II 

Calendar No. 492 

115TH CONGRESS 

2D SESSION H. R. 5841 

IN THE SENATE OF THE UNITED STATES 

JUNE 27, 2018 

Received; read twice and placed on the calendar 

AN ACT 

To modernize and strengthen the Committee on Foreign 

Investment in the United States to more effectively 

guard against the risk to the national security of the 

United States posed by certain types of foreign investment, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Foreign Investment Risk Review Modernization Act of 

6 2018’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 


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TITLE I—FINDINGS AND SENSE OF CONGRESS 

Sec. 101. Findings and sense of Congress. 

TITLE II—DEFINITIONS 

Sec. 201. Definitions. 

TITLE III—IMPROVEMENTS TO THE OPERATIONS OF THE 

COMMITTEE ON FOREIGN INVESTMENT IN THE UNITED STATES 

Sec. 301. Inclusion of partnership and side agreements in notice. 

Sec. 302. Declarations relating to certain covered transactions. 

Sec. 303. Timing for reviews and investigations. 

Sec. 304. Submission of certifications to Congress. 

Sec. 305. Analysis by Director of National Intelligence. 

Sec. 306. Information sharing. 

Sec. 307. Action by the President. 

Sec. 308. Factors to be considered. 

Sec. 309. Mitigation and other actions by the Committee to address national 

security risks. 

Sec. 310. Certification of notices and information. 

Sec. 311. Additional regulations. 

TITLE IV—MODIFICATION OF ANNUAL REPORT 

Sec. 401. Modification of annual report. 

Sec. 402. Report on transactions with censorship implications. 

Sec. 403. Notice to Congress by the Committee. 

TITLE V—RESOURCES, SPECIAL HIRING AUTHORITY, AND 

OUTREACH 

Sec. 501. Centralization of certain Committee functions. 

Sec. 502. CFIUS resource needs. 

Sec. 503. Funding. 

TITLE VI—MISCELLANEOUS FIRRMA PROVISIONS 

Sec. 601. Conforming amendment. 

Sec. 602. Regulatory certainty for United States businesses. 

Sec. 603. Cooperation with United States allies and partners. 

TITLE VII—COMMON SENSE CREDIT UNION CAPITAL RELIEF 

Sec. 701. Delay in effective date. 

TITLE VIII—EXPORT CONTROL REFORM 

Sec. 801. Short title. 

Sec. 802. Definitions. 

Subtitle A—Authority and Administration of Controls 

Sec. 811. Short title. 

Sec. 812. Statement of policy. 

Sec. 813. Authority of the President. 

Sec. 814. Additional authorities. 

Sec. 815. Administration of export controls. 


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Sec. 816. Licensing. 

Sec. 817. Compliance assistance. 

Sec. 818. Requirements to identify and control emerging, foundational, and 

other critical technologies in export control regulations. 

Sec. 819. Review relating to countries subject to comprehensive United States 

arms embargo. 

Sec. 820. Penalties. 

Sec. 821. Enforcement. 

Sec. 822. Administrative procedure. 

Sec. 823. Review of interagency dispute resolution process. 

Sec. 824. Coordination with other agencies on commodity classification and removal of export controls. 

Sec. 825. Annual report to Congress. 

Sec. 826. Repeal. 

Sec. 827. Effect on other Acts. 

Sec. 828. Transition provisions. 

Subtitle B—Anti-Boycott Act of 2018 

Sec. 831. Short title. 

Sec. 832. Statement of policy. 

Sec. 833. Foreign boycotts. 

Sec. 834. Enforcement. 

Subtitle C—Sanctions Regarding Missile Proliferation and Chemical and 

Biological Weapons Proliferation 

Sec. 841. Missile proliferation control violations. 

Sec. 842. Chemical and biological weapons proliferation sanctions. 

Subtitle D—Administrative Authorities 

Sec. 851. Under Secretary of Commerce for Industry and Security. 

1 TITLE I—FINDINGS AND SENSE 

2 OF CONGRESS 

3 SEC. 101. FINDINGS AND SENSE OF CONGRESS. 

4 (a) FINDINGS.—The Congress finds the following: 

5 (1) According to a February 2016 report by the 

6 Department of Commerce’s International Trade Ad7 ministration, 12 million United States workers, 

8 equivalent to 8.5 percent of the labor force, have 

9 jobs resulting from foreign investment, including 3.5 

10 million jobs in the manufacturing sector alone. 


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1 (2) In 2016, new foreign direct investment in 

2 U.S. manufacturing totaled $129.4 billion. 

3 (3) The Department of Commerce’s Bureau of 

4 Economic Analysis concluded that in 2015, foreign5 owned affiliates in the United States— 

6 (A) Contributed $894.5 billion in value 

7 added to the U.S. economy; 

8 (B) exported goods valued at $352.8 bil9 lion, accounting for nearly a quarter of total 

10 U.S. goods exports; 

11 (C) undertook $56.7 billion in research 

12 and development; and 

13 (D) the seven largest investing countries, 

14 all of which are United States allies – the 

15 United Kingdom, Japan, Germany, France, 

16 Canada, Switzerland, and the Netherlands – ac17 counted for 72.1 percent of U.S. affiliate value 

18 added and over 80 percent of affiliates’ R&D 

19 expenditures. 

20 (4) According to the Government Accountability 

21 Office (GAO), from 2011 to 2016, the number of 

22 transactions reviewed by the Committee on Foreign 

23 Investment in the United States (CFIUS) grew by 

24 55 percent, while agency staff assigned to the re25 views increased by 11 percent. 


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1 (5) According to a February 2018 report 

2 (GAO-18-249), GAO noted: ‘‘Officials from Treas3 ury and other member agencies are aware of pres4 sures on their CFIUS staff given the current work5 load and have expressed concerns about possible 

6 workload increases.’’. GAO concluded: ‘‘Without at7 taining an understanding of the staffing levels need8 ed to address the current and future CFIUS work9 load, particularly if legislative changes to CFIUS’s 

10 authorities further expand its workload, CFIUS may 

11 be limited in its ability to fulfill its objectives and 

12 address threats to the national security of the 

13 United States.’’. 

14 (6) On March 30, 1954, Dwight David Eisen15 hower – five-star general, Supreme Allied Com16 mander, and 34th President of the United States – 

17 in his ‘‘Special Message to the Congress on Foreign 

18 Economic Policy’’, counseled: ‘‘Great mutual advan19 tages to buyer and seller, to producer and consumer, 

20 to investor and to the community where investment 

21 is made, accrue from high levels of trade and invest22 ment.’’. He continued: ‘‘The internal strength of the 

23 American economy has evolved from such a system 

24 of mutual advantage. In the press of other problems 

25 and in the haste to meet emergencies, this nation – 


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1 and many other nations of the free world – have all 

2 too often lost sight of this central fact.’’. President 

3 Eisenhower concluded: ‘‘If we fail in our trade pol4 icy, we may fail in all. Our domestic employment, 

5 our standard of living, our security, and the soli6 darity of the free world – all are involved.’’. 

7 (b) SENSE OF CONGRESS.—It is the sense of Con8 gress that— 

9 (1) foreign investment provides substantial ben10 efits to the United States, including the promotion 

11 of economic growth, productivity, innovation, com12 petitiveness, and job creation, thereby enhancing 

13 U.S. national security; 

14 (2) maintaining the commitment of the United 

15 States to an open investment policy encourages 

16 other countries to act similarly and helps expand 

17 foreign markets for U.S. businesses; 

18 (3) at the same time, national security risks re19 lated to foreign investment, particularly those ema20 nating from countries such as China and Russia, 

21 warrant an appropriate modernization of the proc22 esses and authorities of the Committee on Foreign 

23 Investment in the United States; 

24 (4) the Committee on Foreign Investment in 

25 the United States, as a complement to domestic and 


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1 multilateral export control regimes, plays a critical 

2 role in protecting the national security of the United 

3 States; 

4 (5) in order to maintain the Committee’s effec5 tiveness and guard against mission creep, CFIUS 

6 should remain narrowly focused on confronting risks 

7 related to national security; 

8 (6) it is essential that the member agencies of 

9 the Committee are adequately resourced and able to 

10 hire appropriately qualified individuals in a timely 

11 manner so that CFIUS may promptly complete 

12 transaction reviews, identify and respond to evolving 

13 national security risks, and enforce mitigation agree14 ments effectively; 

15 (7) the President should carry out international 

16 outreach to promote the benefits of foreign invest17 ment for global economic growth, while also assisting 

18 United States partners to address national security 

19 risks; and 

20 (8) it is the policy of the United States to en21 thusiastically welcome and support foreign invest22 ment, consistent with national security consider23 ations. 


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1 TITLE II—DEFINITIONS 

2 SEC. 201. DEFINITIONS. 

3 Section 721(a) of the Defense Production Act of 

4 1950 (50 U.S.C. 4565(a)) is amended— 

5 (1) by striking paragraphs (2), (3), and (4) and 

6 inserting the following: 

7 ‘‘(2) CONTROL.—The term ‘control’ means the 

8 power, direct or indirect, whether or not exercised, 

9 to determine, direct, or decide important matters af10 fecting an entity, subject to regulations prescribed 

11 by the Committee. 

12 ‘‘(3) COVERED TRANSACTION.— 

13 ‘‘(A) IN GENERAL.—The term ‘covered 

14 transaction’ means any transaction described in 

15 subparagraph (B) or (C) that is proposed, 

16 pending, or completed on or after the date of 

17 the enactment of the Foreign Investment Risk 

18 Review Modernization Act of 2018. 

19 ‘‘(B) TRANSACTIONS DESCRIBED.—A 

20 transaction described in this subparagraph is 

21 any of the following: 

22 ‘‘(i) Any merger, acquisition, takeover, 

23 or joint venture that is proposed or pend24 ing after August 23, 1988, by or with any 


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1 foreign person that could result in foreign 

2 control of any United States business. 

3 ‘‘(ii) The purchase or lease by, or con4 cession to, a foreign person of private or 

5 public real estate that— 

6 ‘‘(I) is located in the United 

7 States and— 

8 ‘‘(aa) is, or is in close prox9 imity to, a United States military 

10 installation or another facility or 

11 property of the United States 

12 Government that is sensitive for 

13 reasons relating to national secu14 rity and— 

15 ‘‘(AA) could reasonably 

16 provide the foreign person 

17 the ability to collect intel18 ligence on activities being 

19 conducted at such an instal20 lation, facility, or property; 

21 or 

22 ‘‘(BB) could otherwise 

23 expose national security ac24 tivities at such an installa25 tion, facility, or property to 


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1 the risk of foreign surveil2 lance; or 

3 ‘‘(bb) is itself, or is located 

4 at and could function as part of, 

5 an air or sea port; 

6 ‘‘(II) is not a single housing unit, 

7 as defined by the Bureau of the Cen8 sus; 

9 ‘‘(III) is not in an urbanized 

10 area, as set forth by the Bureau of 

11 the Census in its most recent census, 

12 except as otherwise prescribed by the 

13 Committee in regulations in consulta14 tion with the Secretary of Defense; 

15 and 

16 ‘‘(IV) meets such other criteria 

17 as the Committee prescribes by regu18 lation, except that such criteria may 

19 not expand the categories of real es20 tate to which this clause applies be21 yond the categories described in this 

22 clause. 

23 ‘‘(iii) Any change in the rights that a 

24 foreign person has with respect to a United 

25 States business in which the foreign person 


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1 has an investment, if that change could re2 sult in— 

3 ‘‘(I) foreign control of the United 

4 States business; or 

5 ‘‘(II) an investment described in 

6 subparagraph (C). 

7 ‘‘(iv) Any transaction or other device 

8 entered into or employed for the purpose of 

9 evading this section, subject to regulations 

10 prescribed by the Committee. 

11 ‘‘(C) SENSITIVE TRANSACTIONS INVOLVING

12 COUNTRIES OF SPECIAL CONCERN.— 

13 ‘‘(i) IN GENERAL.—A transaction de14 scribed in this subparagraph is any invest15 ment in an unaffiliated United States busi16 ness by a foreign person that— 

17 ‘‘(I) is— 

18 ‘‘(aa) a national or a govern19 ment of, or a foreign entity orga20 nized under the laws of, a coun21 try of special concern; or 

22 ‘‘(bb) a foreign entity— 

23 ‘‘(AA) over which con24 trol is exercised or exer25 cisable by a national or a 


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1 government of, or by a for2 eign entity organized under 

3 the laws of, a country of 

4 special concern; or 

5 ‘‘(BB) in which the 

6 government of a country of 

7 special concern has a sub8 stantial interest; and 

9 ‘‘(II) as a result of the trans10 action, could obtain–— 

11 ‘‘(aa) sensitive personal 

12 data, as defined by regulations 

13 prescribed by the Committee, of 

14 United States citizens, if such 

15 data may be exploited in a man16 ner that threatens national secu17 rity; 

18 ‘‘(bb) involvement, other 

19 than through voting of shares, in 

20 substantive decisionmaking of the 

21 United States business regard22 ing— 

23 ‘‘(AA) the use, develop24 ment, acquisition, or release 

25 of sensitive personal data of 


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1 United States citizens (as 

2 described in item (aa)); 

3 ‘‘(BB) the use, develop4 ment, acquisition, or release 

5 of critical technologies; or 

6 ‘‘(CC) the management 

7 or operations of United 

8 States critical infrastruc9 ture, as specified in regula10 tions prescribed by the Com11 mittee; or 

12 ‘‘(cc) material nonpublic 

13 technical information in the pos14 session of the United States busi15 ness. 

16 ‘‘(ii) COUNTRY OF SPECIAL CON17 CERN.—For the purposes of this subpara18 graph, the term ‘country of special con19 cern’ means— 

20 ‘‘(I) any foreign country that is 

21 subject to export restrictions pursuant 

22 to section 744.21 of title 15, Code of 

23 Federal Regulations; 


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1 ‘‘(II) any country determined by 

2 the Secretary of State to be a state 

3 sponsor of terrorism; and 

4 ‘‘(III) any country that— 

5 ‘‘(aa) is subject to a United 

6 States arms embargo, as speci7 fied in list D:5 of Country Group 

8 D in Supplement No. 1 to part 

9 740 of title 15, Code of Federal 

10 Regulations; and 

11 ‘‘(bb) is specified in regula12 tions prescribed by the Com13 mittee. 

14 ‘‘(iii) INVESTMENT DEFINED.—For 

15 the purposes of this subparagraph, the 

16 term ‘investment’ means the acquisition of 

17 an equity interest, including contingent eq18 uity interest, as further defined in regula19 tions prescribed by the Committee. 

20 ‘‘(iv) MATERIAL NONPUBLIC TECH21 NICAL INFORMATION DEFINED.— 

22 ‘‘(I) IN GENERAL.—For the pur23 poses of this subparagraph, and sub24 ject to regulations prescribed by the 

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1 public technical information’ means 

2 information that— 

3 ‘‘(aa) could create or reveal 

4 significant vulnerabilities in 

5 United States critical infrastruc6 ture, as specified in regulations 

7 prescribed by the Committee; or 

8 ‘‘(bb) could be essential to 

9 design, develop, test, produce, or 

10 manufacture critical technologies, 

11 as specified in regulations pre12 scribed by the Committee. 

13 ‘‘(II) EXEMPTION FOR FINAN14 CIAL INFORMATION.—Notwith15 standing subclause (I), for the pur16 poses of this subparagraph, the term 

17 ‘material nonpublic technical informa18 tion’ does not include financial infor19 mation regarding the performance of 

20 a United States business. 

21 ‘‘(v) REGULATIONS WITH RESPECT TO

22 CRITICAL INFRASTRUCTURE.—For pur23 poses of this subparagraph, regulations 

24 prescribed by the Committee regarding 

25 United States critical infrastructure shall 


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1 include criteria to limit application to crit2 ical infrastructure that is likely to be of 

3 importance to the national security of the 

4 United States. 

5 ‘‘(vi) UNAFFILIATED UNITED STATES

6 BUSINESS DEFINED.—For the purposes of 

7 this subparagraph, with respect to an in8 vestment described under clause (i), and as 

9 further defined in regulations prescribed by 

10 the Committee, the term ‘unaffiliated 

11 United States business’ means a United 

12 States business that is not subject to the 

13 same ultimate ownership of the foreign 

14 person undertaking the investment. 

15 ‘‘(vii) EXEMPTION.—The President 

16 may exempt a country from the definition 

17 of a country of special concern under 

18 clause (ii), for up to one year at a time, 

19 upon reporting to the Committees on Fi20 nancial Services and Foreign Affairs of the 

21 House of Representatives and the Commit22 tees on Banking, Housing, and Urban Af23 fairs and Foreign Relations of the Senate 

24 that the exemption is important to the na25 tional interest of the United States, with a 


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1 detailed explanation of the reasons there2 for. 

3 ‘‘(D) EXCEPTION FOR AIR CARRIERS.— 

4 Subparagraph (B)(iii) shall not apply to a 

5 change in the rights of a person with respect to 

6 an investment involving an air carrier, as de7 fined in section 40102(a)(2) of title 49, United 

8 States Code, that holds a certificate issued 

9 under section 41102 of that title. 

10 ‘‘(E) TRANSFERS OF CERTAIN ASSETS

11 PURSUANT TO BANKRUPTCY PROCEEDINGS OR

12 OTHER DEFAULTS.—The Committee shall pre13 scribe regulations to clarify that the term ‘cov14 ered transaction’ includes any transaction de15 scribed in subparagraph (B) or (C) that arises 

16 pursuant to a bankruptcy proceeding or other 

17 form of default on debt. 

18 ‘‘(F) DEFINITION OF CLOSE PROXIMITY.— 

19 In prescribing regulations with respect to sub20 paragraph (B)(ii)(I)(aa), the Committee shall 

21 ensure that the term ‘close proximity’ only ap22 plies to a distance or distances within which the 

23 purchase, lease, or concession of real estate 

24 could pose a national security risk in connection 

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1 other facility or property of the United States 

2 Government. 

3 ‘‘(4) FOREIGN GOVERNMENT-CONTROLLED

4 TRANSACTION.—The term ‘foreign government-con5 trolled transaction’ means any covered transaction 

6 that could result in control of a United States busi7 ness by— 

8 ‘‘(A) a foreign government; 

9 ‘‘(B) a person controlled by or acting on 

10 behalf of a foreign government; or 

11 ‘‘(C) a foreign company or entity of a 

12 country of special concern (as defined under 

13 paragraph (3)(C)(ii)) domiciled or having its 

14 principal place of business in a county of special 

15 concern that is a non-market economy, except 

16 to the extent the Committee promulgates regu17 lations exempting any such company, entity, or 

18 country from this presumption.’’; 

19 (2) by amending paragraph (7) to read as fol20 lows: 

21 ‘‘(7) CRITICAL TECHNOLOGIES.—The term 

22 ‘critical technologies’ means— 

23 ‘‘(A) defense articles or defense services 

24 covered by the United States Munitions List 

25 (USML), which is set forth in the International 


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1 Traffic in Arms Regulations (ITAR) (22 CFR 

2 parts 120–130); 

3 ‘‘(B) those items specified on the Com4 merce Control List (CCL) set forth in Supple5 ment No. 1 to part 774 of the Export Adminis6 tration Regulations (EAR) (15 CFR parts 730– 

7 774) that are controlled pursuant to multilat8 eral regimes (i.e. for reasons of national secu9 rity, chemical and biological weapons prolifera10 tion, nuclear nonproliferation, or missile tech11 nology), as well as those that are controlled for 

12 reasons of regional stability or surreptitious lis13 tening; 

14 ‘‘(C) specially designed and prepared nu15 clear equipment, parts and components, mate16 rials, software, and technology specified in the 

17 Assistance to Foreign Atomic Energy Activities 

18 regulations (10 CFR part 810), and nuclear fa19 cilities, equipment, and material specified in the 

20 Export and Import of Nuclear Equipment and 

21 Material regulations (10 CFR part 110); 

22 ‘‘(D) select agents and toxins specified in 

23 the Select Agents and Toxins regulations (7 

24 CFR part 331, 9 CFR part 121, and 42 CFR 

25 part 73); and 


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1 ‘‘(E) emerging, foundational, or other crit2 ical technologies that are controlled pursuant to 

3 section 818 of the Foreign Investment Risk Re4 view Modernization Act of 2018.’’; and 

5 (3) by adding at the end the following: 

6 ‘‘(9) FOREIGN PERSON.—The term ‘foreign per7 son’ means— 

8 ‘‘(A) any foreign national, foreign govern9 ment, or foreign entity; or 

10 ‘‘(B) any entity over which control is exer11 cised or exercisable by a foreign national, for12 eign government, or foreign entity. 

13 ‘‘(10) SUBSTANTIAL INTEREST.—The term 

14 ‘substantial interest’ has the meaning given to such 

15 term in regulations prescribed by the Committee, 

16 but does not include a voting interest of less than 

17 ten percent or ownership interests held or acquired 

18 solely for the purpose of passive investment. 

19 ‘‘(11) UNITED STATES BUSINESS.—The term 

20 ‘United States business’ means any entity, irrespec21 tive of the nationality of the persons that control it, 

22 engaged in interstate commerce in the United 

23 States, but only to the extent of its activities in 

24 interstate commerce.’’. 


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1 TITLE III—IMPROVEMENTS TO 

2 THE OPERATIONS OF THE 

3 COMMITTEE ON FOREIGN IN4 VESTMENT IN THE UNITED 

5 STATES 

6 SEC. 301. INCLUSION OF PARTNERSHIP AND SIDE AGREE7 MENTS IN NOTICE. 

8 Section 721(b)(1)(C) of the Defense Production Act 

9 of 1950 (50 U.S.C. 4565(b)(1)(C)) is amended by adding 

10 at the end the following: 

11 ‘‘(iv) INCLUSION OF PARTNERSHIP

12 AND SIDE AGREEMENTS.—Subject to regu13 lations prescribed by the Committee, the 

14 Committee may require a written notice 

15 submitted under clause (i) by a party to a 

16 covered transaction to include a copy of 

17 any partnership agreements, integration 

18 agreements, or other side agreements relat19 ing to the transaction.’’. 

20 SEC. 302. DECLARATIONS RELATING TO CERTAIN COVERED 

21 TRANSACTIONS. 

22 (a) IN GENERAL.—Section 721(b)(1)(C) of the De23 fense Production Act of 1950 (50 U.S.C. 4565(b)(1)(C)), 

24 as amended by section 301, is further amended by adding 

25 at the end the following: 


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1 ‘‘(v) DECLARATIONS WITH RESPECT

2 TO CERTAIN COVERED TRANSACTIONS.— 

3 ‘‘(I) VOLUNTARY DECLARA4 TIONS.—For the purpose of expe5 diting the review of certain covered 

6 transactions that the Committee de7 termines are likely to pose limited 

8 risk, the Committee may prescribe 

9 regulations to permit parties to the 

10 transaction to submit a declaration 

11 with basic information regarding the 

12 transaction, unless the parties submit 

13 a written notice under clause (i). 

14 ‘‘(II) MANDATORY DECLARA15 TIONS.— 

16 ‘‘(aa) IN GENERAL.—The 

17 Committee shall prescribe regula18 tions to require the parties to a 

19 covered transaction to submit a 

20 declaration described in sub21 clause (I) with respect to the 

22 transaction if the transaction in23 volves an investment that results 

24 in the release of critical tech25 nologies by an unaffiliated 


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1 United States business (as de2 fined under subsection 

3 (a)(3)(C)(vi)) to a foreign person 

4 in which a foreign government 

5 has, directly or indirectly, a sub6 stantial interest. 

7 ‘‘(bb) SUBMISSION OF WRIT8 TEN NOTICE AS AN ALTER9 NATIVE.—Parties to a covered 

10 transaction for which a declara11 tion is required under this clause 

12 may instead elect to submit a 

13 written notice under clause (i). 

14 ‘‘(cc) TIMING OF SUBMIS15 SION.—With respect to the regu16 lations described under subclause 

17 (I), the Committee may not re18 quire a declaration to be sub19 mitted more than 45 days in ad20 vance of the completion of the 

21 transaction. 

22 ‘‘(III) PENALTIES.—The Com23 mittee may impose a penalty pursuant 

24 to subsection (h)(3)(A) with respect to 


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1 a party that fails to comply with this 

2 clause. 

3 ‘‘(IV) COMMITTEE RESPONSE TO

4 DECLARATION.— 

5 ‘‘(aa) IN GENERAL.—Upon 

6 receiving a declaration under this 

7 clause with respect to a trans8 action, the Committee may, at its 

9 discretion— 

10 ‘‘(AA) request that the 

11 parties to the transaction 

12 file a written notice under 

13 clause (i), provided that the 

14 Committee includes an ex15 planation of the reasons for 

16 the request; 

17 ‘‘(BB) inform the par18 ties to the transaction that 

19 the Committee is not able to 

20 complete action under this 

21 section with respect to the 

22 transaction on the basis of 

23 the declaration and that the 

24 parties may file a written 

25 notice under clause (i) to 


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1 seek written notification 

2 from the Committee that the 

3 Committee has completed all 

4 action under this section 

5 with respect to the trans6 action; 

7 ‘‘(CC) initiate a unilat8 eral review of the trans9 action under subparagraph 

10 (D); or 

11 ‘‘(DD) notify the par12 ties in writing that the Com13 mittee has completed all ac14 tion under this section with 

15 respect to the transaction. 

16 ‘‘(bb) TIMING.—The Com17 mittee shall take action under 

18 item (aa) within 30 days of re19 ceiving a declaration under this 

20 clause. 

21 ‘‘(cc) REFILING OF DEC22 LARATION.—The Committee may 

23 not request or recommend that a 

24 declaration be withdrawn and 

25 refiled, except to permit parties 


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1 to a transaction to correct mate2 rial errors or omissions. 

3 ‘‘(V) REGULATIONS.—In pre4 scribing regulations establishing re5 quirements for declarations submitted 

6 under this clause, the Committee shall 

7 ensure that such declarations are sub8 mitted as abbreviated notifications 

9 that do not generally exceed 5 pages 

10 in length. 

11 ‘‘(VI) INVESTMENT DEFINED.— 

12 For the purposes of this clause, the 

13 term ‘investment’ means the acquisi14 tion of an equity interest, including 

15 contingent equity interest, as further 

16 defined in regulations prescribed by 

17 the Committee.’’. 

18 (b) STIPULATIONS REGARDING TRANSACTIONS.— 

19 Section 721(b)(1)(C) of the Defense Production Act of 

20 1950 (50 U.S.C. 4565(b)(1)(C)), as amended by this sec21 tion, is further amended by adding at the end the fol22 lowing: 

23 ‘‘(vi) STIPULATIONS REGARDING

24 TRANSACTIONS.— 


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1 ‘‘(I) IN GENERAL.—In a written 

2 notice submitted under clause (i) or a 

3 declaration submitted under clause (v) 

4 with respect to a transaction, a party 

5 to the transaction may— 

6 ‘‘(aa) stipulate that the 

7 transaction is a covered trans8 action; and 

9 ‘‘(bb) if the party stipulates 

10 that the transaction is a covered 

11 transaction under item (aa), stip12 ulate that the transaction is a 

13 foreign government-controlled 

14 transaction. 

15 ‘‘(II) BASIS FOR STIPULATION.— 

16 A written notice submitted under 

17 clause (i) or a declaration submitted 

18 under clause (v) that includes a stipu19 lation under subclause (I) shall in20 clude a description of the basis for the 

21 stipulation.’’. 

22 SEC. 303. TIMING FOR REVIEWS AND INVESTIGATIONS. 

23 Section 721(b) of the Defense Production Act of 

24 1950 (50 U.S.C. 4565(b)) is amended— 


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1 (1) in paragraph (1)(E), by striking ‘‘30-day’’ 

2 and inserting ‘‘45-day’’; 

3 (2) in paragraph (2), by striking subparagraph 

4 (C) and inserting the following: 

5 ‘‘(C) TIMING.— 

6 ‘‘(i) IN GENERAL.—Except as pro7 vided in clause (ii), any investigation under 

8 subparagraph (A) shall be completed be9 fore the end of the 45-day period begin10 ning on the date on which the investigation 

11 commenced. 

12 ‘‘(ii) EXTENSION FOR EXTRAOR13 DINARY CIRCUMSTANCES.— 

14 ‘‘(I) IN GENERAL.—In extraor15 dinary circumstances (as defined by 

16 the Committee in regulations), the 

17 chairperson may, at the request of the 

18 head of the lead agency, extend an in19 vestigation under subparagraph (A) 

20 for not more than one 15-day period. 

21 ‘‘(II) NONDELEGATION.—The 

22 authority of the chairperson and the 

23 head of the lead agency referred to in 

24 subclause (I) may not be delegated to 

25 any person other than the Deputy 


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1 Secretary of the Treasury or the dep2 uty head (or equivalent thereof) of the 

3 lead agency, as the case may be. 

4 ‘‘(III) NOTIFICATION TO PAR5 TIES.—If the Committee extends the 

6 deadline under subclause (I) with re7 spect to a covered transaction, the 

8 Committee shall notify the parties to 

9 the transaction of the extension.’’; and 

10 (3) by adding at the end the following: 

11 ‘‘(8) TOLLING OF DEADLINES DURING LAPSE IN

12 APPROPRIATIONS.—Any deadline or time limitation 

13 under this subsection shall be tolled during a lapse 

14 in appropriations.’’. 

15 SEC. 304. SUBMISSION OF CERTIFICATIONS TO CONGRESS. 

16 Section 721(b)(3)(C) of the Defense Production Act 

17 of 1950 (50 U.S.C. 4565(b)(3)(C)) is amended— 

18 (1) in clause (i), by amending subclause (II) to 

19 read as follows: 

20 ‘‘(II) a certification that all rel21 evant national security factors, includ22 ing factors enumerated in subsection 

23 (f), have received full consideration.’’; 

24 and 

25 (2) by adding at the end the following: 


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1 ‘‘(v) AUTHORITY TO CONSOLIDATE

2 DOCUMENTS.—Instead of transmitting a 

3 separate certified notice or certified report 

4 under subparagraph (A) or (B) with re5 spect to each covered transaction, the 

6 Committee may, on a monthly basis, trans7 mit such notices and reports in a consoli8 dated document to the Members of Con9 gress specified in clause (iii).’’. 

10 SEC. 305. ANALYSIS BY DIRECTOR OF NATIONAL INTEL11 LIGENCE. 

12 Section 721(b)(4) of the Defense Production Act of 

13 1950 (50 U.S.C. 4565(b)(4)) is amended— 

14 (1) by striking subparagraph (A) and inserting 

15 the following: 

16 ‘‘(A) ANALYSIS REQUIRED.— 

17 ‘‘(i) IN GENERAL.—The Director of 

18 National Intelligence shall expeditiously 

19 carry out a thorough analysis of any threat 

20 to the national security of the United 

21 States posed by any covered transaction, 

22 which shall include the identification of 

23 any recognized gaps in the collection of in24 telligence relevant to the analysis. 


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1 ‘‘(ii) VIEWS OF INTELLIGENCE AGEN2 CIES.—The Director shall seek and incor3 porate into the analysis required by clause 

4 (i) the views of all affected or appropriate 

5 intelligence agencies with respect to the 

6 transaction. 

7 ‘‘(iii) UPDATES.—At the request of 

8 the lead agency, the Director shall update 

9 the analysis conducted under clause (i) 

10 with respect to a covered transaction with 

11 respect to which an agreement was entered 

12 into under subsection (l)(3)(A). 

13 ‘‘(iv) INDEPENDENCE AND OBJEC14 TIVITY.—The Committee shall ensure that 

15 its processes under this section preserve 

16 the ability of the Director to conduct an 

17 analysis under clause (i) that is inde18 pendent, objective, and consistent with all 

19 applicable directives, policies, and analytic 

20 tradecraft standards of the intelligence 

21 community.’’. 

22 (2) by redesignating subparagraphs (B), (C), 

23 and (D) as subparagraphs (C), (D), and (E), respec24 tively; 


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1 (3) by inserting after subparagraph (A) the fol2 lowing: 

3 ‘‘(B) BASIC THREAT INFORMATION.— 

4 ‘‘(i) IN GENERAL.—The Director of 

5 National Intelligence may provide the 

6 Committee with basic information regard7 ing any threat to the national security of 

8 the United States posed by a covered 

9 transaction described in clause (ii) instead 

10 of conducting the analysis required by sub11 paragraph (A). 

12 ‘‘(ii) COVERED TRANSACTION DE13 SCRIBED.—A covered transaction is de14 scribed in this clause if— 

15 ‘‘(I) the transaction is described 

16 in subsection (a)(3)(B)(ii); 

17 ‘‘(II) the Director of National In18 telligence has completed an analysis 

19 pursuant to subparagraph (A) involv20 ing each foreign person that is a party 

21 to the transaction during the 12 

22 months preceding the review or inves23 tigation of the transaction under this 

24 section; or 


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1 ‘‘(III) the transaction otherwise 

2 meets criteria agreed upon by the 

3 Committee and the Director of Na4 tional Intelligence for purposes of this 

5 subparagraph.’’; 

6 (4) in subparagraph (C), as so redesignated, by 

7 striking ‘‘20 days’’ and inserting ‘‘30 days’’; and 

8 (5) by adding at the end the following: 

9 ‘‘(F) ASSESSMENT OF OPERATIONAL IM10 PACT.—The Director may provide to the Com11 mittee an assessment, separate from the anal12 yses under subparagraphs (A) and (B), of any 

13 operational impact of a covered transaction on 

14 the intelligence community and a description of 

15 any actions that have been or will be taken to 

16 mitigate any such impact. 

17 ‘‘(G) SUBMISSION TO CONGRESS.—The 

18 Committee shall include the analysis required 

19 by subparagraph (A) with respect to a covered 

20 transaction in the report required under sub21 section (m)(1), subject to the requirements of 

22 subsection (m)(5).’’. 

23 SEC. 306. INFORMATION SHARING. 

24 Section 721(c) of the Defense Production Act of 1950 

25 (50 U.S.C. 4565(c)) is amended— 


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1 (1) by striking ‘‘Any information’’ and inserting 

2 the following: 

3 ‘‘(1) IN GENERAL.—Any information’’; and 

4 (2) by adding at the end the following: 

5 ‘‘(2) EXCEPTION.—Paragraph (1) shall not pro6 hibit the disclosure of information or documentary 

7 material that the party filing such information or 

8 material consented to be disclosed to third parties.’’. 

9 SEC. 307. ACTION BY THE PRESIDENT. 

10 (a) IN GENERAL.—Section 721(d)(2) of the Defense 

11 Production Act of 1950 (50 U.S.C. 4565(d)(2)) is amend12 ed by striking ‘‘not later than 15 days’’ and all that fol13 lows and inserting the following: ‘‘with respect to a cov14 ered transaction not later than 15 days after the earlier 

15 of— 

16 ‘‘(A) the date on which the investigation of 

17 the transaction under subsection (b) is com18 pleted; or 

19 ‘‘(B) the date on which the Committee oth20 erwise refers the transaction to the President 

21 under subsection (l)(4).’’. 

22 (b) CIVIL PENALTIES.—Section 721(h)(3)(A) of the 

23 Defense Production Act of 1950 (50 U.S.C. 

24 4565(h)(3)(A)) is amended by striking ‘‘including any 

25 mitigation’’ and all that follows through ‘‘subsection (l)’’ 


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1 and inserting ‘‘including any mitigation agreement entered 

2 into, conditions imposed, or order issued pursuant to this 

3 section’’. 

4 SEC. 308. FACTORS TO BE CONSIDERED. 

5 Section 721(f) of the Defense Production Act of 1950 

6 (50 U.S.C. 4565(f)) is amended— 

7 (1) in paragraph (3), by striking the comma at 

8 the end and inserting the following: ‘‘, including the 

9 availability of human resources, products, tech10 nology, materials, and other supplies and services;’’; 

11 (2) in paragraph (4), by striking ‘‘proposed or 

12 pending’’; 

13 (3) by striking paragraph (5); 

14 (4) by redesignating paragraphs (6), (7), (8), 

15 (9), (10), and (11) as paragraphs (5), (6), (7), (8), 

16 (9), and (16), respectively; 

17 (5) in paragraph (9), as so redesignated, by 

18 striking ‘‘and’’ at the end; 

19 (6) by inserting after paragraph (9), as so re20 designated, the following: 

21 ‘‘(10) the degree to which the covered trans22 action is likely to threaten the ability of the United 

23 States Government to acquire or maintain the equip24 ment and systems that are necessary for defense, in25 telligence, or other national security functions; 


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1 ‘‘(11) the potential national security-related ef2 fects of the cumulative control of any one type of 

3 critical infrastructure, energy asset, material, or 

4 critical technology by a foreign person; 

5 ‘‘(12) whether any foreign person that would 

6 acquire control of a United States business as a re7 sult of the covered transaction has a history of— 

8 ‘‘(A) complying with United States laws 

9 and regulations and prior adherence, if applica10 ble, to any agreement or condition, as described 

11 under (l)(1)(A); and 

12 ‘‘(B) adhering to contracts or other agree13 ments with entities of the United States Gov14 ernment; 

15 ‘‘(13) the extent to which the covered trans16 action is likely to release, either directly or indi17 rectly, sensitive personal data of United States citi18 zens to a foreign person that may exploit that infor19 mation in a manner that threatens national security; 

20 ‘‘(14) whether the covered transaction is likely 

21 to exacerbate cybersecurity vulnerabilities or is likely 

22 to result in a foreign government gaining a signifi23 cant new capability to engage in malicious cyber-en24 abled activities against the United States, including 


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1 such activities designed to affect the outcome of any 

2 election for Federal office; 

3 ‘‘(15) whether the covered transaction is likely 

4 to expose any information regarding sensitive na5 tional security matters or sensitive procedures or op6 erations of a Federal law enforcement agency with 

7 national security responsibilities to a foreign person 

8 not authorized to receive that information; and’’; 

9 and 

10 (7) by adding at the end the following flush-left 

11 text: 

12 ‘‘For purposes of this subsection, the phrase ‘the avail13 ability of human resources’ shall be construed to consider 

14 potential losses of such availability resulting from reduc15 tions in the employment of United States persons whose 

16 knowledge or skills are critical to national security, includ17 ing the continued production in the United States of items 

18 that are likely to be acquired by the Department of De19 fense or other Federal departments or agencies for the ad20 vancement of the national security of the United States.’’. 

21 SEC. 309. MITIGATION AND OTHER ACTIONS BY THE COM22 MITTEE TO ADDRESS NATIONAL SECURITY 

23 RISKS. 

24 Section 721(l) of the Defense Production Act of 1950 

25 (50 U.S.C. 4565(l)) is amended— 


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1 (1) in paragraph (1)— 

2 (A) in subparagraph (A)— 

3 (i) in the heading, by striking ‘‘IN

4 GENERAL’’ and inserting ‘‘AGREEMENTS

5 AND CONDITIONS’’; 

6 (ii) by striking ‘‘The Committee’’ and 

7 inserting the following: 

8 ‘‘(i) IN GENERAL.—The Committee’’; 

9 (iii) by adding at the end the fol10 lowing: 

11 ‘‘(ii) ABANDONMENT OF TRANS12 ACTIONS.—If a party to a covered trans13 action has voluntarily chosen to abandon 

14 the transaction, the Committee or lead 

15 agency, as the case may be, may negotiate, 

16 enter into or impose, and enforce any 

17 agreement or condition with any party to 

18 the covered transaction for purposes of ef19 fectuating such abandonment and miti20 gating any threat to the national security 

21 of the United States that arises as a result 

22 of the covered transaction. 

23 ‘‘(iii) AGREEMENTS AND CONDITIONS

24 RELATING TO COMPLETED TRANS25 ACTIONS.—The Committee or lead agency, 


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1 as the case may be, may negotiate, enter 

2 into or impose, and enforce any agreement 

3 or condition with any party to a completed 

4 covered transaction in order to mitigate 

5 any interim threat to the national security 

6 of the United States that may arise as a 

7 result of the covered transaction until such 

8 time that the Committee has completed ac9 tion pursuant to subsection (b) or the 

10 President has taken action pursuant to 

11 subsection (d) with respect to the trans12 action.’’; 

13 (B) by amending subparagraph (B) to read 

14 as follows: 

15 ‘‘(B) TREATMENT OF OUTDATED AGREE16 MENTS OR CONDITIONS.—The chairperson and 

17 the head of any applicable lead agency shall pe18 riodically review the appropriateness of an 

19 agreement or condition described under sub20 paragraph (A) and terminate, phase out, or 

21 otherwise amend any agreement or condition if 

22 a threat no longer requires mitigation through 

23 the agreement or condition.’’; and 

24 (C) by adding at the end the following: 


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1 ‘‘(C) LIMITATIONS.—An agreement may 

2 not be entered into or condition imposed under 

3 subparagraph (A) with respect to a covered 

4 transaction unless the Committee determines 

5 that the agreement or condition resolves the na6 tional security concerns posed by the trans7 action, taking into consideration whether the 

8 agreement or condition is reasonably calculated 

9 to— 

10 ‘‘(i) be effective; 

11 ‘‘(ii) allow for compliance with the 

12 terms of the agreement or condition in an 

13 appropriately verifiable way; and 

14 ‘‘(iii) enable effective monitoring of 

15 compliance with and enforcement of the 

16 terms of the agreement or condition. 

17 ‘‘(D) JURISDICTION.—The provisions of 

18 section 706(b) shall apply to any mitigation 

19 agreement entered into or condition imposed 

20 under subparagraph (A).’’; and 

21 (2) by adding at the end the following: 

22 ‘‘(4) REFERRAL TO PRESIDENT.—The Com23 mittee may, at any time during the review or inves24 tigation of a covered transaction under subsection 

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1 spect to the transaction and refer the transaction to 

2 the President for action pursuant to subsection (d). 

3 ‘‘(5) RISK-BASED ANALYSIS REQUIRED.— 

4 ‘‘(A) IN GENERAL.—Any determination of 

5 the Committee to refer a covered transaction to 

6 the President under paragraph (4), to suspend 

7 a covered transaction under paragraph (6), or 

8 to negotiate, enter into, impose, or enforce any 

9 agreement or condition under paragraph (1)(A) 

10 with respect to a covered transaction, shall be 

11 based on a risk-based analysis, conducted by 

12 the Committee, of the effects on the national 

13 security of the United States of the covered 

14 transaction, which shall include— 

15 ‘‘(i) an assessment of the threat, 

16 vulnerabilities, and consequences to na17 tional security resulting from the trans18 action, as these terms are defined or clari19 fied in guidance and regulations issued by 

20 the Committee; and 

21 ‘‘(ii) an identification of each relevant 

22 factor described in subsection (f) that the 

23 transaction may substantially implicate. 

24 ‘‘(B) COMPLIANCE PLANS.— 


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1 ‘‘(i) IN GENERAL.—In the case of a 

2 covered transaction with respect to which 

3 an agreement or condition is entered into 

4 under paragraph (1)(A), the Committee or 

5 lead agency, as the case may be, shall for6 mulate, adhere to, and keep updated a 

7 plan for monitoring compliance with the 

8 agreement or condition. 

9 ‘‘(ii) ELEMENTS.—Each plan required 

10 by clause (i) with respect to an agreement 

11 or condition entered into under paragraph 

12 (1)(A) shall include an explanation of— 

13 ‘‘(I) which member of the Com14 mittee will have primary responsibility 

15 for monitoring compliance with the 

16 agreement or condition; 

17 ‘‘(II) how compliance with the 

18 agreement or condition will be mon19 itored; 

20 ‘‘(III) how frequently compliance 

21 reviews will be conducted; 

22 ‘‘(IV) whether an independent 

23 entity will be utilized under subpara24 graph (D) to conduct compliance re25 views; and 


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1 ‘‘(V) what actions will be taken if 

2 the parties fail to cooperate regarding 

3 monitoring compliance with the agree4 ment or condition. 

5 ‘‘(C) EFFECT OF LACK OF COMPLIANCE.— 

6 If, at any time after a mitigation agreement or 

7 condition is entered into or imposed under 

8 paragraph (1)(A), the Committee or lead agen9 cy, as the case may be, determines that a party 

10 or parties to the agreement or condition are not 

11 in compliance with the terms of the agreement 

12 or condition, the Committee or lead agency 

13 may, in addition to the authority of the Com14 mittee to impose penalties pursuant to sub15 section (h)(3)(A) and to unilaterally initiate a 

16 review of any covered transaction under sub17 section (b)(1)(D)(iii)(I)— 

18 ‘‘(i) negotiate a plan of action for the 

19 party or parties to remediate the lack of 

20 compliance, with failure to abide by the 

21 plan or otherwise remediate the lack of 

22 compliance serving as the basis for the 

23 Committee to find a material breach of the 

24 agreement or condition; 


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1 ‘‘(ii) require that the party or parties 

2 submit any covered transaction initiated 

3 after the date of the determination of non4 compliance and before the date that is 5 

5 years after the date of the determination 

6 to the Committee for review under sub7 section (b); or 

8 ‘‘(iii) seek injunctive relief. 

9 ‘‘(D) USE OF INDEPENDENT ENTITIES TO

10 MONITOR COMPLIANCE.—If the parties to an 

11 agreement or condition entered into under para12 graph (1)(A) enter into a contract with an inde13 pendent entity from outside the United States 

14 Government for the purpose of monitoring com15 pliance with the agreement or condition, the 

16 Committee shall take such action as is nec17 essary to prevent any significant conflict of in18 terest from arising with respect to the entity 

19 and the parties to the transaction. 

20 ‘‘(E) SUCCESSORS AND ASSIGNS.—Any 

21 agreement or condition entered or imposed 

22 under paragraph (1)(A) shall be considered 

23 binding on all successors and assigns, unless 

24 and until the agreement or condition terminates 

25 on its own terms or is otherwise terminated by 


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1 the Committee in the Committee’s sole discre2 tion. 

3 ‘‘(F) ADDITIONAL COMPLIANCE MEAS4 URES.—Subject to subparagraphs (A) through 

5 (D), the Committee shall develop and agree 

6 upon methods for evaluating compliance with 

7 any agreement entered into or condition im8 posed with respect to a covered transaction that 

9 will allow the Committee to adequately ensure 

10 compliance without unnecessarily diverting 

11 Committee resources from assessing any new 

12 covered transaction for which a written notice 

13 under clause (i) of subsection (b)(1)(C) has 

14 been filed or for which a declaration has been 

15 submitted under clause (v) of subsection 

16 (b)(1)(C), and if necessary, reaching a mitiga17 tion agreement with or imposing a condition on 

18 a party to such covered transaction or any cov19 ered transaction for which a review has been re20 opened for any reason. 

21 ‘‘(6) SUSPENSION OF TRANSACTIONS.—The 

22 Committee, acting through the chairperson, may 

23 suspend a proposed or pending covered transaction 

24 that may pose a risk to the national security of the 

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1 action is under review or investigation under sub2 section (b).’’. 

3 SEC. 310. CERTIFICATION OF NOTICES AND INFORMATION. 

4 Section 721(n) of the Defense Production Act of 

5 1950 (50 U.S.C. 4565(n)) is amended— 

6 (1) by redesignating paragraphs (1) and (2) as 

7 subparagraphs (A) and (B), respectively, and by 

8 moving such subparagraphs, as so redesignated, 2 

9 ems to the right; 

10 (2) by striking ‘‘Each notice’’ and inserting the 

11 following: 

12 ‘‘(1) IN GENERAL.—Each notice’’; and 

13 (3) by adding at the end the following: 

14 ‘‘(2) EFFECT OF FAILURE TO SUBMIT.—The 

15 Committee may not complete a review under this 

16 section of a covered transaction and may recommend 

17 to the President that the President suspend or pro18 hibit the transaction or require divestment under 

19 subsection (d) if the Committee determines that a 

20 party to the transaction has— 

21 ‘‘(A) failed to submit a statement required 

22 by paragraph (1); or 

23 ‘‘(B) included false or misleading informa24 tion in a notice or information described in 


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1 paragraph (1) or omitted material information 

2 from such notice or information. 

3 ‘‘(3) APPLICABILITY OF LAW ON FRAUD AND

4 FALSE STATEMENTS.—The Committee shall pre5 scribe regulations expressly providing for the appli6 cation of section 1001 of title 18, United States 

7 Code, to all information provided to the Committee 

8 under this section by any party to a covered trans9 action.’’. 

10 SEC. 311. ADDITIONAL REGULATIONS. 

11 Section 721(h)(3) of the Defense Production Act of 

12 1950 (50 U.S.C. 4565(h)(3)) is amended— 

13 (1) in subparagraph (B)(ii), by striking ‘‘and’’ 

14 at the end; 

15 (2) in subparagraph (C), by striking the period 

16 at the end and inserting ‘‘; and’’; and 

17 (3) by adding at the end the following: 

18 ‘‘(D) provide that in connection with any 

19 national security review or investigation of a 

20 covered transaction conducted by the Com21 mittee, the Committee should— 

22 ‘‘(i) consider the factors described in 

23 paragraphs (2) and (3) of subsection (f); 

24 and 


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1 ‘‘(ii) as appropriate, require parties to 

2 provide the information necessary to con3 sider such factors.’’. 

4 TITLE IV—MODIFICATION OF 

5 ANNUAL REPORT 

6 SEC. 401. MODIFICATION OF ANNUAL REPORT. 

7 Section 721(m) of the Defense Production Act of 

8 1950 (50 U.S.C. 4565(m)) is amended— 

9 (1) in paragraph (2), by amending subpara10 graph (A) to read as follows: 

11 ‘‘(A) A list of all notices filed and all re12 views or investigations of covered transactions 

13 completed during the period, with— 

14 ‘‘(i) a description of the outcome of 

15 each review or investigation, including 

16 whether an agreement was entered into or 

17 condition was imposed under subsection 

18 (l)(3)(A) with respect to the transaction 

19 being reviewed or investigated, and wheth20 er the President took any action under this 

21 section with respect to that transaction; 

22 ‘‘(ii) the nature of the business activi23 ties or products of the United States busi24 ness with which the transaction was en25 tered into or intended to be entered into; 


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1 ‘‘(iii) information about any with2 drawal from the process; and 

3 ‘‘(iv) the mean and median number of 

4 days required to complete reviews and in5 vestigations during the period.’’; 

6 (2) in paragraph (3)— 

7 (A) by striking ‘‘CRITICAL TECHNOLOGIES’’ 

8 and all that follows through ‘‘In order to as9 sist’’ and inserting ‘‘CRITICAL TECH10 NOLOGIES.—In order to assist’’; 

11 (B) by striking subparagraph (B); and 

12 (C) by redesignating clauses (i) and (ii) as 

13 subparagraphs (A) and (B), respectively, and 

14 by moving such subparagraphs, as so redesig15 nated, 2 ems to the left; and 

16 (3) by adding at the end the following: 

17 ‘‘(4) ADDITIONAL CONTENTS OF REPORT.— 

18 Each annual report required under paragraph (1) 

19 shall contain the following additional information: 

20 ‘‘(A) Statistics on compliance reviews con21 ducted and actions taken by the Committee 

22 under subsection (l)(6), including subparagraph 

23 (D) of that subsection (l)(6), during that period 

24 and a description of any actions taken by the 

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1 lateral review pursuant to subsection 

2 (b)(1)(D)(iii)(I). 

3 ‘‘(B) Cumulative and trend information on 

4 the number of declarations filed under sub5 section (b)(1)(C)(v), the actions taken by the 

6 Committee in response to declarations, the busi7 ness sectors involved in the declarations which 

8 have been made, the countries involved in such 

9 declarations, and the mean and median number 

10 of days required to respond to such declara11 tions, as described in subsection 

12 (b)(1)(C)(v)(IV), during that period . 

13 ‘‘(C) The number of new hires made since 

14 the preceding report through the authorities de15 scribed under subsection (q), along with sum16 mary statistics, position titles, and associated 

17 pay grades for such hires and a summary of 

18 such hires’ responsibilities in administering this 

19 section. 

20 ‘‘(5) CLASSIFICATION; AVAILABILITY OF RE21 PORT.— 

22 ‘‘(A) CLASSIFICATION.—All appropriate 

23 portions of the annual report required by para24 graph (1) may be classified. 


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1 ‘‘(B) PUBLIC AVAILABILITY OF UNCLASSI2 FIED VERSION.—An unclassified version of the 

3 report required by paragraph (1), as appro4 priate and consistent with safeguarding na5 tional security and privacy, shall be made avail6 able to the public. Information regarding trade 

7 secrets or business confidential information may 

8 be included in the classified version and may 

9 not be made available to the public in the un10 classified version. 

11 ‘‘(C) EXCEPTIONS TO FREEDOM OF INFOR12 MATION ACT.—The exceptions to subsection (a) 

13 of section 552 of title 5, United States Code, 

14 provided for under subsection (b) of that sec15 tion shall apply with respect to the report re16 quired by paragraph (1).’’. 

17 SEC. 402. REPORT ON TRANSACTIONS WITH CENSORSHIP 

18 IMPLICATIONS. 

19 Not later than one year from the date of enactment 

20 of this Act, the Committee on Foreign Investment in the 

21 United States shall issue a report to the Congress, appro22 priate portions of which may be classified, on investments 

23 by foreign persons into the entertainment and information 

24 sectors of the United States, which shall include analysis 

25 of the extent to which such investments have resulted in 


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1 or could result in direct or indirect censorship, including 

2 self-censorship, within the United States. 

3 SEC. 403. NOTICE TO CONGRESS BY THE COMMITTEE. 

4 Section 721 of the Defense Production Act of 1950 

5 (50 U.S.C. 4565), as amended by section 503, is further 

6 amended by adding at the end the following: 

7 ‘‘(v) NOTICE TO CONGRESS BY THE COMMITTEE.— 

8 If the Committee recommends that the President suspend 

9 or prohibit a covered transaction because such transaction 

10 threatens to impair the national security of the United 

11 States, the Committee shall, in the classified version of 

12 the annual report described under subsection (m), notify 

13 Congress of each such recommendation and, upon request, 

14 provide a classified briefing on the recommendation.’’. 

15 TITLE V—RESOURCES, SPECIAL 

16 HIRING AUTHORITY, AND 

17 OUTREACH 

18 SEC. 501. CENTRALIZATION OF CERTAIN COMMITTEE 

19 FUNCTIONS. 

20 Section 721 of the Defense Production Act of 1950 

21 (50 U.S.C. 4565) is amended by adding at the end the 

22 following: 

23 ‘‘(o) CENTRALIZATION OF CERTAIN COMMITTEE

24 FUNCTIONS.— 


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1 ‘‘(1) IN GENERAL.—The chairperson, in con2 sultation with the Committee, may centralize certain 

3 functions of the Committee within the Department 

4 of the Treasury for the purpose of enhancing inter5 agency coordination and collaboration in carrying 

6 out the functions of the Committee under this sec7 tion. 

8 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

9 this subsection shall be construed as limiting the au10 thority of any department or agency represented on 

11 the Committee to represent its own interests before 

12 the Committee.’’. 

13 SEC. 502. CFIUS RESOURCE NEEDS. 

14 (a) UNIFIED BUDGET REQUEST.—Section 721 of the 

15 Defense Production Act of 1950 (50 U.S.C. 4565), as 

16 amended by section 501, is further amended by adding 

17 at the end the following: 

18 ‘‘(p) UNIFIED BUDGET REQUEST; ANNUAL SPEND19 ING PLAN.— 

20 ‘‘(1) UNIFIED BUDGET REQUEST.— 

21 ‘‘(A) IN GENERAL.—The President may in22 clude, in the budget of the Department of the 

23 Treasury for a fiscal year (as submitted to Con24 gress with the budget of the President under 

25 section 1105(a) of title 31, United States 


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1 Code), a unified request for funding of all oper2 ations under this section conducted by all of the 

3 departments and agencies represented on the 

4 Committee. 

5 ‘‘(B) FORM OF BUDGET REQUEST.—A uni6 fied request under subparagraph (A) shall be 

7 detailed and include the amounts and staffing 

8 levels requested for each department or agency 

9 represented on the Committee to carry out the 

10 functions of that department or agency under 

11 this section. 

12 ‘‘(2) ANNUAL SPENDING PLAN.—Not later than 

13 90 days following the date of enactment of this sub14 section, and annually thereafter, the chairperson of 

15 the Committee shall transmit to the Committees on 

16 Appropriations and Financial Services of the House 

17 of Representatives and the Committees on Appro18 priations and Banking, Housing, and Urban Affairs 

19 of the Senate a detailed spending plan to expedi20 tiously meet the requirements of subsections (b), (l), 

21 and (m), including estimated expenditures and staff22 ing levels required by operations of the Committee 

23 for not less than the following fiscal year at each of 

24 the Committee’s member agencies. 


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1 ‘‘(3) WAIVER.—The chairperson may waive the 

2 reporting requirement under paragraph (2) with re3 spect to a fiscal year for which a unified budget re4 quest described under paragraph (1) has been sub5 mitted.’’. 

6 (b) SPECIAL HIRING AUTHORITY.—Section 721 of 

7 the Defense Production Act of 1950 (50 U.S.C. 4565), 

8 as amended by subsection (a), is further amended by add9 ing at the end the following: 

10 ‘‘(q) SPECIAL HIRING AUTHORITY.—The heads of 

11 the departments and agencies represented on the Com12 mittee may appoint, without regard to the provisions of 

13 sections 3309 through 3318 of title 5, United States Code, 

14 candidates directly to positions in the competitive service 

15 (as defined in section 2102 of that title) in their respective 

16 departments and agencies to administer this section.’’. 

17 (c) TESTIMONY REQUIRED.—Section 721 of the De18 fense Production Act of 1950 (50 U.S.C. 4565), as 

19 amended by subsection (d), is further amended by adding 

20 at the end the following: 

21 ‘‘(r) TESTIMONY.— 

22 ‘‘(1) IN GENERAL.—After submitting the uni23 fied budget request described under subsection 

24 (p)(1), or the spending plan described under sub25 section (p)(2), as the case may be, but not later 


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1 than March 31 of each year, the chairperson, or the 

2 chairperson’s designee, shall appear before the Com3 mittee on Financial Services of the House of Rep4 resentatives and present testimony on— 

5 ‘‘(A) anticipated resources necessary for 

6 operations of the Committee in the following 

7 fiscal year at each of the Committee’s member 

8 agencies; 

9 ‘‘(B) the adequacy of appropriations for 

10 the Committee in the current and the previous 

11 fiscal year to— 

12 ‘‘(i) ensure that thorough reviews and 

13 investigations are completed as expedi14 tiously as possible; 

15 ‘‘(ii) monitor and enforce mitigation 

16 agreements; and 

17 ‘‘(iii) identify covered transactions for 

18 which a notice under clause (i) of sub19 section (b)(1)(C) or a declaration under 

20 clause (v) of subsection (b)(1)(C) was not 

21 submitted to the Committee; 

22 ‘‘(C) management efforts to strengthen the 

23 ability of the Committee to meet the require24 ments of this section; and 


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1 ‘‘(D) activities of the Committee under2 taken in order to— 

3 ‘‘(i) educate the business community, 

4 with a particular focus on the technology 

5 sector and other sectors of importance to 

6 national security, on the goals and oper7 ations of the Committee; 

8 ‘‘(ii) disseminate to the governments 

9 of United States allies best practices of the 

10 Committee that— 

11 ‘‘(I) strengthen national security 

12 reviews of relevant investment trans13 actions; and 

14 ‘‘(II) expedite such reviews when 

15 appropriate; and 

16 ‘‘(iii) promote openness to foreign in17 vestment, consistent with national security 

18 considerations. 

19 ‘‘(2) SUNSET.—This subsection shall have no 

20 force or effect on the date that is 7 years following 

21 the date of enactment of the Foreign Investment 

22 Risk Review Modernization Act of 2018.’’. 


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1 SEC. 503. FUNDING. 

2 Section 721 of the Defense Production Act of 1950 

3 (50 U.S.C. 4565), as amended by section 603, is further 

4 amended by adding at the end the following: 

5 ‘‘(u) FUNDING.— 

6 ‘‘(1) ESTABLISHMENT OF FUND.—There is es7 tablished in the Treasury of the United States a 

8 fund, to be known as the ‘Committee on Foreign In9 vestment in the United States Fund’ (in this sub10 section referred to as the ‘Fund’), to be adminis11 tered by the chairperson. 

12 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS FOR

13 THE COMMITTEE.—There are authorized to be ap14 propriated to the Fund for each of fiscal years 2019 

15 through 2023 $20,000,000 to perform the functions 

16 of the Committee. 

17 ‘‘(3) FILING FEES.— 

18 ‘‘(A) IN GENERAL.—The Committee may 

19 assess and collect a fee in an amount deter20 mined by the Committee in regulations, without 

21 regard to section 9701 of title 31, United 

22 States Code, and subject to subparagraph (B), 

23 with respect to each covered transaction for 

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1 laration is submitted to the Committee under 

2 subsection (b)(1)(C)(v). 

3 ‘‘(B) DETERMINATION OF AMOUNT OF

4 FEE.— 

5 ‘‘(i) IN GENERAL.—The amount of 

6 the fee to be assessed under subparagraph 

7 (A) with respect to a covered transaction— 

8 ‘‘(I) may not exceed an amount 

9 equal to the lesser of— 

10 ‘‘(aa) 1 percent of the value 

11 of the transaction; or 

12 ‘‘(bb) $300,000, as such 

13 amount is adjusted annually for 

14 inflation pursuant to regulations 

15 prescribed by the Committee; and 

16 ‘‘(II) shall be determined by the 

17 Committee after taking into consider18 ation— 

19 ‘‘(aa) the effect of the fee on 

20 small business concerns (as de21 fined in section 3 of the Small 

22 Business Act (15 U.S.C. 632)); 

23 ‘‘(bb) the expenses of the 

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1 ducting activities under this sec2 tion; 

3 ‘‘(cc) the effect of the fee on 

4 foreign investment; 

5 ‘‘(dd) the unified budget re6 quest or annual spending plan, as 

7 appropriate, described in section 

8 502 of the Foreign Investment 

9 Risk Review Modernization Act 

10 of 2018; and 

11 ‘‘(ee) such other matters as 

12 the Committee considers appro13 priate. 

14 ‘‘(ii) UPDATES.—The Committee shall 

15 periodically reconsider and adjust the 

16 amount of the fee to be assessed under 

17 subparagraph (A) with respect to a covered 

18 transaction to ensure that the amount of 

19 the fee remains appropriate. 

20 ‘‘(C) DEPOSIT AND AVAILABILITY OF

21 FEES.—Notwithstanding section 3302 of title 

22 31, United States Code, fees collected under 

23 subparagraph (A) shall— 


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1 ‘‘(i) be deposited into the Fund for 

2 use in carrying out activities under this 

3 section; 

4 ‘‘(ii) to the extent and in the amounts 

5 provided in advance in appropriations Acts, 

6 be available to the chairperson; 

7 ‘‘(iii) remain available until expended; 

8 and 

9 ‘‘(iv) be in addition to any appropria10 tions made available to the members of the 

11 Committee. 

12 ‘‘(4) TRANSFER OF FUNDS.—To the extent pro13 vided in advance in appropriations Acts, the chair14 person may transfer any amounts in the Fund to 

15 any other department or agency represented on the 

16 Committee for the purpose of addressing emerging 

17 needs in carrying out activities under this section. 

18 Amounts so transferred shall be in addition to any 

19 other amounts available to that department or agen20 cy for that purpose.’’. 

21 TITLE VI—MISCELLANEOUS 

22 FIRRMA PROVISIONS 

23 SEC. 601. CONFORMING AMENDMENT. 

24 Section 721(d)(4)(A) of the Defense Production Act 

25 of 1950 (50 U.S.C. 4565(d)(4)(A)) is amended by striking 


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1 ‘‘the foreign interest exercising control’’ and inserting ‘‘a 

2 foreign person that would acquire an interest in a United 

3 States business or its assets as a result of the covered 

4 transaction’’. 

5 SEC. 602. REGULATORY CERTAINTY FOR UNITED STATES 

6 BUSINESSES. 

7 Section 721 of the Defense Production Act of 1950 

8 (50 U.S.C. 4565), as amended by section 502, is further 

9 amended by adding at the end the following: 

10 ‘‘(s) REGULATORY CERTAINTY FOR UNITED STATES

11 BUSINESSES.— 

12 ‘‘(1) IN GENERAL.—With respect to mitigating 

13 a national security risk that results from a foreign 

14 person’s investment in, or joint venture with, a 

15 United States business, a member agency of the 

16 Committee may not prescribe or implement regula17 tions to require divestment by, or of, the United 

18 States business, unless— 

19 ‘‘(A) the regulations are prescribed under 

20 this section or pursuant to authorities of the 

21 President under the International Emergency 

22 Economic Powers Act; or 

23 ‘‘(B) the President reports to Congress in 

24 writing that the regulations— 


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1 ‘‘(i) are, wherever applicable, con2 sistent with regulations prescribed under 

3 this section, including any such regulations 

4 pertaining to— 

5 ‘‘(I) foreign control or influence 

6 over a United States business; 

7 ‘‘(II) the identification of emerg8 ing, foundational, or other critical 

9 technologies; and 

10 ‘‘(III) confidentiality require11 ments with respect to information and 

12 documentary material regarding 

13 United States businesses; and 

14 ‘‘(ii) in the case of regulations pre15 scribed or finalized following the effective 

16 date of this subsection, were prescribed in 

17 consultation with the chairperson of the 

18 Committee and with the head of any mem19 ber agency determined by the President to 

20 be affected by the regulations. 

21 ‘‘(2) EXCEPTION FOR PROCUREMENT AUTHOR22 ITY.—Paragraph (1) shall not apply to an action by 

23 a member agency if the head of the member agency 

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1 ment purposes of the agency or for matters related 

2 to the management of the agency’s supply chain.’’. 

3 SEC. 603. COOPERATION WITH UNITED STATES ALLIES AND 

4 PARTNERS. 

5 Section 721 of the Defense Production Act of 1950 

6 (50 U.S.C. 4565), as amended by section 602, is further 

7 amended by adding at the end the following: 

8 ‘‘(t) COOPERATION WITH UNITED STATES ALLIES

9 AND PARTNERS.— 

10 ‘‘(1) IN GENERAL.—The chairperson, in con11 sultation with other members of the Committee, is 

12 authorized to lead a formal process for the regular 

13 exchange of information with governments of coun14 tries that are allies or partners of the United States, 

15 in the discretion of the chairperson, to protect the 

16 national security of the United States and those 

17 countries. 

18 ‘‘(2) REQUIREMENTS.—The process described 

19 under paragraph (1) shall, in the discretion of the 

20 chairperson— 

21 ‘‘(A) be designed to facilitate the harmoni22 zation of action with respect to trends in invest23 ment and technology that could pose risks to 

24 the national security of the United States and 


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1 countries that are allies or partners of the 

2 United States; 

3 ‘‘(B) provide for the sharing of information 

4 with respect to specific technologies and entities 

5 acquiring such technologies as appropriate to 

6 ensure national security; and 

7 ‘‘(C) include consultations and meetings 

8 with representatives of the governments of such 

9 countries on a recurring basis.’’. 

10 TITLE VII—COMMON SENSE 

11 CREDIT UNION CAPITAL RELIEF 

12 SEC. 701. DELAY IN EFFECTIVE DATE. 

13 Notwithstanding any effective date set forth in the 

14 rule issued by the National Credit Union Administration 

15 titled ‘‘Risk-Based Capital’’ (published at 80 Fed. Reg. 

16 66626 (October 29, 2015)), such final rule shall take ef17 fect on January 1, 2021. 

18 TITLE VIII—EXPORT CONTROL 

19 REFORM 

20 SEC. 801. SHORT TITLE. 

21 This title may be cited as the ‘‘Export Control Re22 form Act of 2018’’. 

23 SEC. 802. DEFINITIONS. 

24 In this title: 


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1 (1) CONTROLLED.—The term ‘‘controlled’’ re2 fers to an item subject to the jurisdiction of the 

3 United States under subtitle A. 

4 (2) DUAL-USE.—The term ‘‘dual-use’’, with re5 spect to an item, means the item has civilian appli6 cations and military, terrorism, weapons of mass de7 struction, or law-enforcement-related applications. 

8 (3) EXPORT.—The term ‘‘export’’, with respect 

9 to an item subject to controls under subtitle A, in10 cludes— 

11 (A) the shipment or transmission of the 

12 item out of the United States, including the 

13 sending or taking of the item out of the United 

14 States, in any manner; and 

15 (B) the release or transfer of technology or 

16 source code relating to the item to a foreign 

17 person in the United States. 

18 (4) EXPORT ADMINISTRATION REGULATIONS.— 

19 The term ‘‘Export Administration Regulations’’ 

20 means— 

21 (A) the Export Administration Regulations 

22 as promulgated, maintained, and amended 

23 under the authority of the International Emer24 gency Economic Powers Act and codified, as of 

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1 chapter C of chapter VII of title 15, Code of 

2 Federal Regulations; or 

3 (B) regulations that are promulgated, 

4 maintained, and amended under the authority 

5 of subtitle A on or after the date of the enact6 ment of this Act. 

7 (5) FOREIGN PERSON.—The term ‘‘foreign per8 son’’ means— 

9 (A) any natural person who is not a lawful 

10 permanent resident of the United States, citizen 

11 of the United States, or any other protected in12 dividual (as such term is defined in section 

13 274B(a)(3) of the Immigration and Nationality 

14 Act (8 U.S.C. 1324b(a)(3)); 

15 (B) any corporation, business association, 

16 partnership, trust, society or any other entity or 

17 group that is not incorporated in the United 

18 States or organized to do business in the 

19 United States, as well as international organiza20 tions, foreign governments and any agency or 

21 subdivision of a foreign government (e.g., diplo22 matic mission). 

23 (6) ITEM.—The term ‘‘item’’ means a com24 modity, software, or technology. 

25 (7) PERSON.—The term ‘‘person’’ means— 


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1 (A) a natural person; 

2 (B) a corporation, business association, 

3 partnership, society, trust, financial institution, 

4 insurer, underwriter, guarantor, and any other 

5 business organization, any other nongovern6 mental entity, organization, or group, or any 

7 government or agency thereof; and 

8 (C) any successor to any entity described 

9 in subparagraph (B). 

10 (8) REEXPORT.—The term ‘‘reexport’’, with re11 spect to an item subject to controls under subtitle A, 

12 includes— 

13 (A) the shipment or transmission of the 

14 item from a foreign country to another foreign 

15 country, including the sending or taking of the 

16 item from the foreign country to the other for17 eign country, in any manner; and 

18 (B) the release or transfer of technology or 

19 source code relating to the item to a foreign 

20 person outside the United States. 

21 (9) SECRETARY.—Except as otherwise provided, 

22 the term ‘‘Secretary’’ means the Secretary of Com23 merce. 

24 (10) TECHNOLOGY.—The term ‘‘technology’’ 

25 includes foundational information and information 


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1 and know-how necessary for the development (at all 

2 stages prior to serial production), production, use, 

3 operation, installation, maintenance, repair, overhaul 

4 or refurbishing of an item. 

5 (11) TRANSFER.—The term ‘‘transfer’’, with 

6 respect to an item subject to controls under title I, 

7 means a change in the end-use or end user of the 

8 item within the same foreign country. 

9 (12) UNITED STATES.—The term ‘‘United 

10 States’’ means the several States, the District of Co11 lumbia, the Commonwealth of Puerto Rico, the Com12 monwealth of the Northern Mariana Islands, Amer13 ican Samoa, Guam, the United States Virgin Is14 lands, and any other territory or possession of the 

15 United States. 

16 (13) UNITED STATES PERSON.—The term 

17 ‘‘United States person’’ means— 

18 (A) for purposes of subtitles A and C— 

19 (i) any individual who is a citizen or 

20 national of the United States or who is an 

21 individual described in subparagraph (B) 

22 of section 274B(a)(3) of the Immigration 

23 and Nationality Act (8 U.S.C. 

24 1324b(a)(3)); 


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1 (ii) a corporation or other legal entity 

2 which is organized under the laws of the 

3 United States, any State or territory there4 of, or the District of Columbia; and 

5 (iii) any person in the United States; 

6 and 

7 (B) for purposes of subtitle B, any United 

8 States resident or national (other than an indi9 vidual resident outside the United States and 

10 employed by other than a United States per11 son), any domestic concern (including any per12 manent domestic establishment of any foreign 

13 concern) and any foreign subsidiary or affiliate 

14 (including any permanent foreign establish15 ment) of any domestic concern which is con16 trolled in fact by such domestic concern, as de17 termined under regulations by the Secretary. 

18 (14) WEAPONS OF MASS DESTRUCTION.—The 

19 term ‘‘weapons of mass destruction’’ means nuclear, 

20 radiological, chemical, and biological weapons and 

21 delivery systems for such weapons. 


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1 Subtitle A—Authority and 

2 Administration of Controls 

3 SEC. 811. SHORT TITLE. 

4 This subtitle may be cited as the ‘‘Export Controls 

5 Act of 2018’’. 

6 SEC. 812. STATEMENT OF POLICY. 

7 The following is the policy of the United States: 

8 (1) To use export controls only after full con9 sideration of the impact on the economy of the 

10 United States and only to the extent necessary— 

11 (A) to restrict the exports of items which 

12 would make a significant contribution to the 

13 military potential of any other country or com14 bination of countries which would prove detri15 mental to the national security of the United 

16 States; and 

17 (B) to restrict the export of items if nec18 essary to further significantly the foreign policy 

19 of the United States or to fulfill its declared 

20 international obligations. 

21 (2) The national security and foreign policy of 

22 the United States require that the export, reexport, 

23 and transfer of items, and specific activities of 

24 United States persons, wherever located, be con25 trolled for the following purposes: 


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1 (A) To control the release of items for use 

2 in— 

3 (i) the proliferation of weapons of 

4 mass destruction or of conventional weap5 ons; 

6 (ii) the acquisition of destabilizing 

7 numbers or types of conventional weapons; 

8 (iii) acts of terrorism; 

9 (iv) military programs that could pose 

10 a threat to the security of the United 

11 States or its allies; or 

12 (v) activities undertaken specifically to 

13 cause significant interference with or dis14 ruption of critical infrastructure. 

15 (B) To preserve the qualitative military su16 periority of the United States. 

17 (C) To strengthen the United States in18 dustrial base. 

19 (D) To carry out the foreign policy of the 

20 United States, including the protection of 

21 human rights and the promotion of democracy. 

22 (E) To carry out obligations and commit23 ments under international agreements and ar24 rangements, including multilateral export con25 trol regimes. 


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1 (F) To facilitate military interoperability 

2 between the United States and its North Atlan3 tic Treaty Organization (NATO) and other 

4 close allies. 

5 (G) To ensure national security controls 

6 are tailored to focus on those core technologies 

7 and other items that are capable of being used 

8 to pose a serious national security threat to the 

9 United States. 

10 (3) The national security of the United States 

11 requires that the United States maintain its leader12 ship in the science, technology, engineering, and 

13 manufacturing sectors, including foundational tech14 nology that is essential to innovation. Such leader15 ship requires that United States persons are com16 petitive in global markets. The impact of the imple17 mentation of this subtitle on such leadership and 

18 competitiveness must be evaluated on an ongoing 

19 basis and applied in imposing controls under sec20 tions 813 and 814 to avoid negatively affecting such 

21 leadership. 

22 (4) The national security and foreign policy of 

23 the United States require that the United States 

24 participate in multilateral organizations and agree25 ments regarding export controls on items that are 


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1 consistent with the policy of the United States, and 

2 take all the necessary steps to secure the adoption 

3 and consistent enforcement, by the governments of 

4 such countries, of export controls on items that are 

5 consistent with such policy. 

6 (5) Export controls should be coordinated with 

7 the multilateral export control regimes. Export con8 trols that are multilateral are most effective, and 

9 should be tailored to focus on those core technologies 

10 and other items that are capable of being used to 

11 pose a serious national security threat to the United 

12 States and its allies. 

13 (6) Export controls applied unilaterally to items 

14 widely available from foreign sources generally are 

15 less effective in preventing end-users from acquiring 

16 those items. Application of unilateral export controls 

17 should be limited for purposes of protecting specific 

18 United States national security and foreign policy 

19 interests. 

20 (7) The effective administration of export con21 trols requires a clear understanding both inside and 

22 outside the United States Government of which 

23 items are controlled and an efficient process should 

24 be created to update the controls, such as by adding 

25 or removing such items. 


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1 (8) The export control system must ensure that 

2 it is transparent, predictable, and timely, has the 

3 flexibility to be adapted to address new threats in 

4 the future, and allows seamless access to and shar5 ing of export control information among all relevant 

6 United States national security and foreign policy 

7 agencies. 

8 (9) Implementation and enforcement of United 

9 States export controls require robust capabilities in 

10 monitoring, intelligence, and investigation, appro11 priate penalties for violations, and the ability to 

12 swiftly interdict unapproved transfers. 

13 (10) Export controls complement and are a 

14 critical element of the national security policies un15 derlying the laws and regulations governing foreign 

16 direct investment in the United States, including 

17 controlling the transfer of critical technologies to 

18 certain foreign persons. Thus, the President, in co19 ordination with the Secretary, the Secretary of De20 fense, the Secretary of State, the Secretary of En21 ergy, and the heads of other Federal agencies, as ap22 propriate, should have a regular and robust process 

23 to identify the emerging and other types of critical 

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1 ture of the underlying transaction. Such identifica2 tion efforts should draw upon the resources and ex3 pertise of all relevant parts of the United States 

4 Government, industry, and academia. These efforts 

5 should be in addition to traditional efforts to mod6 ernize and update the lists of controlled items under 

7 the multilateral export control regimes. 

8 (11) The authority under this subtitle may be 

9 exercised only in furtherance of all of the objectives 

10 set forth in paragraphs (1) through (10). 

11 SEC. 813. AUTHORITY OF THE PRESIDENT. 

12 (a) AUTHORITY.—In order to carry out the policy set 

13 forth in paragraphs (1) through (10) of section 812, the 

14 President shall control— 

15 (1) the export, reexport, and transfer of items 

16 subject to the jurisdiction of the United States, 

17 whether by United States persons or by foreign per18 sons; and 

19 (2) the activities of United States persons, 

20 wherever located, relating to specific— 

21 (A) nuclear explosive devices; 

22 (B) missiles; 

23 (C) chemical or biological weapons; 

24 (D) whole plants for chemical weapons pre25 cursors; 


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1 (E) foreign maritime nuclear projects; and 

2 (F) foreign military intelligence services. 

3 (b) REQUIREMENTS.—In exercising authority under 

4 this subtitle to carry out the policy set forth in paragraphs 

5 (1) through (10) of section 812, the President shall— 

6 (1) regulate the export, reexport, and transfer 

7 of items described in subsection (a)(1) of United 

8 States persons or foreign persons; 

9 (2) regulate the activities described in sub10 section (a)(2) of United States persons, wherever lo11 cated; 

12 (3) secure the cooperation of other governments 

13 and multilateral organizations to impose control sys14 tems that are consistent, to the extent possible, with 

15 the controls imposed under subsection (a); 

16 (4) maintain the leadership of the United 

17 States in science, engineering, technology research 

18 and development, manufacturing, and foundational 

19 technology that is essential to innovation; 

20 (5) protect United States technological ad21 vances by prohibiting unauthorized technology trans22 fers to foreign persons in the United States or out23 side the United States, particularly with respect to 

24 countries that may pose a significant threat to the 

25 national security of the United States; 


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1 (6) strengthen the United States industrial 

2 base, both with respect to current and future de3 fense requirements; and 

4 (7) enforce the controls through means such as 

5 regulations, requirements for compliance, lists of 

6 controlled items, lists of foreign persons who threat7 en the national security or foreign policy of the 

8 United States, and guidance in a form that facili9 tates compliance by United States persons and for10 eign persons, in particular academic institutions, sci11 entific and research establishments, and small- and 

12 medium-sized businesses. 

13 (c) APPLICATION OF CONTROLS.—The President 

14 shall impose controls over the export, reexport, or transfer 

15 of items for purposes of the objectives described in sub16 sections (b)(1) or (b)(2) without regard to the nature of 

17 the underlying transaction or any circumstances per18 taining to the activity, including whether such export, re19 export, or transfer occurs pursuant to a purchase order 

20 or other contract requirement, voluntary decision, inter21 company arrangement, marketing effort, or during a joint 

22 venture, joint development agreement, or similar collabo23 rative agreement. 


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1 SEC. 814. ADDITIONAL AUTHORITIES. 

2 (a) IN GENERAL.—In carrying out this subtitle on 

3 behalf of the President, the Secretary, in consultation with 

4 the Secretary of State, the Secretary of Defense, the Sec5 retary of Energy, and the heads of other Federal agencies 

6 as appropriate, shall— 

7 (1) establish and maintain a list of items that 

8 are controlled under this subtitle; 

9 (2) establish and maintain a list of foreign per10 sons and end-uses that are determined to be a threat 

11 to the national security and foreign policy of the 

12 United States pursuant to the policy set forth in sec13 tion 812(2)(A); 

14 (3) prohibit unauthorized exports, reexports, 

15 and transfers of controlled items, including to for16 eign persons in the United States or outside the 

17 United States; 

18 (4) restrict exports, reexports, and transfers of 

19 any controlled items to any foreign person or end20 use listed under paragraph (2); 

21 (5) require licenses or other authorizations, as 

22 appropriate, for exports, reexports, and transfers of 

23 controlled items, including imposing conditions or re24 strictions on United States persons and foreign per25 sons with respect to such licenses or other authoriza26 tions; 


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1 (6) establish a process for an assessment to de2 termine whether a foreign item is comparable in 

3 quality to an item controlled under this subtitle, and 

4 is available in sufficient quantities to render the 

5 United States export control of that item or the de6 nial of a license ineffective, including a mechanism 

7 to address that disparity; 

8 (7) require measures for compliance with the 

9 export controls established under this subtitle; 

10 (8) require and obtain such information from 

11 United States persons and foreign persons as is nec12 essary to carry out this subtitle; 

13 (9) require, to the extent feasible, identification 

14 of items subject to controls under this subtitle in 

15 order to facilitate the enforcement of such controls; 

16 (10) inspect, search, detain, or seize, or impose 

17 temporary denial orders with respect to items, in 

18 any form, that are subject to controls under this 

19 subtitle, or conveyances on which it is believed that 

20 there are items that have been, are being, or are 

21 about to be exported, reexported, or transferred in 

22 violation of this subtitle; 

23 (11) monitor shipments, or other means of 

24 transfer; 


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1 (12) keep the public fully apprised of changes 

2 in policy, regulations, and procedures established 

3 under this subtitle; 

4 (13) appoint technical advisory committees in 

5 accordance with the Federal Advisory Committee 

6 Act; 

7 (14) create, as warranted, exceptions to licens8 ing requirements in order to further the objectives of 

9 this subtitle; 

10 (15) establish and maintain processes to inform 

11 persons, either individually by specific notice or 

12 through amendment to any regulation or order 

13 issued under this subtitle, that a license from the 

14 Bureau of Industry and Security of the Department 

15 of Commerce is required to export; and 

16 (16) undertake any other action as is necessary 

17 to carry out this subtitle that is not otherwise pro18 hibited by law. 

19 (b) RELATIONSHIP TO IEEPA.—The authority under 

20 this subtitle may not be used to regulate or prohibit under 

21 this subtitle the export, reexport, or transfer of any item 

22 that may not be regulated or prohibited under section 

23 203(b) of the International Emergency Economic Powers 

24 Act (50 U.S.C. 1702(b)), except to the extent the Presi25 dent has made a determination necessary to impose conVerDate Sep 11 2014 23:20 Jun 27, 2018 Jkt 079200 PO 00000 Frm 00081 Fmt 6652 Sfmt 6201 E:\BILLS\H5841.PCS H5841

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1 trols under subparagraph (A), (B), or (C) of paragraph 

2 (2) of such section. 

3 (c) COUNTRIES SUPPORTING INTERNATIONAL TER4 RORISM.— 

5 (1) COMMERCE LICENSE REQUIREMENT.— 

6 (A) IN GENERAL.—A license shall be re7 quired for the export, reexport, or transfer of 

8 items, the control of which is implemented pur9 suant to subsection (a) by the Secretary, to a 

10 country if the Secretary of State has made the 

11 following determinations: 

12 (i) The government of such country 

13 has repeatedly provided support for acts of 

14 international terrorism. 

15 (ii) The export, reexport, or transfer 

16 of such items could make a significant con17 tribution to the military potential of such 

18 country, including its military logistics ca19 pability, or could enhance the ability of 

20 such country to support acts of inter21 national terrorism. 

22 (B) DETERMINATION UNDER OTHER PRO23 VISIONS OF LAW.—A determination of the Sec24 retary of State under section 620A of the For25 eign Assistance Act of 1961 (22 U.S.C. 2371), 


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1 section 40 of the Arms Export Control Act (22 

2 U.S.C. 2780), or any other provision of law 

3 that the government of a country described in 

4 subparagraph (A) has repeatedly provided sup5 port for acts of international terrorism shall be 

6 deemed to be a determination with respect to 

7 such government for purposes of clause (i) of 

8 subparagraph (A). 

9 (2) NOTIFICATION TO CONGRESS.— 

10 (A) IN GENERAL.—The Secretary of State 

11 and the Secretary shall notify the Committee on 

12 Foreign Affairs of the House of Representatives 

13 and the Committee on Banking, Housing, and 

14 Urban Affairs and the Committee on Foreign 

15 Relations of the Senate at least 30 days before 

16 any license is issued as required by paragraph 

17 (1). 

18 (B) CONTENTS.—The Secretary of State 

19 shall include in the notification required under 

20 subparagraph (A)— 

21 (i) a detailed description of the items 

22 to be offered, including a brief description 

23 of the capabilities of any item for which a 

24 license to export, reexport, or transfer the 

25 items is sought; 


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1 (ii) the reasons why the foreign coun2 try, person, or entity to which the export, 

3 reexport, or transfer is proposed to be 

4 made has requested the items under the 

5 export, reexport, or transfer, and a de6 scription of the manner in which such 

7 country, person, or entity intends to use 

8 such items; 

9 (iii) the reasons why the proposed ex10 port, reexport, or transfer is in the na11 tional interest of the United States; 

12 (iv) an analysis of the impact of the 

13 proposed export, reexport, or transfer on 

14 the military capabilities of the foreign 

15 country, person, or entity to which such 

16 transfer would be made; 

17 (v) an analysis of the manner in 

18 which the proposed export, reexport, or 

19 transfer would affect the relative military 

20 strengths of countries in the region to 

21 which the items that are the subject of 

22 such export, reexport, or transfer would be 

23 delivered and whether other countries in 

24 the region have comparable kinds and 

25 amounts of items; and 


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1 (vi) an analysis of the impact of the 

2 proposed export, reexport, or transfer on 

3 the relations of the United States with the 

4 countries in the region to which the items 

5 that are the subject of such export, reex6 port, or transfer would be delivered. 

7 (3) PUBLICATION IN FEDERAL REGISTER.— 

8 Each determination of the Secretary of State under 

9 paragraph (1)(A)(i) shall be published in the Fed10 eral Register, except that the Secretary of State may 

11 exclude confidential information and trade secrets 

12 contained in such determination. 

13 (4) RESCISSION OF DETERMINATION.—A deter14 mination of the Secretary of State under paragraph 

15 (1)(A)(i) may not be rescinded unless the President 

16 submits to the Speaker of the House of Representa17 tives, the chairman of the Committee on Foreign Af18 fairs, and the chairman of the Committee on Bank19 ing, Housing, and Urban Affairs and the chairman 

20 of the Committee on Foreign Relations of the Sen21 ate— 

22 (A) before the proposed rescission would 

23 take effect, a report certifying that— 


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1 (i) there has been a fundamental 

2 change in the leadership and policies of the 

3 government of the country concerned; 

4 (ii) that government is not supporting 

5 acts of international terrorism; and 

6 (iii) that government has provided as7 surances that it will not support acts of 

8 international terrorism in the future; or 

9 (B) at least 90 days before the proposed 

10 rescission would take effect, a report justifying 

11 the rescission and certifying that— 

12 (i) the government concerned has not 

13 provided any support for acts international 

14 terrorism during the preceding 24-month 

15 period; and 

16 (ii) the government concerned has 

17 provided assurances that it will not sup18 port acts of international terrorism in the 

19 future. 

20 (5) DISAPPROVAL OF RESCISSION.—No rescis21 sion under paragraph (4)(B) of a determination 

22 under paragraph (1)(A) with respect to the govern23 ment of a country may be made if Congress, within 

24 90 days after receipt of a report under paragraph 

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1 section (f)(2) of section 40 of the Arms Export Con2 trol Act with respect to a rescission under subsection 

3 (f)(1) of such section with respect to the government 

4 of such country. 

5 (6) NOTIFICATION AND BRIEFING.—Not later 

6 than— 

7 (A) ten days after initiating a review of the 

8 activities of the government of the country con9 cerned within the 24-month period referred to 

10 in paragraph (4)(B)(i), the Secretary of State 

11 shall notify the Committee on Foreign Affairs 

12 of the House of Representatives and the Com13 mittee on Foreign Relations of the Senate of 

14 such initiation; and 

15 (B) 20 days after the notification described 

16 in paragraph (1), the Secretary of State shall 

17 brief the congressional committees described in 

18 paragraph (1) on the status of such review. 

19 (7) WAIVER.—The President may waive the re20 quirement under paragraph (1) that a license shall 

21 be required for the export, reexport, or transfer of 

22 items, the control of which is implemented pursuant 

23 to subsection (a) by the Secretary, to a country if 

24 the President— 


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1 (A) determines that to do so is essential to 

2 the national security interests of the United 

3 States; and 

4 (B) consults with the Committee on For5 eign Affairs of the House of Representatives 

6 and the Committee on Banking, Housing, and 

7 Urban Affairs and the Committee on Foreign 

8 Relations of the Senate not less than 15 days 

9 prior to the waiver taking effect. 

10 (d) ENHANCED CONTROLS.— 

11 (1) IN GENERAL.—In furtherance of section 

12 813(a), the President shall, except to the extent au13 thorized by a statute or regulation administered by 

14 a Federal department or agency other than the De15 partment of Commerce, require a United States per16 son, wherever located, to apply for and receive a li17 cense from the Department of Commerce for— 

18 (A) the export, reexport, or transfer of 

19 items described in paragraph (2), including 

20 items that are not subject to control under this 

21 subtitle; and 

22 (B) other activities that may support the 

23 design, development, production, use, operation, 

24 installation, maintenance, repair, overhaul, or 


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1 refurbishing of, or for the performance of serv2 ices relating to, any such items. 

3 (2) ITEMS DESCRIBED.—The items described in 

4 this paragraph include— 

5 (A) nuclear explosive devices; 

6 (B) missiles; 

7 (C) chemical or biological weapons; 

8 (D) whole plants for chemical weapons pre9 cursors; and 

10 (E) foreign maritime nuclear projects that 

11 would pose a risk to the national security or 

12 foreign policy of the United States. 

13 (e) ADDITIONAL PROHIBITIONS.—The Secretary may 

14 inform United States persons, either individually by spe15 cific notice or through amendment to any regulation or 

16 order issued under this subtitle, that a license from the 

17 Bureau of Industry and Security of the Department of 

18 Commerce is required to engage in any activity if the ac19 tivity involves the types of movement, service, or support 

20 described in subsection (d). The absence of any such noti21 fication does not excuse the United States person from 

22 compliance with the license requirements of subsection (d), 

23 or any regulation or order issued under this subtitle. 

24 (f) LICENSE REVIEW STANDARDS.—The Secretary 

25 shall deny an application to engage in any activity deVerDate Sep 11 2014 23:20 Jun 27, 2018 Jkt 079200 PO 00000 Frm 00089 Fmt 6652 Sfmt 6201 E:\BILLS\H5841.PCS H5841

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1 scribed in subsection (d) if the activity would make a ma2 terial contribution to any of the items described in sub3 section (d)(2). 

4 SEC. 815. ADMINISTRATION OF EXPORT CONTROLS. 

5 (a) IN GENERAL.—The President shall rely on, in6 cluding through delegations, as appropriate, to the Sec7 retary, the Secretary of Defense, the Secretary of State, 

8 the Secretary of Energy, the Director of National Intel9 ligence, and the heads of other Federal agencies as appro10 priate, to exercise the authority to carry out the purposes 

11 set forth in subsection (b). 

12 (b) PURPOSES.— 

13 (1) IN GENERAL.—The purposes of this section 

14 include to— 

15 (A) advise the President with respect to— 

16 (i) identifying specific threats to the 

17 national security and foreign policy that 

18 the authority of this subtitle may be used 

19 to address; and 

20 (ii) exercising the authority under this 

21 subtitle to implement policies, regulations, 

22 procedures, and actions that are necessary 

23 to effectively counteract those threats; 

24 (B) review and approve— 


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1 (i) criteria for including items on, and 

2 removing such an item from, a list of con3 trolled items established under this sub4 title; 

5 (ii) an interagency procedure for com6 piling and amending any list described in 

7 clause (i); 

8 (iii) criteria for including a person on 

9 a list of persons to whom exports, reex10 ports, and transfers of items are prohibited 

11 or restricted under this subtitle; 

12 (iv) standards for compliance by per13 sons subject to controls under this subtitle; 

14 and 

15 (v) policies and procedures for the 

16 end-use monitoring of exports, reexports, 

17 and transfers of items controlled under 

18 this subtitle; 

19 (C) obtain independent evaluations, includ20 ing from Inspectors General of the relevant de21 partments or agencies, on a periodic basis on 

22 the effectiveness of the implementation of this 

23 subtitle in carrying out the policy set forth in 

24 section 812; and 


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1 (D) benefit from the inherent equities, ex2 perience, and capabilities of the Federal offi3 cials described in subsection (a), including— 

4 (i) the views of the Department of De5 fense with respect to the national security 

6 implications of a particular control or deci7 sion; 

8 (ii) the views of the Department of 

9 State with respect to foreign policy impli10 cations of a particular control or decision, 

11 including views relating to national secu12 rity; 

13 (iii) the views of the Department of 

14 Energy with respect to the implications for 

15 nuclear proliferation of a particular control 

16 or decision; 

17 (iv) the views of the Department of 

18 Commerce with respect to the administra19 tion of an efficient, coherent, reliable, en20 forceable, and predictable export control 

21 system, including views relating to national 

22 security, and the resolution of competing 

23 views or policy objectives described in sec24 tion 812; and 


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1 (v) the views of other Federal agen2 cies, including the Department of Home3 land Security and the Department of Jus4 tice, with respect to enforceability of a par5 ticular control or decision. 

6 (2) TRANSMITTAL AND IMPLEMENTATION OF

7 EVALUATIONS.—The results of the independent eval8 uations conducted pursuant to paragraph (1)(C) 

9 shall be transmitted to the President and the Con10 gress, in classified form if necessary. Subject to the 

11 delegation of authority by the President, the Federal 

12 officials described in subsection (a) shall determine, 

13 direct, and ensure that improvements recommended 

14 in the evaluations are implemented. 

15 (c) SENSE OF CONGRESS.—It is the sense of Con16 gress that the administration of export controls under this 

17 subtitle should be consistent with the procedures relating 

18 to export license applications described in Executive Order 

19 12981 (1995). 

20 SEC. 816. LICENSING. 

21 (a) IN GENERAL.—The President shall, as set forth 

22 in section 815(a), establish a procedure for the Depart23 ment of Commerce to license or otherwise authorize the 

24 export, reexport, and transfer of items controlled under 

25 this subtitle in order to carry out the policy set forth in 


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1 section 812 and the requirements set forth in section 

2 813(b). The procedure shall ensure that— 

3 (1) license applications and other requests for 

4 authorization are considered and decisions made 

5 with the participation of appropriate Federal agen6 cies, as appropriate; and 

7 (2) licensing decisions are made in an expedi8 tious manner, with transparency to applicants on the 

9 status of license and other authorization processing 

10 and the reason for denying any license or request for 

11 authorization. 

12 (b) SENSE OF CONGRESS.—It is the sense of Con13 gress that the President should make best efforts to en14 sure that an accurate, consistent, and timely evaluation 

15 and processing of licenses or other requests for authoriza16 tion to export, reexport, or transfer items controlled under 

17 this subtitle is generally accomplished within 30 days from 

18 the date of such license request. 

19 (c) FEES.—No fee may be charged in connection with 

20 the submission, processing, or consideration of any appli21 cation for a license or other authorization or other request 

22 made in connection with any regulation in effect under 

23 the authority of this subtitle. 

24 (d) ADDITIONAL PROCEDURAL REQUIREMENTS.— 


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1 (1) IN GENERAL.—The procedure required 

2 under subsection (a) shall provide for the assessment 

3 of the impact of a proposed export of an item on the 

4 United States defense industrial base and the denial 

5 of an application for a license or a request for an 

6 authorization of any export that would have a sig7 nificant negative impact on such defense industrial 

8 base, as described in paragraph (3). 

9 (2) INFORMATION FROM APPLICANT.—The pro10 cedure required under subsection (a) shall also re11 quire an applicant for a license to provide the infor12 mation necessary to make the assessment provided 

13 under paragraph (1), including whether the purpose 

14 or effect of the export is to allow for the significant 

15 production of items relevant for the defense indus16 trial base outside the United States. 

17 (3) SIGNIFICANTLY NEGATIVE IMPACT DE18 FINED.—A significant negative impact on the United 

19 States defense industrial base is the following: 

20 (A) A reduction in the availability of an 

21 item produced in the United States that is like22 ly to be acquired by the Department of Defense 

23 or other Federal department or agency for the 

24 advancement of the national security of the 

25 United States, or for the production of an item 


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1 in the United States for the Department of De2 fense or other agency for the advancement of 

3 the national security of the United States. 

4 (B) A reduction in the production in the 

5 United States of an item that is the result of 

6 research and development carried out, or fund7 ed by, the Department of Defense or other Fed8 eral department or agency to advance the na9 tional security of the United States, or a feder10 ally funded research and development center. 

11 (C) A reduction in the employment of 

12 United States persons whose knowledge and 

13 skills are necessary for the continued produc14 tion in the United States of an item that is 

15 likely to be acquired by the Department of De16 fense or other Federal department or agency 

17 for the advancement of the national security of 

18 the United States. 

19 SEC. 817. COMPLIANCE ASSISTANCE. 

20 (a) SYSTEM FOR SEEKING ASSISTANCE.—The Presi21 dent may authorize the Secretary to establish a system 

22 to provide United States persons with assistance in com23 plying with this subtitle, which may include a mechanism 

24 for providing information, in classified form as appro25 priate, who are potential customers, suppliers, or business 


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1 partners with respect to items controlled under this sub2 title, in order to further ensure the prevention of the ex3 port, reexport, or transfer of items that may pose a threat 

4 to the national security or foreign policy of the United 

5 States. 

6 (b) SECURITY CLEARANCES.—In order to carry out 

7 subsection (a), the President may issue appropriate secu8 rity clearances to persons described in that subsection who 

9 are responsible for complying with this subtitle. 

10 (c) ASSISTANCE FOR CERTAIN BUSINESSES.— 

11 (1) IN GENERAL.—Not later than 120 days 

12 after the date of the enactment of this Act, the 

13 President shall develop and submit to Congress a 

14 plan to assist small- and medium-sized United 

15 States in export licensing and other processes under 

16 this subtitle. 

17 (2) CONTENTS.—The plan shall include, among 

18 other things, arrangements for the Department of 

19 Commerce to provide counseling to businesses de20 scribed in paragraph (1) on filing applications and 

21 identifying items controlled under this subtitle, as 

22 well as proposals for seminars and conferences to 

23 educate such businesses on export controls, licensing 

24 procedures, and related obligations. 


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1 SEC. 818. REQUIREMENTS TO IDENTIFY AND CONTROL 

2 EMERGING, FOUNDATIONAL, AND OTHER 

3 CRITICAL TECHNOLOGIES IN EXPORT CON4 TROL REGULATIONS. 

5 (a) IDENTIFICATION OF TECHNOLOGIES.— 

6 (1) IN GENERAL.—The President shall establish 

7 and, in coordination with the Secretary, the Sec8 retary of Defense, the Secretary of Energy, the Sec9 retary of State, and the heads of other Federal 

10 agencies as appropriate, lead a regular, ongoing 

11 interagency process to identify emerging and 

12 foundational technologies that— 

13 (A) are essential to the national security of 

14 the United States; and 

15 (B) are not critical technologies described 

16 in subparagraphs (A) through (D) of section 

17 721(a)(7) of the Defense Production Act of 

18 1950 (50 U.S.C. 4565(a)(7)). 

19 (2) INTERAGENCY PROCESS.—The interagency 

20 process required under paragraph (1) shall— 

21 (A) be informed by multiple sources of in22 formation, including— 

23 (i) publicly available information; 

24 (ii) classified information, including 

25 relevant information provided by the Direc26 tor of National Intelligence; 


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1 (iii) information relating to reviews 

2 and investigations of transactions by the 

3 Committee on Foreign Investment in the 

4 United States under section 721 of the De5 fense Production Act of 1950 (50 U.S.C. 

6 4565); and 

7 (iv) information provided by the advi8 sory committees established by the Sec9 retary to advise the Under Secretary of 

10 Commerce for Industry and Security on 

11 controls under the Export Administration 

12 Regulations, including the Emerging Tech13 nology and Research Advisory Committee. 

14 (B) take into account— 

15 (i) the development of emerging and 

16 foundational technologies in other coun17 tries; 

18 (ii) the effect export controls imposed 

19 pursuant to this section may have on the 

20 development of the technologies in the 

21 United States; and 

22 (iii) the effectiveness of export con23 trols imposed pursuant to this section on 

24 limiting the proliferation of emerging and 


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1 foundational technologies to foreign coun2 tries; 

3 (C) provide for the nomination of an 

4 emerging or foundational technology to be iden5 tified under subsection (a) by the Secretary, the 

6 Secretary of Defense, the Secretary of State, 

7 the Secretary of Energy, or the heads of other 

8 Federal agencies as appropriate; 

9 (D) ensure that, not later than 60 days 

10 after the nomination of an emerging or 

11 foundational technology under subparagraph 

12 (C), the Secretary makes a determination, in 

13 coordination with the Secretary of Defense, the 

14 Secretary of State, the Secretary of Energy, 

15 and the heads of other Federal agencies as ap16 propriate, regarding whether additional or 

17 modified controls on the technology under this 

18 section are warranted, including through in19 forming a person that a license is required to 

20 export the technology, or that more time and 

21 input from the sources described in this para22 graph is needed before a final determination is 

23 made to issue a rule to impose controls over 

24 such technology; and 

25 (E) include a notice and comment period. 


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1 (b) COMMERCE CONTROLS.— 

2 (1) IN GENERAL.—The Secretary shall, except 

3 to the extent inconsistent with the authorities de4 scribed in subsection (a)(1)(B), establish appropriate 

5 controls on the export, reexport, or transfer of tech6 nology identified pursuant to subsection (a) and sub7 ject to the Export Administration Regulations, in8 cluding by publishing additional regulations. 

9 (2) LEVELS OF CONTROL.— 

10 (A) IN GENERAL.—The Secretary may, in 

11 coordination with the Secretary of Defense, the 

12 Secretary of Energy, the Secretary of State, 

13 and the heads of other Federal agencies as ap14 propriate, specify the level of control to apply 

15 under paragraph (1) with respect to the export 

16 of technology described in that paragraph, in17 cluding a requirement for a license or other au18 thorization, to export, reexport, or transfer of 

19 that technology. 

20 (B) CONSIDERATIONS.—In determining 

21 under subparagraph (A) the level of control 

22 that is appropriate for technology described in 

23 paragraph (1), the Secretary shall take into ac24 count— 


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1 (i) lists of countries to which exports 

2 from the United States are restricted; and 

3 (ii) the potential end uses and end 

4 users of the technology. 

5 (C) MINIMUM REQUIREMENTS.—The Sec6 retary shall, at a minimum and except as re7 quired by paragraph (4), require a license to ex8 port, reexport, or transfer technology described 

9 in paragraph (1) to or in a country subject to 

10 an embargo, including an arms embargo, im11 posed by the United States. 

12 (3) REVIEW OF LICENSE APPLICATIONS.— 

13 (A) PROCEDURES.—The procedures set 

14 forth in Executive Order 12981 (50 U.S.C. 

15 4603 note; relating to the administration of ex16 port controls) or any successor order, shall 

17 apply to the review of an application for a li18 cense for the export, reexport, or transfer of 

19 technology described in paragraph (1). 

20 (B) CONSIDERATION OF INFORMATION RE21 LATING TO NATIONAL SECURITY.—In reviewing 

22 an application for a license or other authoriza23 tion for the export, reexport, or transfer of 

24 technology described in paragraph (1), the Sec25 retary shall take into account information proVerDate Sep 11 2014 23:20 Jun 27, 2018 Jkt 079200 PO 00000 Frm 00102 Fmt 6652 Sfmt 6201 E:\BILLS\H5841.PCS H5841

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1 vided by the Director of National Intelligence 

2 regarding any threat to the national security of 

3 the United States posed by the proposed export, 

4 reexport, or transfer. The Director of National 

5 Intelligence shall provide such information on 

6 the request of the Secretary. 

7 (C) DISCLOSURE RELATING TO COLLABO8 RATIVE ARRANGEMENTS.—In the case of an ap9 plication for a license or other authorization for 

10 the export, reexport, or transfer of technology 

11 described in paragraph (1) submitted by or on 

12 behalf of a joint venture, joint development 

13 agreement, or similar collaborative arrange14 ment, the Secretary may require the applicant 

15 to identify, in addition to any foreign person 

16 participating in the arrangement, any foreign 

17 person with significant ownership interest in a 

18 foreign person participating in the arrange19 ment. 

20 (4) EXCEPTIONS.— 

21 (A) MANDATORY EXCEPTION.—The Sec22 retary may not control under this subsection 

23 the export of any technology described in para24 graph (1) if the regulation of that technology is 

25 prohibited under any other provision of law. 


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1 (B) REGULATORY EXEMPTIONS.—In pre2 scribing regulations under paragraph (1), the 

3 Secretary may include appropriate regulatory 

4 exemptions to the requirements of that para5 graph for the export, reexport, or transfer of 

6 technology described in paragraph (1). 

7 (c) MULTILATERAL CONTROLS.— 

8 (1) IN GENERAL.—The Secretary of State, in 

9 coordination with the Secretary, the Secretary of 

10 Defense, the Secretary of Energy, and heads of 

11 other Federal agencies as appropriate, shall propose 

12 to the relevant multilateral export control regimes in 

13 the following year that a technology identified 

14 through the interagency process required under sub15 section (a) be added to the list of technology con16 trolled by such regimes. 

17 (2) REVIEW OF CONTINUED UNILATERAL EX18 PORT CONTROLS.—The Secretary, with respect to 

19 those items on the Commerce Control List main20 tained under part 774 of title 15, Code of Federal 

21 Regulations, and in coordination with the Secretary 

22 of Defense, the Secretary of Energy, and the Sec23 retary of State, and the Secretary of State, with re24 spect to those items on the United States Munitions 

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1 fense and the heads of other Federal agencies as ap2 propriate, shall determine whether national security 

3 concerns warrant continued unilateral export con4 trols over a technology proposed for multilateral con5 trol under paragraph (1) if the relevant multilateral 

6 export control regime does not agree to list such 

7 technology on its control list within three years of a 

8 proposal by the United States. 

9 (d) REPORT.—Not later than 180 days after the date 

10 of the enactment of this Act, and not less frequently than 

11 every 180 days thereafter, the Secretary, in coordination 

12 with the Secretary of Defense, the Secretary of State, the 

13 Secretary of Energy, and the heads of other Federal agen14 cies as appropriate, shall submit to the Committee on For15 eign Investment in the United States on a semiannual 

16 basis a report on updates of any key actions taken pursu17 ant to this section. 

18 (e) RULE OF CONSTRUCTION.—Nothing in this sec19 tion shall be construed to alter or limit— 

20 (1) the authority of the President and the Sec21 retary of State to designate those items that are 

22 considered to be defense articles or defense services 

23 for purposes of the Arms Export Control Act (22 

24 U.S.C. 2751 et seq.) or to otherwise regulate such 

25 items; or 


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1 (2) the authority of the President under the 

2 Atomic Energy Act of 1954 (42 U.S.C. 2011 et 

3 seq.), the Nuclear Non-Proliferation Act of 1978 (22 

4 U.S.C. 3201 et seq.), the Energy Reorganization Act 

5 of 1974 (42 U.S.C. 5801 et seq.), this title, or any 

6 other provision of law relating to the control of ex7 ports. 

8 (f) SENSE OF CONGRESS.—It is the sense of the Con9 gress that the President should request in the annual 

10 budget of the President submitted under section 1105(a) 

11 of title 31, United States Code, sufficient resources to en12 able the relevant departments and agencies to effectively 

13 implement this section. 

14 SEC. 819. REVIEW RELATING TO COUNTRIES SUBJECT TO 

15 COMPREHENSIVE UNITED STATES ARMS EM16 BARGO. 

17 (a) IN GENERAL.—The Secretary, the Secretary of 

18 Defense, the Secretary of Energy, the Secretary of State, 

19 and the heads of other Federal agencies as appropriate, 

20 shall conduct a review of— 

21 (1) section 744.21 of title 15, Code of Federal 

22 Regulations, including to assess whether the current 

23 and anticipated risks of direct or indirect diversion, 

24 such as from policies and practices that effectively 

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1 users and end-uses, require that the scope of control 

2 under such section should be expanded to apply to 

3 exports, reexports, or transfers for military end uses 

4 and military end users in countries that are subject 

5 to a comprehensive United States arms embargo and 

6 countries that are subject to a United Nations arms 

7 embargo; 

8 (2) entries on the Commerce Control List main9 tained under part 774 of title 15, Code of Federal 

10 Regulations, that do not impose license requirements 

11 for exports, reexports, or transfers of items to coun12 tries subject to a comprehensive United States arms 

13 embargo; 

14 (3) whether there should be a presumption of 

15 denial for an application for a license to export, re16 export, or transfer an item on the Commerce Con17 trol List subject to national security controls or re18 gional stability controls under part 742 of the Ex19 port Administration Regulations if that item is rea20 sonably likely to contribute, directly or indirectly, to 

21 the military or intelligence capabilities of any coun22 try with respect to which the United States has in 

23 place an arms embargo, sanctions, or comparable re24 strictions, including to or within any country listed 


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1 in Country Group D:5 in Supplement No. 1 to part 

2 740 of the Export Administration Regulations; 

3 (4) whether there should be a presumption of 

4 denial for an application for a license to export, re5 export, or transfer an emerging or foundational 

6 technology identified in section 818(a) to or within 

7 a country identified in section 744.21 of title 15, 

8 Code of Federal Regulations or Country Group E in 

9 Supplement No. 1 to part 740 of the Export Admin10 istration Regulations; and 

11 (5) without limiting the effect of paragraphs (3) 

12 and (4), whether there should be a presumption of 

13 approval for an application for a license to export, 

14 reexport, or transfer an item on the Commerce Con15 trol List if that item is for a civil end use. 

16 (b) IMPLEMENTATION OF RESULTS OF REVIEW.— 

17 Not later than 270 days after the date of the enactment 

18 of this Act, the Secretary shall implement the results of 

19 the review conducted under subsection (a). 

20 SEC. 820. PENALTIES. 

21 (a) UNLAWFUL ACTS.— 

22 (1) IN GENERAL.—It shall be unlawful for a 

23 person to violate, attempt to violate, conspire to vio24 late, or cause a violation of this subtitle or of any 

25 regulation, order, license, or other authorization 


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1 issued under this subtitle, including any of the un2 lawful acts described in paragraph (2). 

3 (2) SPECIFIC UNLAWFUL ACTS.—The unlawful 

4 acts described in this paragraph are the following: 

5 (A) No person may engage in any conduct 

6 prohibited by or contrary to, or refrain from en7 gaging in any conduct required by this subtitle, 

8 the Export Administration Regulations, or any 

9 order, license or authorization issued there10 under. 

11 (B) No person may cause or aid, abet, 

12 counsel, command, induce, procure, permit, or 

13 approve the doing of any act prohibited, or the 

14 omission of any act required by this subtitle, 

15 the Export Administration Regulations, or any 

16 order, license or authorization issued there17 under. 

18 (C) No person may solicit or attempt a vio19 lation of this subtitle, the Export Administra20 tion Regulations, or any order, license or au21 thorization issued thereunder. 

22 (D) No person may conspire or act in con23 cert with one or more other persons in any 

24 manner or for any purpose to bring about or to 

25 do any act that constitutes a violation of this 


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1 subtitle, the Export Administration Regula2 tions, or any order, license or authorization 

3 issued thereunder. 

4 (E) No person may order, buy, remove, 

5 conceal, store, use, sell, loan, dispose of, trans6 fer, transport, finance, forward, or otherwise 

7 service, in whole or in part, or conduct negotia8 tions to facilitate such activities for, any item 

9 exported or to be exported from the United 

10 States, or that is otherwise subject to the Ex11 port Administration Regulations, with knowl12 edge that a violation of this subtitle, the Export 

13 Administration Regulations, or any order, li14 cense or authorization issued thereunder, has 

15 occurred, is about to occur, or is intended to 

16 occur in connection with the item unless valid 

17 authorization is obtained therefor. 

18 (F) No person may make any false or mis19 leading representation, statement, or certifi20 cation, or falsify or conceal any material fact, 

21 either directly to the Department of Commerce, 

22 or an official of any other United States agen23 cy, including the Department of Homeland Se24 curity and the Department of Justice, or indi25 rectly through any other person— 


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1 (i) in the course of an investigation or 

2 other action subject to the Export Admin3 istration Regulations; 

4 (ii) in connection with the prepara5 tion, submission, issuance, use, or mainte6 nance of any export control document or 

7 any report filed or required to be filed pur8 suant to the Export Administration Regu9 lations; or 

10 (iii) for the purpose of or in connec11 tion with effecting any export, reexport, or 

12 transfer of an item subject to the Export 

13 Administration Regulations or a service or 

14 other activity of a United States person de15 scribed in section 814. 

16 (G) No person may engage in any trans17 action or take any other action with intent to 

18 evade the provisions of this subtitle, the Export 

19 Administration Regulations, or any order, li20 cense, or authorization issued thereunder. 

21 (H) No person may fail or refuse to com22 ply with any reporting or recordkeeping require23 ments of the Export Administration Regula24 tions or of any order, license, or authorization 

25 issued thereunder. 


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1 (I) Except as specifically authorized in the 

2 Export Administration Regulations or in writ3 ing by the Department of Commerce, no person 

4 may alter any license, authorization, export con5 trol document, or order issued under the Export 

6 Administration Regulations. 

7 (J) No person may take any action that is 

8 prohibited by a denial order issued by the De9 partment of Commerce to prevent imminent 

10 violations of this subtitle, the Export Adminis11 tration Regulations, or any order, license or au12 thorization issued thereunder. 

13 (3) ADDITIONAL REQUIREMENTS.—For pur14 poses of subparagraph (G), any representation, 

15 statement, or certification made by any person shall 

16 be deemed to be continuing in effect. Each person 

17 who has made a representation, statement, or certifi18 cation to the Department of Commerce relating to 

19 any order, license, or other authorization issued 

20 under this subtitle shall notify the Department of 

21 Commerce, in writing, of any change of any material 

22 fact or intention from that previously represented, 

23 stated, or certified, immediately upon receipt of any 

24 information that would lead a reasonably prudent 


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1 person to know that a change of material fact or in2 tention had occurred or may occur in the future. 

3 (b) CRIMINAL PENALTY.—A person who willfully 

4 commits, willfully attempts to commit, or willfully con5 spires to commit, or aids and abets in the commission of, 

6 an unlawful act described in subsection (a)— 

7 (1) shall be fined not more than $1,000,000; 

8 and 

9 (2) in the case of the individual, shall be im10 prisoned for not more than 20 years, or both. 

11 (c) CIVIL PENALTIES.— 

12 (1) AUTHORITY.—The President may impose 

13 the following civil penalties on a person for each vio14 lation by that person of this subtitle or any regula15 tion, order, or license issued under this subtitle, for 

16 each violation: 

17 (A) A fine of not more than $300,000 or 

18 an amount that is twice the value of the trans19 action that is the basis of the violation with re20 spect to which the penalty is imposed, which21 ever is greater. 

22 (B) Revocation of a license issued under 

23 this subtitle to the person. 


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1 (C) A prohibition on the person’s ability to 

2 export, reexport, or transfer any items, whether 

3 or not subject to controls under this subtitle. 

4 (2) PROCEDURES.—Any civil penalty under this 

5 subsection may be imposed only after notice and op6 portunity for an agency hearing on the record in ac7 cordance with sections 554 through 557 of title 5, 

8 United States Code. 

9 (3) STANDARDS FOR LEVELS OF CIVIL PEN10 ALTY.—The Secretary may by regulation provide 

11 standards for establishing levels of civil penalty 

12 under this subsection based upon factors such as the 

13 seriousness of the violation, the culpability of the vi14 olator, and such mitigating factors as the violator’s 

15 record of cooperation with the Government in dis16 closing the violation. 

17 (d) CRIMINAL FORFEITURE OF PROPERTY INTEREST

18 AND PROCEEDS.— 

19 (1) FORFEITURE.—Any person who is convicted 

20 under subsection (b) of a violation of a control im21 posed under section 813 (or any regulation, order, 

22 or license issued with respect to such control) shall, 

23 in addition to any other penalty, forfeit to the 

24 United States— 


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1 (A) any of that person’s interest in, secu2 rity of, claim against, or property or contractual 

3 rights of any kind in the tangible items that 

4 were the subject of the violation; 

5 (B) any of that person’s interest in, secu6 rity of, claim against, or property or contractual 

7 rights of any kind in tangible property that was 

8 used in the violation; and 

9 (C) any of that person’s property consti10 tuting, or derived from, any proceeds obtained 

11 directly or indirectly as a result of the violation. 

12 (2) PROCEDURES.—The procedures in any for13 feiture under this subsection, and the duties and au14 thority of the courts of the United States and the 

15 Attorney General with respect to any forfeiture ac16 tion under this subsection or with respect to any 

17 property that may be subject to forfeiture under this 

18 subsection, shall be governed by the provisions of 

19 section 1963 of title 18, United States Code. 

20 (e) PRIOR CONVICTIONS.— 

21 (1) LICENSE BAR.— 

22 (A) IN GENERAL.—The Secretary may— 

23 (i) deny the eligibility of any person 

24 convicted of a criminal violation described 

25 in subparagraph (B) to export, reexport, or 


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1 transfer outside the United States any 

2 item, whether or not subject to controls 

3 under this subtitle, for a period of up to 10 

4 years beginning on the date of the convic5 tion; and 

6 (ii) revoke any license or other author7 ization to export, reexport, or transfer 

8 items that was issued under this subtitle 

9 and in which such person has an interest 

10 at the time of the conviction. 

11 (B) VIOLATIONS.—The violations referred 

12 to in subparagraph (A) are any criminal viola13 tions of, or criminal attempt or conspiracy to 

14 violate— 

15 (i) this subtitle (or any regulation, li16 cense, or order issued under this subtitle); 

17 (ii) any regulation, license, or order 

18 issued under the International Emergency 

19 Economic Powers Act; 

20 (iii) section 371, 554, 793, 794, or 

21 798 of title 18, United States Code; 

22 (iv) section 1001 of title 18, United 

23 States Code; 

24 (v) section 4(b) of the Internal Secu25 rity Act of 1950 (50 U.S.C. 783(b)); or 


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1 (vi) section 38 of the Arms Export 

2 Control Act (22 U.S.C. 2778). 

3 (2) APPLICATION TO OTHER PARTIES.—The 

4 Secretary may exercise the authority under para5 graph (1) with respect to any person related, 

6 through affiliation, ownership, control, position of 

7 responsibility, or other connection in the conduct of 

8 trade or business, to any person convicted of any 

9 violation of law set forth in paragraph (1), upon a 

10 showing of such relationship with the convicted 

11 party, and subject to the procedures set forth in 

12 subsection (c)(2). 

13 (f) OTHER AUTHORITIES.—Nothing in subsection 

14 (c), (d), or (e) limits— 

15 (1) the availability of other administrative or 

16 judicial remedies with respect to violations of this 

17 subtitle, or any regulation, order, license or other 

18 authorization issued under this subtitle; 

19 (2) the authority to compromise and settle ad20 ministrative proceedings brought with respect to vio21 lations of this subtitle, or any regulation, order, li22 cense, or other authorization issued under this sub23 title; or 

24 (3) the authority to compromise, remit or miti25 gate seizures and forfeitures pursuant to section 


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1 1(b) of title VI of the Act of June 15, 1917 (22 

2 U.S.C. 401(b)). 

3 SEC. 821. ENFORCEMENT. 

4 (a) AUTHORITIES.—In order to enforce this subtitle, 

5 the Secretary, on behalf of the President shall exercise, 

6 in addition to relevant enforcement authorities of other 

7 Federal agencies, the authority to— 

8 (1) issue orders and guidelines; 

9 (2) require, inspect, and obtain books, records, 

10 and any other information from any person subject 

11 to the provisions of this subtitle; 

12 (3) administer oaths or affirmations and by 

13 subpoena require any person to appear and testify or 

14 to appear and produce books, records, and other 

15 writings, or both; 

16 (4) conduct investigations (including under17 cover) in the United States and in other countries 

18 using all applicable laws of the United States, in19 cluding intercepting any wire, oral, and electronic 

20 communications, conducting electronic surveillance, 

21 using pen registers and trap and trace devices, and 

22 carrying out acquisitions, to the extent authorized 

23 under chapters 119, 121, and 206 of title 18, 

24 United States Code; 


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1 (5) inspect, search, detain, seize, or issue tem2 porary denial orders with respect to items, in any 

3 form, that are subject to controls under this subtitle, 

4 or conveyances on which it is believed that there are 

5 items that have been, are being, or are about to be 

6 exported, reexported, or transferred in violation of 

7 this subtitle, or any regulations, order, license, or 

8 other authorization issued thereunder; 

9 (6) carry firearms; 

10 (7) conduct prelicense inspections and post11 shipment verifications; and 

12 (8) execute warrants and make arrests. 

13 (b) ENFORCEMENT OF SUBPOENAS.—In the case of 

14 contumacy by, or refusal to obey a subpoena issued to, 

15 any person under subsection (a)(3), a district court of the 

16 United States, after notice to such person and a hearing, 

17 shall have jurisdiction to issue an order requiring such 

18 person to appear and give testimony or to appear and 

19 produce books, records, and other writings, regardless of 

20 format, that are the subject of the subpoena. Any failure 

21 to obey such order of the court may be punished by such 

22 court as a contempt thereof. 

23 (c) BEST PRACTICE GUIDELINES.— 

24 (1) IN GENERAL.—The Secretary, in consulta25 tion with the heads of other appropriate Federal 


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1 agencies, should publish and update ‘‘best practices’’ 

2 guidelines to assist persons in developing and imple3 menting, on a voluntary basis, effective export con4 trol programs in compliance with the regulations 

5 issued under this subtitle. 

6 (2) EXPORT COMPLIANCE PROGRAM.—The im7 plementation by a person of an effective export com8 pliance program and a high quality overall export 

9 compliance effort by a person should ordinarily be 

10 given weight as mitigating factors in a civil penalty 

11 action against the person under this subtitle. 

12 (d) REFERENCE TO ENFORCEMENT.—For purposes 

13 of this section, a reference to the enforcement of, or a vio14 lation of, this subtitle includes a reference to the enforce15 ment or a violation of any regulation, order, license or 

16 other authorization issued pursuant to this subtitle. 

17 (e) IMMUNITY.—A person shall not be excused from 

18 complying with any requirements under this section be19 cause of the person’s privilege against self-incrimination, 

20 but the immunity provisions of section 6002 of title 18, 

21 United States Code, shall apply with respect to any indi22 vidual who specifically claims such privilege. 

23 (f) CONFIDENTIALITY OF INFORMATION.— 

24 (1) EXEMPTIONS FROM DISCLOSURE.— 


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1 (A) IN GENERAL.—Information obtained 

2 under this subtitle may be withheld from disclo3 sure only to the extent permitted by statute, ex4 cept that information described in subpara5 graph (B) shall be withheld from public disclo6 sure and shall not be subject to disclosure 

7 under section 552(b)(3) of title 5, United 

8 States Code, unless the release of such informa9 tion is determined by the Secretary to be in the 

10 national interest. 

11 (B) INFORMATION DESCRIBED.—Informa12 tion described in this subparagraph is informa13 tion submitted or obtained in connection with 

14 an application for a license or other authoriza15 tion to export, reexport, or transfer items, en16 gage in other activities, a recordkeeping or re17 porting requirement, enforcement activity, or 

18 other operations under this subtitle, including— 

19 (i) the license application, license, or 

20 other authorization itself; 

21 (ii) classification or advisory opinion 

22 requests, and the response thereto; 

23 (iii) license determinations, and infor24 mation pertaining thereto; 


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1 (iv) information or evidence obtained 

2 in the course of any investigation; and 

3 (v) information obtained or furnished 

4 in connection with any international agree5 ment, treaty, or other obligation. 

6 (2) INFORMATION TO THE CONGRESS AND

7 GAO.— 

8 (A) IN GENERAL.—Nothing in this section 

9 shall be construed as authorizing the with10 holding of information from the Congress or 

11 from the Government Accountability Office. 

12 (B) AVAILABILITY TO THE CONGRESS.— 

13 (i) IN GENERAL.—Any information 

14 obtained at any time under any provision 

15 of the Export Administration Act of 1979 

16 (as in effect on the day before the date of 

17 the enactment of this Act and as continued 

18 in effect pursuant to the International 

19 Emergency Economic Powers Act), under 

20 the Export Administration Regulations, or 

21 under this subtitle, including any report or 

22 license application required under any such 

23 provision, shall be made available to a 

24 committee or subcommittee of Congress of 

25 appropriate jurisdiction, upon the request 


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1 of the chairman or ranking minority mem2 ber of such committee or subcommittee. 

3 (ii) PROHIBITION ON FURTHER DIS4 CLOSURE.—No such committee or sub5 committee, or member thereof, may dis6 close any information made available under 

7 clause (i), that is submitted on a confiden8 tial basis unless the full committee deter9 mines that the withholding of that infor10 mation is contrary to the national interest. 

11 (C) AVAILABILITY TO GAO.— 

12 (i) IN GENERAL.—Information de13 scribed in clause (i) of subparagraph (B) 

14 shall be subject to the limitations con15 tained in section 716 of title 31, United 

16 States Code. 

17 (ii) PROHIBITION ON FURTHER DIS18 CLOSURE.—An officer or employee of the 

19 Government Accountability Office may not 

20 disclose, except to the Congress in accord21 ance with this paragraph, any such infor22 mation that is submitted on a confidential 

23 basis or from which any individual can be 

24 identified. 

25 (3) INFORMATION SHARING.— 


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1 (A) IN GENERAL.—Any Federal official de2 scribed in section 815(a) who obtains informa3 tion that is relevant to the enforcement of this 

4 subtitle, including information pertaining to any 

5 investigation, shall furnish such information to 

6 each appropriate department, agency, or office 

7 with enforcement responsibilities under this sec8 tion to the extent consistent with the protection 

9 of intelligence, counterintelligence, and law en10 forcement sources, methods, and activities. 

11 (B) EXCEPTIONS.—The provisions of this 

12 paragraph shall not apply to information sub13 ject to the restrictions set forth in section 9 of 

14 title 13, United States Code, and return infor15 mation, as defined in subsection (b) of section 

16 6103 of the Internal Revenue Code of 1986 (26 

17 U.S.C. 6103(b)), may be disclosed only as au18 thorized by that section. 

19 (C) EXCHANGE OF INFORMATION.—The 

20 President shall ensure that the heads of depart21 ments, agencies, and offices with enforcement 

22 authorities under this subtitle, consistent with 

23 protection of law enforcement and its sources 

24 and methods— 


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1 (i) exchange any licensing and en2 forcement information with one another 

3 that is necessary to facilitate enforcement 

4 efforts under this section; and 

5 (ii) consult on a regular basis with 

6 one another and with the head of other de7 partments, agencies, and offices that ob8 tain information subject to this paragraph, 

9 in order to facilitate the exchange of such 

10 information. 

11 (D) INFORMATION SHARING WITH FED12 ERAL AGENCIES.—Licensing or enforcement in13 formation obtained under this subtitle may be 

14 shared with departments, agencies, and offices 

15 that do not have enforcement authorities under 

16 this subtitle on a case-by-case basis. 

17 (g) REPORTING REQUIREMENTS.—In the administra18 tion of this section, reporting requirements shall be de19 signed to reduce the cost of reporting, recordkeeping, and 

20 documentation to the extent consistent with effective en21 forcement and compilation of useful trade statistics. Re22 porting, recordkeeping, and documentation requirements 

23 shall be periodically reviewed and revised in the light of 

24 developments in the field of information technology. 

25 (h) CIVIL FORFEITURE.— 


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1 (1) IN GENERAL.—Any tangible items seized 

2 under subsection (a) by designated officers or em3 ployees shall be subject to forfeiture to the United 

4 States in accordance with applicable law, except that 

5 property seized shall be returned if the property 

6 owner is not found guilty of a civil or criminal viola7 tion under section 819. 

8 (2) PROCEDURES.—Any seizure or forfeiture 

9 under this subsection shall be carried out in accord10 ance with the procedures set forth in section 981 of 

11 title 18, United States Code. 

12 (i) RULE OF CONSTRUCTION.—Nothing in this Act 

13 shall be construed to limit or otherwise affect the enforce14 ment authorities of the Department of Homeland Security 

15 which may also complement those set forth herein. 

16 SEC. 822. ADMINISTRATIVE PROCEDURE. 

17 (a) IN GENERAL.—The functions exercised under 

18 this subtitle shall not be subject to sections 551, 553 

19 through 559, and 701 through 706 of title 5, United 

20 States Code. 

21 (b) ADMINISTRATIVE LAW JUDGES.—The Secretary 

22 is authorized to appoint an administrative law judge, and 

23 may designate administrative law judges from other Fed24 eral agencies who are provided pursuant to a legally au25 thorized interagency agreement with the Department of 


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1 Commerce, and consistent with the provisions of section 

2 3105 of title 5, United States Code. 

3 (c) AMENDMENTS TO REGULATIONS.—The President 

4 shall notify in advance the Committee on Banking, Hous5 ing, and Urban Affairs of the Senate and the Committee 

6 on Foreign Affairs of the House of Representatives of any 

7 proposed amendments to the Export Administration Regu8 lations with an explanation of the intent and rationale of 

9 such amendments. 

10 SEC. 823. REVIEW OF INTERAGENCY DISPUTE RESOLUTION 

11 PROCESS. 

12 (a) IN GENERAL.—The President shall review and 

13 evaluate the interagency export license referral, review, 

14 and escalation processes for dual-use items and munitions 

15 under the licensing jurisdiction of the Department of Com16 merce or any other Federal agency, as appropriate, to de17 termine whether current practices and procedures are con18 sistent with established national security and foreign pol19 icy objectives. 

20 (b) REPORT.—Not later than 180 days after the date 

21 of the enactment of this Act, the President shall submit 

22 to the appropriate congressional committees a report that 

23 contains the results of the review carried out under sub24 section (a). 


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1 (c) OPERATING COMMITTEE FOR EXPORT POLICY.— 

2 In any case in which the Operating Committee for Export 

3 Policy established by Executive Order 12981 (December 

4 5, 1991; relating to Administration of Export Controls) 

5 is meeting to conduct an interagency dispute resolution 

6 relating to applications for export licenses under the Ex7 port Administration Regulations, matters relating to jet 

8 engine hot section technology, commercial communication 

9 satellites, and emerging or foundational technology shall 

10 be decided by majority vote. 

11 (d) APPROPRIATE CONGRESSIONAL COMMITTEES

12 DEFINED.—In this section, the term ‘‘appropriate con13 gressional committees’’ means— 

14 (1) the Committee on Armed Services and the 

15 Committee on Foreign Affairs of the House of Rep16 resentatives; and 

17 (2) the Committee on Armed Services and the 

18 Committee on Banking, Housing, and Urban Affairs 

19 of the Senate. 

20 SEC. 824. COORDINATION WITH OTHER AGENCIES ON COM21 MODITY CLASSIFICATION AND REMOVAL OF 

22 EXPORT CONTROLS. 

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1 retary of Energy before taking any of the actions de2 scribed in subsection (b). 

3 (b) ACTIONS DESCRIBED.—The actions described in 

4 this subsection are the following: 

5 (1) Amending the Commerce Control List set 

6 forth in Supplement No. 1 to part 774 of the Export 

7 Administration Regulations to remove an item from 

8 the list. 

9 (2) Providing a commodity classification deter10 mination under section 748.3 of the Export Admin11 istration Regulations, including with respect to— 

12 (A) ‘‘600 series’’ items; 

13 (B) commercial communication satellites 

14 (ECCN 9x515); 

15 (C) emerging and foundational tech16 nologies identified under section 818(a); 

17 (D) ‘‘specially designed’’ items under part 

18 774 of title 15, Code of Federal Regulations; or 

19 (E) any other items that the Secretary, in 

20 coordination with the Secretary of Defense, the 

21 Secretary of State, and the Secretary of En22 ergy, identifies and mutually determines is ma23 terially significant enough to warrant inter24 agency consultation before the Secretary deter25 mines to add the item to the Commerce Control 


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1 List and provide the item with a Export Con2 trol Classification Number (ECCN). 

3 (3) Amending the Commerce Control List to re4 move any control imposed pursuant to subsection (b) 

5 of section 818 on the export, reexport, or transfer of 

6 an emerging or foundational technology identified 

7 under subsection (a) of that section. 

8 (4) Amending the Export Administration Regu9 lations to expand the scope or application of a li10 cense exception authorized by section 740 of the Ex11 port Administration Regulations. 

12 SEC. 825. ANNUAL REPORT TO CONGRESS. 

13 (a) IN GENERAL.—The President shall submit to 

14 Congress, by December 31 of each year, a report on the 

15 implementation of this subtitle during the preceding fiscal 

16 year. The report shall include a review of— 

17 (1) the effect of controls imposed under this 

18 subtitle on exports, reexports, and transfers of items 

19 in addressing threats to the national security or for20 eign policy of the United States, including a descrip21 tion of licensing processing times; 

22 (2) the impact of such controls on the scientific 

23 and technological leadership of the United States; 

24 (3) the consistency with such controls of export 

25 controls imposed by other countries; 


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1 (4) efforts to provide exporters with compliance 

2 assistance, including specific actions to assist small3 and medium-sized businesses; 

4 (5) a summary of regulatory changes from the 

5 prior fiscal year; 

6 (6) a summary of export enforcement actions, 

7 including of actions taken to implement end-use 

8 monitoring of dual-use, military, and other items 

9 subject to the Export Administration Regulations; 

10 (7) a summary of approved license applications 

11 to proscribed persons; 

12 (8) efforts undertaken within the previous year 

13 to comply with the requirements of section 819, in14 cluding any critical technologies identified under 

15 such section and how or whether such critical tech16 nologies were controlled for export; and 

17 (9) a summary of industrial base assessments 

18 conducted during the previous year by the Depart19 ment of Commerce, including with respect to coun20 terfeit electronics, foundational technologies, and 

21 other research and analysis of critical technologies 

22 and industrial capabilities of key defense-related sec23 tors. 


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1 (b) FORM.—The report required under subsection (a) 

2 shall be submitted in unclassified form, but may contain 

3 a classified annex. 

4 SEC. 826. REPEAL. 

5 (a) IN GENERAL.—The Export Administration Act of 

6 1979 (50 U.S.C. App. 2401 et seq.) (as continued in effect 

7 pursuant to the International Emergency Economic Pow8 ers Act) is repealed. 

9 (b) IMPLEMENTATION.—The President shall imple10 ment the amendment made by subsection (a) by exercising 

11 the authorities of the President under the International 

12 Emergency Economic Powers Act (50 U.S.C. 1701 et 

13 seq.). 

14 SEC. 827. EFFECT ON OTHER ACTS. 

15 (a) IN GENERAL.—Except as otherwise provided in 

16 this subtitle, nothing contained in this subtitle shall be 

17 construed to modify, repeal, supersede, or otherwise affect 

18 the provisions of any other laws authorizing control over 

19 exports, reexports, or transfers of any item, or activities 

20 of United States persons subject to the Export Adminis21 tration Regulations. 

22 (b) COORDINATION OF CONTROLS.— 

23 (1) IN GENERAL.—The authority granted to the 

24 President under this subtitle shall be exercised in 

25 such manner so as to achieve effective coordination 


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1 with all export control and sanctions authorities ex2 ercised by Federal departments and agencies dele3 gated with authority under this subtitle, particularly 

4 the Department of State, the Department of the 

5 Treasury, and the Department of Energy. 

6 (2) SENSE OF CONGRESS.—It is the sense of 

7 Congress that in order to achieve effective coordina8 tion described in paragraph (1), such Federal de9 partments and agencies— 

10 (A) should continuously work to create en11 forceable regulations with respect to the export, 

12 reexport, and transfer by United States and 

13 foreign persons of commodities, software, tech14 nology, and services to various end uses and 

15 end users for foreign policy and national secu16 rity reasons; 

17 (B) should regularly work to reduce com18 plexity in the system, including complexity 

19 caused merely by the existence of structural, 

20 definitional, and other non-policy based dif21 ferences between and among different export 

22 control and sanctions systems; and 

23 (C) should coordinate controls on items ex24 ported, reexported, or transferred in connection 

25 with a foreign military sale under chapter 2 of 


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1 the Arms Export Control Act or a commercial 

2 sale under section 38 of the Arms Export Con3 trol Act to reduce as much unnecessary admin4 istrative burden as possible that is a result of 

5 differences between the exercise of those two 

6 authorities. 

7 (c) NONPROLIFERATION CONTROLS.—Nothing in 

8 this subtitle shall be construed to supersede the proce9 dures published by the President pursuant to section 

10 309(c) of the Nuclear Non-Proliferation Act of 1978. 

11 SEC. 828. TRANSITION PROVISIONS. 

12 (a) IN GENERAL.—All delegations, rules, regulations, 

13 orders, determinations, licenses, or other forms of admin14 istrative action that have been made, issued, conducted, 

15 or allowed to become effective under the Export Adminis16 tration Act of 1979 (as in effect on the day before the 

17 date of the enactment of this Act and as continued in ef18 fect pursuant to the International Emergency Economic 

19 Powers Act), or the Export Administration Regulations, 

20 and are in effect as of the date of the enactment of this 

21 Act, shall continue in effect according to their terms until 

22 modified, superseded, set aside, or revoked under the au23 thority of this subtitle. 

24 (b) ADMINISTRATIVE AND JUDICIAL PRO25 CEEDINGS.—This subtitle shall not affect any administraVerDate Sep 11 2014 23:20 Jun 27, 2018 Jkt 079200 PO 00000 Frm 00134 Fmt 6652 Sfmt 6201 E:\BILLS\H5841.PCS H5841

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1 tive or judicial proceedings commenced, or any applica2 tions for licenses made, under the Export Administration 

3 Act of 1979 (as in effect on the day before the date of 

4 the enactment of this Act and as continued in effect pur5 suant to the International Emergency Economic Powers 

6 Act), or the Export Administration Regulations. 

7 (c) CERTAIN DETERMINATIONS AND REFERENCES.— 

8 (1) STATE SPONSORS OF TERRORISM.—Any de9 termination that was made under section 6(j) of the 

10 Export Administration Act of 1979 (as in effect on 

11 the day before the date of the enactment of this Act 

12 and as continued in effect pursuant to the Inter13 national Emergency Economic Powers Act) shall 

14 continue in effect as if the determination had been 

15 made under section 814(c) of this Act. 

16 (2) REFERENCE.—Any reference in any other 

17 provision of law to a country the government of 

18 which the Secretary of State has determined, for 

19 purposes of section 6(j) of the Export Administra20 tion Act of 1979 (as in effect on the day before the 

21 date of the enactment of this Act and as continued 

22 in effect pursuant to the International Emergency 

23 Economic Powers Act), is a government that has re24 peatedly provided support for acts of international 

25 terrorism shall be deemed to refer to a country the 


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1 government of which the Secretary of State has de2 termined, for purposes of section 814(c), is a gov3 ernment that has repeatedly provided support for 

4 acts of international terrorism. 

5 Subtitle B—Anti-Boycott Act of 

6 2018 

7 SEC. 831. SHORT TITLE. 

8 This subtitle may be cited as the ‘‘Anti-Boycott Act 

9 of 2018’’. 

10 SEC. 832. STATEMENT OF POLICY. 

11 Congress declares it is the policy of the United 

12 States— 

13 (1) to oppose restrictive trade practices or boy14 cotts fostered or imposed by any foreign country 

15 against other countries friendly to the United States 

16 or against any United States person; 

17 (2) to encourage and, in specified cases, require 

18 United States persons engaged in the export of 

19 goods or technology or other information to refuse to 

20 take actions, including furnishing information or en21 tering into or implementing agreements, which have 

22 the effect of furthering or supporting the restrictive 

23 trade practices or boycotts fostered or imposed by 

24 any foreign country against a country friendly to the 

25 United States or any United States person; and 


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1 (3) to foster international cooperation and the 

2 development of international rules and institutions 

3 to assure reasonable access to world supplies. 

4 SEC. 833. FOREIGN BOYCOTTS. 

5 (a) PROHIBITIONS AND EXCEPTIONS.— 

6 (1) PROHIBITIONS.—For the purpose of imple7 menting the policies set forth in section 832, the 

8 President shall issue regulations prohibiting any 

9 United States person, with respect to that person’s 

10 activities in the interstate or foreign commerce of 

11 the United States, from taking or knowingly agree12 ing to take any of the following actions with intent 

13 to comply with, further, or support any boycott fos14 tered or imposed by any foreign country, against a 

15 country which is friendly to the United States and 

16 which is not itself the object of any form of boycott 

17 pursuant to United States law or regulation: 

18 (A) Refusing, or requiring any other per19 son to refuse, to do business with or in the boy20 cotted country, with any business concern orga21 nized under the laws of the boycotted country, 

22 with any national or resident of the boycotted 

23 country, or with any other person, pursuant to 

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1 try. The mere absence of a business relationship 

2 with or in the boycotted country with any busi3 ness concern organized under the laws of the 

4 boycotted country, with any national or resident 

5 of the boycotted country, or with any other per6 son, does not indicate the existence of the in7 tent required to establish a violation of regula8 tions issued to carry out this subparagraph. 

9 (B) Refusing, or requiring any other per10 son to refuse, to employ or otherwise discrimi11 nating against any United States person on the 

12 basis of race, religion, sex, or national origin of 

13 that person or of any owner, officer, director, or 

14 employee of such person. 

15 (C) Furnishing information with respect to 

16 the race, religion, sex, or national origin of any 

17 United States person or of any owner, officer, 

18 director, or employee of such person. 

19 (D) Furnishing information about whether 

20 any person has, has had, or proposes to have 

21 any business relationship (including a relation22 ship by way of sale, purchase, legal or commer23 cial representation, shipping or other transport, 

24 insurance, investment, or supply) with or in the 

25 boycotted country, with any business concern 


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1 organized under the laws of the boycotted coun2 try, with any national or resident of the boy3 cotted country, or with any other person which 

4 is known or believed to be restricted from hav5 ing any business relationship with or in the boy6 cotting country. Nothing in this subparagraph 

7 shall prohibit the furnishing of normal business 

8 information in a commercial context as defined 

9 by the Secretary. 

10 (E) Furnishing information about whether 

11 any person is a member of, has made contribu12 tions to, or is otherwise associated with or in13 volved in the activities of any charitable or fra14 ternal organization which supports the boy15 cotted country. 

16 (F) Paying, honoring, confirming, or other17 wise implementing a letter of credit which con18 tains any condition or requirement compliance 

19 with which is prohibited by regulations issued 

20 pursuant to this paragraph, and no United 

21 States person shall, as a result of the applica22 tion of this paragraph, be obligated to pay or 

23 otherwise honor or implement such letter of 

24 credit. 


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1 (2) EXCEPTIONS.—Regulations issued pursuant 

2 to paragraph (1) shall provide exceptions for— 

3 (A) complying or agreeing to comply with 

4 requirements— 

5 (i) prohibiting the import of goods or 

6 services from the boycotted country or 

7 goods produced or services provided by any 

8 business concern organized under the laws 

9 of the boycotted country or by nationals or 

10 residents of the boycotted country; or 

11 (ii) prohibiting the shipment of goods 

12 to the boycotting country on a carrier of 

13 the boycotted country, or by a route other 

14 than that prescribed by the boycotting 

15 country or the recipient of the shipment; 

16 (B) complying or agreeing to comply with 

17 import and shipping document requirements 

18 with respect to the country of origin, the name 

19 of the carrier and route of shipment, the name 

20 of the supplier of the shipment or the name of 

21 the provider of other services, except that no in22 formation knowingly furnished or conveyed in 

23 response to such requirements may be stated in 

24 negative, blacklisting, or similar exclusionary 

25 terms, other than with respect to carriers or 


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1 route of shipment as may be permitted by such 

2 regulations in order to comply with pre3 cautionary requirements protecting against war 

4 risks and confiscation; 

5 (C) complying or agreeing to comply in the 

6 normal course of business with the unilateral 

7 and specific selection by a boycotting country, 

8 or national or resident thereof, of carriers, in9 surers, suppliers of services to be performed 

10 within the boycotting country or specific goods 

11 which, in the normal course of business, are 

12 identifiable by source when imported into the 

13 boycotting country; 

14 (D) complying or agreeing to comply with 

15 export requirements of the boycotting country 

16 relating to shipments or transshipments of ex17 ports to the boycotted country, to any business 

18 concern of or organized under the laws of the 

19 boycotted country, or to any national or resi20 dent of the boycotted country; 

21 (E) compliance by an individual or agree22 ment by an individual to comply with the immi23 gration or passport requirements of any country 

24 with respect to such individual or any member 

25 of such individual’s family or with requests for 


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1 information regarding requirements of employ2 ment of such individual within the boycotting 

3 country; and 

4 (F) compliance by a United States person 

5 resident in a foreign country or agreement by 

6 such person to comply with the laws of that 

7 country with respect to his activities exclusively 

8 therein, and such regulations may contain ex9 ceptions for such resident complying with the 

10 laws or regulations of that foreign country gov11 erning imports into such country of 

12 trademarked, trade named, or similarly specifi13 cally identifiable products, or components of 

14 products for his own use, including the per15 formance of contractual services within that 

16 country, as may be defined by such regulations. 

17 (3) SPECIAL RULES.—Regulations issued pur18 suant to paragraphs (2)(C) and (2)(F) shall not pro19 vide exceptions from paragraphs (1)(B) and (1)(C). 

20 (4) RULE OF CONSTRUCTION.—Nothing in this 

21 subsection may be construed to supersede or limit 

22 the operation of the antitrust or civil rights laws of 

23 the United States. 

24 (5) APPLICATION.—This section shall apply to 

25 any transaction or activity undertaken, by or 


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1 through a United States person or any other person, 

2 with intent to evade the provisions of this section as 

3 implemented by the regulations issued pursuant to 

4 this subsection, and such regulations shall expressly 

5 provide that the exceptions set forth in paragraph 

6 (2) shall not permit activities or agreements (ex7 pressed or implied by a course of conduct, including 

8 a pattern of responses) otherwise prohibited, which 

9 are not within the intent of such exceptions. 

10 (b) FOREIGN POLICY CONTROLS.— 

11 (1) IN GENERAL.—In addition to the regula12 tions issued pursuant to subsection (a), regulations 

13 issued under subtitle A to carry out the policies set 

14 forth in section 812(1)(D) shall implement the poli15 cies set forth in this section. 

16 (2) REQUIREMENTS.—Such regulations shall 

17 require that any United States person receiving a re18 quest for the furnishing of information, the entering 

19 into or implementing of agreements, or the taking of 

20 any other action referred to in subsection (a) shall 

21 report that fact to the Secretary, together with such 

22 other information concerning such request as the 

23 Secretary may require for such action as the Sec24 retary considers appropriate for carrying out the 

25 policies of that section. Such person shall also report 


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1 to the Secretary whether such person intends to 

2 comply and whether such person has complied with 

3 such request. Any report filed pursuant to this para4 graph shall be made available promptly for public in5 spection and copying, except that information re6 garding the quantity, description, and value of any 

7 goods or technology to which such report relates 

8 may be kept confidential if the Secretary determines 

9 that disclosure thereof would place the United States 

10 person involved at a competitive disadvantage. The 

11 Secretary shall periodically transmit summaries of 

12 the information contained in such reports to the Sec13 retary of State for such action as the Secretary of 

14 State, in consultation with the Secretary, considers 

15 appropriate for carrying out the policies set forth in 

16 section 832. 

17 (c) PREEMPTION.—The provisions of this section and 

18 the regulations issued pursuant thereto shall preempt any 

19 law, rule, or regulation of any of the several States or the 

20 District of Columbia, or any of the territories or posses21 sions of the United States, or of any governmental subdivi22 sion thereof, which law, rule, or regulation pertains to par23 ticipation in, compliance with, implementation of, or the 

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1 tices or boycotts fostered or imposed by foreign countries 

2 against other countries friendly to the United States. 

3 SEC. 834. ENFORCEMENT. 

4 (a) CRIMINAL PENALTY.—A person who willfully 

5 commits, willfully attempts to commit, or willfully con6 spires to commit, or aids or abets in the commission of, 

7 an unlawful act section 833— 

8 (1) shall, upon conviction, be fined not more 

9 than $1,000,000; or 

10 (2) if a natural person, may be imprisoned for 

11 not more than 20 years, or both. 

12 (b) CIVIL PENALTIES.—The President may impose 

13 the following civil penalties on a person who violates sec14 tion 833 or any regulation issued under this subtitle: 

15 (1) A fine of not more than $300,000 or an 

16 amount that is twice the value of the transaction 

17 that is the basis of the violation with respect to 

18 which the penalty is imposed, whichever is greater. 

19 (2) Revocation of a license issued under title I 

20 to the person. 

21 (3) A prohibition on the person’s ability to ex22 port, reexport, or transfer any items controlled 

23 under subtitle A. 

24 (c) PROCEDURES.—Any civil penalty or administra25 tive sanction (including any suspension or revocation of 


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1 authority to export) under this section may be imposed 

2 only after notice and opportunity for an agency hearing 

3 on the record in accordance with sections 554 through 557 

4 of title 5, United States Code, and shall be subject to judi5 cial review in accordance with chapter 7 of such title. 

6 (d) STANDARDS FOR LEVELS OF CIVIL PENALTY.— 

7 The President may by regulation provide standards for es8 tablishing levels of civil penalty under this section based 

9 upon factors such as the seriousness of the violation, the 

10 culpability of the violator, and the violator’s record of co11 operation with the Government in disclosing the violation. 

12 Subtitle C—Sanctions Regarding 

13 Missile Proliferation and Chem14 ical and Biological Weapons 

15 Proliferation 

16 SEC. 841. MISSILE PROLIFERATION CONTROL VIOLATIONS. 

17 (a) VIOLATIONS BY UNITED STATES PERSONS.— 

18 (1) SANCTIONS.— 

19 (A) SANCTIONABLE ACTIVITY.—The Presi20 dent shall impose the applicable sanctions de21 scribed in subparagraph (B) if the President 

22 determines that a United States person know23 ingly— 

24 (i) exports, reexports, or transfers of 

25 any item on the MTCR Annex, in violation 


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1 of the provisions of section 38 (22 U.S.C. 

2 2778) or chapter 7 of the Arms Export 

3 Control Act, subtitle A, or any regulations 

4 or orders issued under any such provisions; 

5 or 

6 (ii) conspires to or attempts to engage 

7 in such export, reexport, or transfer. 

8 (B) SANCTIONS.—The sanctions that apply 

9 to a United States person under subparagraph 

10 (A) are the following: 

11 (i) If the item on the MTCR Annex 

12 involved in the export, reexport, or transfer 

13 is missile equipment or technology within 

14 category II of the MTCR Annex, then the 

15 President shall deny to such United States 

16 person, for a period of 2 years, licenses for 

17 the transfer of missile equipment or tech18 nology controlled under subtitle A. 

19 (ii) If the item on the MTCR Annex 

20 involved in the export, reexport, or transfer 

21 is missile equipment or technology within 

22 category I of the MTCR Annex, then the 

23 President shall deny to such United States 

24 person, for a period of not less than 2 


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1 years, all licenses for items the transfer of 

2 which is controlled under subtitle A. 

3 (2) DISCRETIONARY SANCTIONS.—In the case 

4 of any determination referred to in paragraph (1), 

5 the President may pursue any other appropriate 

6 penalties under section 820. 

7 (3) WAIVER.—The President may waive the im8 position of sanctions under paragraph (1) on a per9 son with respect to a product or service if the Presi10 dent certifies to the Congress that— 

11 (A) the product or service is essential to 

12 the national security of the United States; and 

13 (B) such person is a sole source supplier of 

14 the product or service, the product or service is 

15 not available from any alternative reliable sup16 plier, and the need for the product or service 

17 cannot be met in a timely manner by improved 

18 manufacturing processes or technological devel19 opments. 

20 (b) TRANSFERS OF MISSILE EQUIPMENT OR TECH21 NOLOGY BY FOREIGN PERSONS.— 

22 (1) SANCTIONS.— 

23 (A) SANCTIONABLE ACTIVITY.—Subject to 

24 paragraphs (3) through (7), the President shall 

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1 graph (B) on a foreign person if the Presi2 dent— 

3 (i) determines that a foreign person 

4 knowingly— 

5 (I) exports, reexports, or trans6 fers any MTCR equipment or tech7 nology that contributes to the design, 

8 development, or production of missiles 

9 in a country that is not an MTCR ad10 herent and would be, if it were United 

11 States-origin equipment or technology, 

12 subject to the jurisdiction of the 

13 United States under subtitle A; 

14 (II) conspires to or attempts to 

15 engage in such export, reexport, or 

16 transfer; or 

17 (III) facilitates such export, reex18 port, or transfer by any other person; 

19 or 

20 (ii) has made a determination with re21 spect to the foreign person under section 

22 73(a) of the Arms Export Control Act. 

23 (B) SANCTIONS.—The sanctions that apply 

24 to a foreign person under subparagraph (A) are 

25 the following: 


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1 (i) If the item involved in the export, 

2 reexport, or transfer is within category II 

3 of the MTCR Annex, then the President 

4 shall deny, for a period of 2 years, licenses 

5 for the transfer to such foreign person of 

6 missile equipment or technology the trans7 fer of which is controlled under subtitle A. 

8 (ii) If the item involved in the export, 

9 reexport, or transfer is within category I of 

10 the MTCR Annex, then the President shall 

11 deny, for a period of not less than 2 years, 

12 licenses for the transfer to such foreign 

13 person of items the transfer of which is 

14 controlled under subtitle A. 

15 (2) INAPPLICABILITY WITH RESPECT TO MTCR 

16 ADHERENTS.—Paragraph (1) does not apply with 

17 respect to— 

18 (A) any export, reexport, or transfer that 

19 is authorized by the laws of an MTCR adher20 ent, if such authorization is not obtained by 

21 misrepresentation or fraud; or 

22 (B) any export, reexport, or transfer of an 

23 item to an end user in a country that is an 

24 MTCR adherent. 


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1 (3) EFFECT OF ENFORCEMENT ACTIONS BY

2 MTCR ADHERENTS.—Sanctions set forth in para3 graph (1) may not be imposed under this subsection 

4 on a person with respect to acts described in such 

5 paragraph or, if such sanctions are in effect against 

6 a person on account of such acts, such sanctions 

7 shall be terminated, if an MTCR adherent is taking 

8 judicial or other enforcement action against that 

9 person with respect to such acts, or that person has 

10 been found by the government of an MTCR adher11 ent to be innocent of wrongdoing with respect to 

12 such acts. 

13 (4) WAIVER AND REPORT TO CONGRESS.— 

14 (A) WAIVER AUTHORITY.—The President 

15 may waive the application of paragraph (1) to 

16 a foreign person if the President determines 

17 that such waiver is essential to the national se18 curity of the United States. 

19 (B) NOTIFICATION AND REPORT TO CON20 GRESS.—In the event that the President decides 

21 to apply the waiver described in subparagraph 

22 (A), the President shall so notify the appro23 priate congressional committees not less than 

24 20 working days before issuing the waiver. 

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1 ticulating the rationale and circumstances 

2 which led the President to apply the waiver. 

3 (5) ADDITIONAL WAIVER.—The President may 

4 waive the imposition of sanctions under paragraph 

5 (1) on a person with respect to a product or service 

6 if the President certifies to the appropriate congres7 sional committees that— 

8 (A) the product or service is essential to 

9 the national security of the United States; and 

10 (B) such person is a sole source supplier of 

11 the product or service, the product or service is 

12 not available from any alternative reliable sup13 plier, and the need for the product or service 

14 cannot be met in a timely manner by improved 

15 manufacturing processes or technological devel16 opments. 

17 (6) EXCEPTIONS.—The President shall not 

18 apply the sanction under this subsection prohibiting 

19 the importation of the products of a foreign per20 son— 

21 (A) in the case of procurement of defense 

22 articles or defense services— 

23 (i) under existing contracts or sub24 contracts, including the exercise of options 

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1 ments essential to the national security of 

2 the United States; 

3 (ii) if the President determines that 

4 the person to which the sanctions would be 

5 applied is a sole source supplier of the de6 fense articles or defense services, that the 

7 defense articles or defense services are es8 sential to the national security of the 

9 United States, and that alternative sources 

10 are not readily or reasonably available; or 

11 (iii) if the President determines that 

12 such articles or services are essential to the 

13 national security of the United States 

14 under defense coproduction agreements or 

15 NATO Programs of Cooperation; 

16 (B) to products or services provided under 

17 contracts entered into before the date on which 

18 the President publishes his intention to impose 

19 the sanctions; or 

20 (C) to— 

21 (i) spare parts; 

22 (ii) component parts, but not finished 

23 products, essential to United States prod24 ucts or production; 


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1 (iii) routine services and maintenance 

2 of products, to the extent that alternative 

3 sources are not readily or reasonably avail4 able; or 

5 (iv) information and technology essen6 tial to United States products or produc7 tion. 

8 (c) DEFINITIONS.—In this section: 

9 (1) APPROPRIATE CONGRESSIONAL COMMIT10 TEES.—The term ‘‘appropriate congressional com11 mittees’’ means— 

12 (A) the Committee on Foreign Affairs of 

13 the House of Representatives; and 

14 (B) the Committee on Foreign Relations 

15 and the Committee on Banking, Housing, and 

16 Urban Affairs of the Senate. 

17 (2) DEFENSE ARTICLES; DEFENSE SERVICES.— 

18 The terms ‘‘defense articles’’ and ‘‘defense services’’ 

19 mean those items on the United States Munitions 

20 List as defined in section 47(7) of the Arms Export 

21 Control Act (22 U.S.C. 2794 note). 

22 (3) MISSILE.—The term ‘‘missile’’ means a cat23 egory I system as defined in the MTCR Annex. 

24 (4) MISSILE TECHNOLOGY CONTROL REGIME; 

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1 gime’’ or ‘‘MTCR’’ means the policy statement, be2 tween the United States, the United Kingdom, the 

3 Federal Republic of Germany, France, Italy, Can4 ada, and Japan, announced on April 16, 1987, to re5 strict sensitive missile-relevant transfers based on 

6 the MTCR Annex, and any amendments thereto. 

7 (5) MTCR ADHERENT.—The term ‘‘MTCR ad8 herent’’ means a country that participates in the 

9 MTCR or that, pursuant to an international under10 standing to which the United States is a party, con11 trols MTCR equipment or technology in accordance 

12 with the criteria and standards set forth in the 

13 MTCR. 

14 (6) MTCR ANNEX.—The term ‘‘MTCR Annex’’ 

15 means the Guidelines and Equipment and Tech16 nology Annex of the MTCR, and any amendments 

17 thereto. 

18 (7) MISSILE EQUIPMENT OR TECHNOLOGY; 

19 MTCR EQUIPMENT OR TECHNOLOGY.—The terms 

20 ‘‘missile equipment or technology’’ and ‘‘MTCR 

21 equipment or technology’’ mean those items listed in 

22 category I or category II of the MTCR Annex. 

23 SEC. 842. CHEMICAL AND BIOLOGICAL WEAPONS PRO24 LIFERATION SANCTIONS. 

25 (a) IMPOSITION OF SANCTIONS.— 


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1 (1) DETERMINATION BY THE PRESIDENT.—Ex2 cept as provided in subsection (b)(2), the President 

3 shall impose the sanction described in subsection (c) 

4 if the President determines that a foreign person has 

5 knowingly and materially contributed— 

6 (A) through the export from the United 

7 States of any item that is subject to the juris8 diction of the United States under this subtitle; 

9 or 

10 (B) through the export from any other 

11 country of any item that would be, if they were 

12 United States goods or technology, subject to 

13 the jurisdiction of the United States under this 

14 subtitle, 

15 to the efforts by any foreign country, project, or en16 tity described in paragraph (2) to use, develop, 

17 produce, stockpile, or otherwise acquire chemical or 

18 biological weapons. 

19 (2) COUNTRIES, PROJECTS, OR ENTITIES RE20 CEIVING ASSISTANCE.—Paragraph (1) applies in the 

21 case of— 

22 (A) any foreign country that the President 

23 determines has, at any time after January 1, 

24 1980— 


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1 (i) used chemical or biological weap2 ons in violation of international law; 

3 (ii) used lethal chemical or biological 

4 weapons against its own nationals; or 

5 (iii) made substantial preparations to 

6 engage in the activities described in clause 

7 (i) or (ii); 

8 (B) any foreign country whose government 

9 is determined for purposes of section 914(c) to 

10 be a government that has repeatedly provided 

11 support for acts of international terrorism; or 

12 (C) any other foreign country, project, or 

13 entity designated by the President for purposes 

14 of this section. 

15 (3) PERSONS AGAINST WHICH SANCTIONS ARE

16 TO BE IMPOSED.—A sanction shall be imposed pur17 suant to paragraph (1) on— 

18 (A) the foreign person with respect to 

19 which the President makes the determination 

20 described in that paragraph; 

21 (B) any successor entity to that foreign 

22 person; and 

23 (C) any foreign person that is a parent, 

24 subsidiary, or affiliate of that foreign person if 

25 that parent, subsidiary, or affiliate knowingly 


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1 assisted in the activities which were the basis of 

2 that determination. 

3 (b) CONSULTATIONS WITH AND ACTIONS BY FOR4 EIGN GOVERNMENT OF JURISDICTION.— 

5 (1) CONSULTATIONS.—If the President makes 

6 the determinations described in subsection (a)(1) 

7 with respect to a foreign person, the Congress urges 

8 the President to initiate consultations immediately 

9 with the government with primary jurisdiction over 

10 that foreign person with respect to the imposition of 

11 a sanction pursuant to this section. 

12 (2) ACTIONS BY GOVERNMENT OF JURISDIC13 TION.—In order to pursue such consultations with 

14 that government, the President may delay imposition 

15 of a sanction pursuant to this section for a period 

16 of up to 90 days. Following such consultations, the 

17 President shall impose the sanction unless the Presi18 dent determines and certifies to the appropriate con19 gressional committees that the Government has 

20 taken specific and effective actions, including appro21 priate penalties, to terminate the involvement of the 

22 foreign person in the activities described in sub23 section (a)(1). The President may delay imposition 

24 of the sanction for an additional period of up to 90 

25 days if the President determines and certifies to the 


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1 Congress that the government is in the process of 

2 taking the actions described in the preceding sen3 tence. 

4 (3) REPORT TO CONGRESS.—The President 

5 shall report to the appropriate congressional commit6 tees, not later than 90 days after making a deter7 mination under subsection (a)(1), on the status of 

8 consultations with the appropriate government under 

9 this subsection, and the basis for any determination 

10 under paragraph (2) of this subsection that such 

11 government has taken specific corrective actions. 

12 (c) SANCTION.— 

13 (1) DESCRIPTION OF SANCTION.—The sanction 

14 to be imposed pursuant to subsection (a)(1) is, ex15 cept as provided that the United States Government 

16 shall not procure, or enter into any contract for the 

17 procurement of, any goods or services from any per18 son described in subsection (a)(3). 

19 (2) EXCEPTIONS.—The President shall not be 

20 required to apply or maintain a sanction under this 

21 section— 

22 (A) in the case of procurement of defense 

23 articles or defense services— 

24 (i) under existing contracts or sub25 contracts, including the exercise of options 


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1 for production quantities to satisfy United 

2 States operational military requirements; 

3 (ii) if the President determines that 

4 the person or other entity to which the 

5 sanctions would otherwise be applied is a 

6 sole source supplier of the defense articles 

7 or defense services, that the defense arti8 cles or defense services are essential, and 

9 that alternative sources are not readily or 

10 reasonably available; or 

11 (iii) if the President determines that 

12 such articles or services are essential to the 

13 national security under defense coproduc14 tion agreements; 

15 (B) to products or services provided under 

16 contracts entered into before the date on which 

17 the President publishes his intention to impose 

18 sanctions; 

19 (C) to— 

20 (i) spare parts; 

21 (ii) component parts, but not finished 

22 products, essential to United States prod23 ucts or production; or 

24 (iii) routine servicing and mainte25 nance of products, to the extent that alterVerDate Sep 11 2014 23:20 Jun 27, 2018 Jkt 079200 PO 00000 Frm 00160 Fmt 6652 Sfmt 6201 E:\BILLS\H5841.PCS H5841

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1 native sources are not readily or reason2 ably available; 

3 (D) to information and technology essen4 tial to United States products or production; or 

5 (E) to medical or other humanitarian 

6 items. 

7 (d) TERMINATION OF SANCTIONS.—A sanction im8 posed pursuant to this section shall apply for a period of 

9 at least 12 months following the imposition of one sanction 

10 and shall cease to apply thereafter only if the President 

11 determines and certifies to the appropriate congressional 

12 committees that reliable information indicates that the 

13 foreign person with respect to which the determination 

14 was made under subsection (a)(1) has ceased to aid or 

15 abet any foreign government, project, or entity in its ef16 forts to acquire chemical or biological weapons capability 

17 as described in that subsection. 

18 (e) WAIVER.— 

19 (1) CRITERION FOR WAIVER.—The President 

20 may waive the application of any sanction imposed 

21 on any person pursuant to this section if the Presi22 dent determines and certifies to the appropriate con23 gressional committees that such waiver is important 

24 to the national security interests of the United 

25 States. 


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1 (2) NOTIFICATION OF AND REPORT TO CON2 GRESS.—If the President decides to exercise the 

3 waiver authority provided in paragraph (1), the 

4 President shall so notify the appropriate congres5 sional committees not less than 20 days before the 

6 waiver takes effect. Such notification shall include a 

7 report fully articulating the rationale and cir8 cumstances which led the President to exercise the 

9 waiver authority. 

10 (f) DEFINITIONS.—In this section: 

11 (1) APPROPRIATE CONGRESSIONAL COMMIT12 TEES.—The term ‘‘appropriate congressional com13 mittees’’ means— 

14 (A) the Committee on Foreign Affairs of 

15 the House of Representatives; and 

16 (B) the Committee on Foreign Relations 

17 and the Committee on Banking, Housing, and 

18 Urban Affairs of the Senate. 

19 (2) DEFENSE ARTICLES; DEFENSE SERVICES.— 

20 The terms ‘‘defense articles’’ and ‘‘defense services’’ 

21 mean those items on the United States Munitions 

22 List or are otherwise controlled under the Arms Ex23 port Control Act. 


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1 Subtitle D—Administrative 

2 Authorities 

3 SEC. 851. UNDER SECRETARY OF COMMERCE FOR INDUS4 TRY AND SECURITY. 

5 (a) IN GENERAL.—The President shall appoint, by 

6 and with the advice and consent of the Senate, an Under 

7 Secretary of Commerce for Industry and Security who 

8 shall carry out all the functions of the Secretary under 

9 this title and such other provisions of law that relate to 

10 the implementation of the dual-use export system. 

11 (b) ASSISTANT SECRETARIES OF COMMERCE.—The 

12 President shall appoint, by and with the advice and con13 sent of the Senate, two Assistant Secretaries of Commerce 

14 to assist the Under Secretary in carrying out the functions 

15 described in paragraph (1). 

Passed the House of Representatives June 26, 2018. 

Attest: KAREN L. HAAS, 

Clerk. 


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Calendar No. 492 

115TH CONGRESS 

2D SESSION H. R. 5841 

AN ACT 

To modernize and strengthen the Committee on 

poses. types of foreign investment, and for other pursecurity of the United States posed by certain effectively guard against the risk to the national Foreign Investment in the United States to more 

JUNE 27, 2018 

Received; read twice and placed on the calendar 


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