat actor under subparagraph (A); and 

4 (C) each agency or instrumentality of a 

5 foreign state that the President has determined 

6 to have significantly and materially assisted, 

7 sponsored, or provided financial, material, or 

8 technological support for, or goods or services 

9 to or in support of, any activities described in 

10 subparagraph (A) by a foreign person or agency 

11 or instrumentality of a foreign state designated 

12 as a critical cyber threat actor under subpara13 graph (A). 

14 (2) PUBLICATION IN FEDERAL REGISTER.— 

15 (A) IN GENERAL.—The President shall— 

16 (i) publish in the Federal Register a 

17 list of each foreign person and each agency 

18 or instrumentality of a foreign state des19 ignated as a critical cyber threat actor 

20 under this subsection; and 

21 (ii) regularly update such list not later 

22 than 7 days after making any changes to 

23 such list, and publish in the Federal Reg24 ister such updates. 

25 (B) EXCEPTION.— 


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1 (i) IN GENERAL.—The President may 

2 withhold from publication in the Federal 

3 Register under subparagraph (A) the iden4 tification of any foreign person or agency 

5 or instrumentality of a foreign state des6 ignated as a critical cyber threat actor 

7 under this subsection if the President de8 termines that withholding such identifica9 tion— 

10 (I) in the national interests of 

11 the United States; or 

12 (II) is for an important law en13 forcement purpose. 

14 (ii) TRANSMISSION.—If the President 

15 exercises the authority under this subpara16 graph to withhold from publication in the 

17 Federal Register the identification of a for18 eign person or agency or instrumentality of 

19 a foreign state designated as a critical 

20 cyber threat actor under this subsection, 

21 the President shall transmit to the appro22 priate congressional committees in classi23 fied form a report containing any such 

24 identification, together with the reasons for 

25 such exercise. 


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1 (b) NON-TRAVEL-RELATED SANCTIONS.— 

2 (1) IN GENERAL.—The President shall impose 

3 one or more of the applicable sanctions described in 

4 paragraph (2) with respect to each foreign person 

5 and each agency or instrumentality of a foreign 

6 state designated as a critical cyber threat actor 

7 under subsection (a). 

8 (2) SANCTIONS DESCRIBED.—The sanctions de9 scribed in this paragraph are the following: 

10 (A) The President may provide for the 

11 withdrawal, limitation, or suspension of non-hu12 manitarian United States development assist13 ance under chapter 1 of part I of the Foreign 

14 Assistance Act of 1961. 

15 (B) The President may provide for the 

16 withdrawal, limitation, or suspension of United 

17 States security assistance under part II of the 

18 Foreign Assistance Act of 1961. 

19 (C) The President may direct the United 

20 States executive director to each international 

21 financial institution to use the voice and vote of 

22 the United States to oppose any loan from the 

23 international financial institution that would 

24 benefit the designated foreign person or the 


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1 designated agency or instrumentality of a for2 eign state. 

3 (D) The President may direct the Overseas 

4 Private Investment Corporation, or any other 

5 United States Government agency not to ap6 prove the issuance of any (or a specified num7 ber of) guarantees, insurance, extensions of 

8 credit, or participations in the extension of 

9 credit. 

10 (E) The President may, pursuant to such 

11 regulations or guidelines as the President may 

12 prescribe, prohibit any United States person 

13 from investing in or purchasing significant 

14 amounts of equity or debt instruments of the 

15 designated foreign person. 

16 (F) The President may, pursuant to proce17 dures the President shall prescribe, which shall 

18 include the opportunity to appeal actions under 

19 this subparagraph, prohibit any United States 

20 agency or instrumentality from procuring, or 

21 entering into any contract for the procurement 

22 of, any goods, technology, or services, or classes 

23 of goods, technology, or services, from the des24 ignated foreign person or the designated agency 

25 or instrumentality of a foreign state. 


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1 (G) The President may order the heads of 

2 the appropriate United States agencies to not 

3 issue any (or a specified number of) specific li4 censes, and to not grant any other specific au5 thority (or a specified number of authorities), to 

6 export any goods or technology to the des7 ignated foreign person or the designated agency 

8 or instrumentality of a foreign state under— 

9 (i) the Export Administration Act of 

10 1979 (as continued in effect pursuant the 

11 International Emergency Economic Powers 

12 Act); 

13 (ii) the Arms Export Control Act; 

14 (iii) the Atomic Energy Act of 1954; 

15 or 

16 (iv) any other statute that requires 

17 the prior review and approval of the 

18 United States Government as a condition 

19 for the export or re-export of goods or 

20 services. 

21 (H)(i) The President may exercise all of 

22 the powers granted to the President under the 

23 International Emergency Economic Powers Act 

24 (50 U.S.C. 1701 et seq.) (except that the re25 quirements of section 202 of such Act (50 


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1 U.S.C. 1701) shall not apply) to the extent nec2 essary to block and prohibit all transactions in 

3 property and interests in property of the des4 ignated foreign person if such property and in5 terests in property are in the United States, 

6 come within the United States, or are or come 

7 within the possession or control of a United 

8 States person. 

9 (ii) The penalties provided for in sub10 sections (b) and (c) of section 206 of the Inter11 national Emergency Economic Powers Act (50 

12 U.S.C. 1705) shall apply to a person that vio13 lates, attempts to violate, conspires to violate, 

14 or causes a violation of regulations prescribed 

15 under clause (i) to the same extent that such 

16 penalties apply to a person that commits an un17 lawful act described in subsection (a) of such 

18 section 206. 

19 (I) The President may, pursuant to such 

20 regulations as the President may prescribe, pro21 hibit any transfers of credit or payments be22 tween one or more financial institutions or by, 

23 through, or to any financial institution, to the 

24 extent that such transfers or payments are sub25 ject to the jurisdiction of the United States and 


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1 involve any interest of the designated foreign 

2 person. 

3 (c) TRAVEL-RELATED SANCTIONS.— 

4 (1) ALIENS INELIGIBLE FOR VISAS, ADMISSION, 

5 OR PAROLE.—An alien who is designated as a crit6 ical cyber threat actor under subsection (a) is— 

7 (A) inadmissible to the United States; 

8 (B) ineligible to receive a visa or other doc9 umentation to enter the United States; and 

10 (C) otherwise ineligible to be admitted or 

11 paroled into the United States or to receive any 

12 other benefit under the Immigration and Na13 tionality Act (8 U.S.C. 1101 et seq.). 

14 (2) CURRENT VISAS REVOKED.—The issuing 

15 consular officer, the Secretary of State, or the Sec16 retary of Homeland Security (or a designee of either 

17 such Secretaries) shall revoke any visa or other 

18 entry documentation issued to the foreign person 

19 designated as a critical cyber threat actor under sub20 section (a) regardless of when issued. A revocation 

21 under this clause shall take effect immediately and 

22 shall automatically cancel any other valid visa or 

23 entry documentation that is in the possession of 

24 such foreign person. 


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1 (d) ADDITIONAL SANCTIONS WITH RESPECT TO

2 FOREIGN STATES.— 

3 (1) IN GENERAL.—The President may impose 

4 any of the sanctions described in paragraph (2) with 

5 respect to the government of each foreign state that 

6 the President has determined aided, abetted, or di7 rected a foreign person or agency or instrumentality 

8 of a foreign state designated as a critical cyber 

9 threat actor under subsection (a). 

10 (2) SANCTIONS DESCRIBED.—The sanctions re11 ferred to in paragraph (1) are the following: 

12 (A) The President may provide for the 

13 withdrawal, limitation, or suspension of non-hu14 manitarian or non-trade-related assistance 

15 United States development assistance under 

16 chapter 1 of part I of the Foreign Assistance 

17 Act of 1961. 

18 (B) The President may provide for the 

19 withdrawal, limitation, or suspension of United 

20 States security assistance under part II of the 

21 Foreign Assistance Act of 1961. 

22 (C) The President may instruct the United 

23 States Executive Director to each appropriate 

24 international financial institution to oppose, and 

25 vote against the extension by such institution of 


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1 any loan or financial assistance to the govern2 ment of the foreign state. 

3 (D) No item on the United States Muni4 tions List (established pursuant to section 38 of 

5 the Arms Export Control Act (22 U.S.C. 

6 2778)) or the Commerce Control List set forth 

7 in Supplement No. 1 to part 774 of title 15, 

8 Code of Federal Regulations, may be exported 

9 to the government of the foreign state. 

10 (e) IMPLEMENTATION.—The President may exercise 

11 all authorities provided under sections 203 and 205 of the 

12 International Emergency Economic Powers Act (50 

13 U.S.C. 1702 and 1704) to carry out this section. 

14 (f) COORDINATION.—To the extent practicable— 

15 (1) actions taken by the President pursuant to 

16 this section should be coordinated with United 

17 States allies and partners; and 

18 (2) the Secretary of State should work with 

19 United States allies and partners, on a voluntary 

20 basis, to lead an international diplomatic initiative 

21 to— 

22 (A) deter critical cyber threat actors and 

23 state-sponsored cyber activities; and 


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1 (B) provide mutual support to such allies 

2 and partners participating in such initiative to 

3 respond to such state-sponsored cyber activities. 

4 (g) EXEMPTIONS, WAIVERS, AND REMOVALS OF

5 SANCTIONS AND DESIGNATIONS.— 

6 (1) MANDATORY EXEMPTIONS.—The following 

7 activities shall be exempt from sanctions under sub8 sections (b), (c), and (d): 

9 (A) Activities subject to the reporting re10 quirements of title V of the National Security 

11 Act of 1947 (50 U.S.C. 413 et seq.), or to any 

12 authorized intelligence activities of the United 

13 States. 

14 (B) Any transaction necessary to comply 

15 with United States obligations under the Agree16 ment between the United Nations and the 

17 United States of America regarding the Head18 quarters of the United Nations, signed June 

19 26, 1947, and entered into force on November 

20 21, 1947, or under the Vienna Convention on 

21 Consular Relations, signed April 24, 1963, and 

22 entered into force on March 19, 1967, or under 

23 other international obligations. 

24 (2) WAIVER.—The President may waive the im25 position of sanctions described in this section for a 


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1 period of not more than 1 year, and may renew such 

2 waiver for additional periods of not more than 1 

3 year, if the President transmits to the appropriate 

4 congressional committees a written determination 

5 that such waiver meets one or more of the following 

6 requirements: 

7 (A) Such waiver is in the national interests 

8 of the United States. 

9 (B) Such waiver will further the enforce10 ment of this Act or is for an important law en11 forcement purpose. 

12 (C) Such waiver is for an important hu13 manitarian purpose. 

14 (3) REMOVALS OF SANCTIONS AND DESIGNA15 TIONS.—The President may prescribe rules and reg16 ulations for the removal of sanctions under sub17 sections (b), (c), and (d) and the removal of designa18 tions under subsection (a) if the President deter19 mines that a foreign person, agency or instrumen20 tality of a foreign state, or government of a foreign 

21 state subject to such sanctions or such designations, 

22 as the case may be, has verifiably ceased its partici23 pation in any of the conduct with respect to which 

24 such foreign person, agency or instrumentality of a 

25 foreign state, or government of a foreign state was 


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1 subject to such sanctions or designation, as the case 

2 may be, under this section, and has given assurances 

3 that such foreign person, agency or instrumentality 

4 of a foreign state, or government of a foreign state, 

5 as the case may be, will no longer participate in such 

6 conduct. 

7 (4) EXCEPTION TO COMPLY WITH UNITED NA8 TIONS HEADQUARTERS AGREEMENT.—Sanctions 

9 under subsection (c) shall not apply to a foreign per10 son if admitting such foreign person into the United 

11 States is necessary to permit the United States to 

12 comply with the Agreement regarding the Head13 quarters of the United Nations, signed at Lake Suc14 cess June 26, 1947, and entered into force Novem15 ber 21, 1947, between the United Nations and the 

16 United States, or other applicable international obli17 gations. 

18 (h) RULE OF CONSTRUCTION.—Nothing in this sec19 tion may be construed to limit the authority of the Presi20 dent under the International Emergency Economic Powers 

21 Act (50 U.S.C. 1701 et seq.) or any other provision of 

22 law to impose sanctions to address critical cyber threat 

23 actors and malicious state-sponsored cyber activities. 

24 (i) DEFINITIONS.—In this section: 


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1 (1) ADMITTED; ALIEN.—The terms ‘‘admitted’’ 

2 and ‘‘alien’’ have the meanings given such terms in 

3 section 101 of the Immigration and Nationality Act 

4 (8 U.S.C. 1101). 

5 (2) APPROPRIATE CONGRESSIONAL COMMIT6 TEES.—The term ‘‘appropriate congressional com7 mittees’’ means— 

8 (A) the Committee on Foreign Affairs, the 

9 Committee on Financial Services, the Com10 mittee on the Judiciary, the Committee on 

11 Oversight and Government Reform, and the 

12 Committee on Homeland Security of the House 

13 of Representatives; and 

14 (B) the Committee on Foreign Relations, 

15 the Committee on Banking, Housing, and 

16 Urban Affairs, the Committee on the Judiciary, 

17 and the Committee on Homeland Security and 

18 Governmental Affairs of the Senate. 

19 (3) AGENCY OR INSTRUMENTALITY OF A FOR20 EIGN STATE.—The term ‘‘agency or instrumentality 

21 of a foreign state’’ has the meaning given such term 

22 in section 1603(b) of title 28, United States Code. 

23 (4) CRITICAL INFRASTRUCTURE SECTOR.—The 

24 term ‘‘critical infrastructure sector’’ means any of 

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1 fied in the Presidential Policy Directive entitled 

2 ‘‘Critical Infrastructure Security and Resilience’’, 

3 numbered 21, and dated February 12, 2013. 

4 (5) FOREIGN PERSON.—The term ‘‘foreign per5 son’’ means a person that is not a United States 

6 person. 

7 (6) FOREIGN STATE.—The term ‘‘foreign state’’ 

8 has the meaning given such term in section 1603(a) 

9 of title 28, United States Code. 

10 (7) 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 (8) MISAPPROPRIATION.—The term ‘‘misappro16 priation’’ means taking or obtaining by improper 

17 means, without permission or consent, or under false 

18 pretenses. 

19 (9) STATE-SPONSORED CYBER ACTIVITIES.— 

20 The term ‘‘state-sponsored cyber activities’’ means 

21 any malicious cyber-enabled activities that— 

22 (A) are carried out by a government of a 

23 foreign state or an agency or instrumentality of 

24 a foreign state; or 


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1 (B) are carried out by a foreign person 

2 that is aided, abetted, or directed by a govern3 ment of a foreign state or an agency or instru4 mentality of a foreign state. 

5 (10) UNITED STATES PERSON.—The term 

6 ‘‘United States person’’ means— 

7 (A) a United States citizen or an alien law8 fully admitted for permanent residence to the 

9 United States; or 

10 (B) an entity organized under the laws of 

11 the United States or of any jurisdiction within 

12 the United States, including a foreign branch of 

13 such an entity. 

Passed the House of Representatives September 5, 

2018. 

Attest: KAREN L. HAAS, 

Clerk. 


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