I 

118TH CONGRESS 

1ST SESSION H. R. 499 

To amend the Securities Exchange Act of 1934 to require certain additional 

annual disclosures by public companies and exchange-traded funds investing in companies with ties to the People’s Republic of China, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 25, 2023 

Mr. FALLON (for himself, Mr. ELLZEY, Mr. JACKSON of Texas, and Mr. 

AMODEI) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To amend the Securities Exchange Act of 1934 to require 

certain additional annual disclosures by public companies 

and exchange-traded funds investing in companies with 

ties to the People’s Republic of China, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Securing American 

5 Families and Enterprises from People’s Republic of China 

6 Investments Act’’ or the ‘‘SAFE from PRC Investments 

7 Act’’. 


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1 SEC. 2. ADDITIONAL DISCLOSURES TO PROTECT AMERICAN 

2 INVESTORS AND BUSINESSES. 

3 Section 13 of the Securities Exchange Act of 1934 

4 (15 U.S.C. 78m) is amended by adding at the end the 

5 following: 

6 ‘‘(s) ADDITIONAL DISCLOSURES TO PROTECT AMER7 ICAN INVESTORS AND BUSINESSES.— 

8 ‘‘(1) IN GENERAL.—Each covered issuer that is 

9 required to file an annual report under section 13(a) 

10 or 15(d) shall disclose in that report the following: 

11 ‘‘(A) Whether a senior official of the 

12 national- or provincial-level governments of the 

13 People’s Republic of China (‘PRC’) sits on the 

14 board of directors of the issuer or any sub15 sidiary of the issuer. 

16 ‘‘(B) Whether executive-level employees, 

17 senior directors, and board members of the 

18 issuer are members of the Communist Party of 

19 China. 

20 ‘‘(C) Whether executive-level employees, 

21 senior directors, and board members of the 

22 issuer have immediate family members that are 

23 senior officials of the Communist Party of 

24 China or the Government of the People’s Re25 public of China. 


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1 ‘‘(D) Whether the issuer has a party 

2 branch or committee as part of the issuer’s cor3 porate structure. 

4 ‘‘(E) With respect to the operations of the 

5 issuer located in the PRC— 

6 ‘‘(i) the amount of cash held; 

7 ‘‘(ii) any limits imposed by the Com8 munist Party of China or the Government 

9 of the People’s Republic of China on the 

10 ability to take such cash out of the coun11 try; and 

12 ‘‘(iii) disclosure of investments, assets 

13 and liabilities, technology licensed or trans14 ferred, and financing or debt obligations 

15 involving PRC operations or from a PRC 

16 entity. 

17 ‘‘(F) The number of times executive-level 

18 employees of the issuer interact with senior offi19 cials of the Communist Party of China and the 

20 costs of those meetings and any transfer of 

21 goods, money, or services between issuer’s em22 ployees. 

23 ‘‘(G) The amount the issuer has expended 

24 on operations in the People’s Republic of China, 

25 both in total and for the prior fiscal year. 


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1 ‘‘(H) The amount the issuer has expended 

2 on operations in the United States, both in 

3 total and for the prior fiscal year. 

4 ‘‘(I) The amount (both in total and for the 

5 prior fiscal year) that the issuer has spent on 

6 lobbying in the United States, including— 

7 ‘‘(i) whether the issuer or any sub8 sidiary of the issuer has reported any sums 

9 under the Foreign Agents Registration Act 

10 of 1938; and 

11 ‘‘(ii) whether the issuer or any sub12 sidiary of the issuer has reported any sums 

13 under the Lobbying Disclosure Act of 

14 1995. 

15 ‘‘(J) Whether the Public Company Ac16 counting Oversight Board is unable to inspect 

17 or investigate a registered public accounting 

18 firm retained by the issuer to prepare an audit 

19 report on the financial statement of the issuer. 

20 ‘‘(K) The amount of taxes and other fees 

21 the issuer paid to the Government of the Peo22 ple’s Republic of China on an annual basis. 

23 ‘‘(L) With respect to customer data— 

24 ‘‘(i) who has access to such data; 


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1 ‘‘(ii) disclosure of instances when in2 formation is requested, arrangements that 

3 may allow passive or continuous access, ef4 forts to protect such data, instances of 

5 cyber-attack, corporate or personnel dis6 putes that involve potential breaches, and 

7 notification of other breaches; and 

8 ‘‘(iii) whether such data is stored in 

9 the United States and, if not, the country 

10 or territory in which such data is stored. 

11 ‘‘(M) For each subsidiary of the issuer lo12 cated in the PRC, the information described 

13 under subparagraphs (A) through (L) with re14 spect to such subsidiary. 

15 ‘‘(N) If the issuer or any subsidiary of the 

16 issuer located in the PRC produces goods or 

17 services that are part of a military-civil fusion 

18 strategy, whether the issuer has consulted with 

19 the People’s Liberation Army or the Ministry of 

20 State Security with regard to industrial policy. 

21 ‘‘(2) DEFINITIONS.—In this subsection: 

22 ‘‘(A) COMMUNIST PARTY OF CHINA.—The 

23 term ‘Communist Party of China’ means the 

24 ruling party of the People’s Republic of China, 

25 including— 


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1 ‘‘(i) party bodies at the national and 

2 sub-national level; and 

3 ‘‘(ii) any agency or instrumentality of 

4 the Communist Party of China. 

5 ‘‘(B) COVERED ISSUER.—The term ‘cov6 ered issuer’ means an issuer— 

7 ‘‘(i) that is— 

8 ‘‘(I) headquartered in the PRC 

9 (including the Hong Kong and Macau 

10 Special Administrative Regions); 

11 ‘‘(II) a branch or subsidiary of 

12 an issuer headquartered in the PRC; 

13 or 

14 ‘‘(III) a variable interest entity 

15 or other type of firm structured 

16 through a series of contracts or over17 lapping personnel— 

18 ‘‘(aa) that are tied to core 

19 operations in the PRC; or 

20 ‘‘(bb) controlled and owned 

21 by an issuer headquartered in the 

22 PRC; or 

23 ‘‘(ii) that— 

24 ‘‘(I) is domiciled in a tax haven 

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1 tories, including the Cayman Islands, 

2 British Virgin Islands, Bermuda, the 

3 Netherlands, Switzerland, Luxem4 bourg, Singapore, the United Arab 

5 Emirates, the Bahamas, Cyprus, or 

6 Mauritius; and 

7 ‘‘(II) has the majority of the 

8 issuer’s business operations taking 

9 place or the majority of the issuer’s 

10 revenue generated in mainland China. 

11 ‘‘(C) GOVERNMENT OF THE PEOPLE’S RE12 PUBLIC OF CHINA.—The term ‘Government of 

13 the People’s Republic of China’ means any of 

14 the following: 

15 ‘‘(i) Any national or sub-national gov16 ernmental unit of the People’s Republic of 

17 China. 

18 ‘‘(ii) Any national or sub-national leg19 islature of the People’s Republic of China. 

20 ‘‘(iii) Any national or sub-national 

21 People’s Political Consultative Conference 

22 of the People’s Republic of China. 

23 ‘‘(iv) Any national or sub-national ju24 dicial or prosecutorial body of the People’s 

25 Republic of China. 


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1 ‘‘(v) Any national or sub-national su2 pervision commission of the People’s Re3 public of China. 

4 ‘‘(vi) Any agency or instrumentality of 

5 the People’s Republic of China. 

6 ‘‘(D) IMMEDIATE FAMILY MEMBER.—The 

7 term ‘immediate family member’ shall include a 

8 spouse, domestic partner, mother, father, aunt, 

9 uncle, sibling, or child. 

10 ‘‘(E) MILITARY-CIVIL FUSION STRAT11 EGY.—The term ‘military-civil fusion strategy’ 

12 means the strategy of the Communist Party of 

13 China aiming to mobilize non-military resources 

14 and expertise for military application, includ15 ing— 

16 ‘‘(i) the development of technology, 

17 improvements in logistics, and other uses 

18 by the People’s Liberation Army; and 

19 ‘‘(ii) firms which develop and acquire 

20 advanced dual-use technology for military 

21 purposes. 

22 ‘‘(F) PRC.—The term ‘PRC’ means the 

23 People’s Republic of China. 

24 ‘‘(G) SENIOR OFFICIAL.—The term ‘senior 

25 official’, when used in connection with the GovVerDate Sep 11 2014 03:45 Mar 09, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H499.IH H499

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1 ernment of the People’s Republic of China or 

2 the Communist Party of China, means— 

3 ‘‘(i) an official with the rank of a dep4 uty at the provincial or ministerial level 

5 (shengbu ji fu zhi) or higher; or 

6 ‘‘(ii) a chief at the bureau level (tingju 

7 ji zheng zhi) or higher. 

8 ‘‘(H) VARIABLE INTEREST ENTITY.—The 

9 term ‘variable interest entity’ means an entity 

10 where an investor has a controlling interest that 

11 is not based on holding the majority of voting 

12 rights.’’. 

13 SEC. 3. DISCLOSURES BY EXCHANGE TRADED FUNDS IN14 VESTING IN CHINESE COMPANIES. 

15 Section 13 of the Securities Exchange Act of 1934 

16 (15 U.S.C. 78m), as amended by section 2, is further 

17 amended by adding at the end the following: 

18 ‘‘(t) DISCLOSURES BY EXCHANGE TRADED FUNDS

19 INVESTING IN CHINESE COMPANIES.— 

20 ‘‘(1) IN GENERAL.—Each exchange traded fund 

21 required to file an annual report under section 13(a) 

22 or 15(d) shall, if the fund invested in the securities 

23 of any PRC company during the reporting period, 

24 include in such report the following, with respect to 

25 each such PRC company: 


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1 ‘‘(A) Who owns the company, including 

2 whether the company is owned by the Govern3 ment of the People’s Republic of China or a 

4 PRC state-controlled entity. 

5 ‘‘(B) Whether the company operates a 

6 Communist Party of China branch or com7 mittee within the company’s corporate struc8 ture. 

9 ‘‘(C) Whether the company has any con10 tractual agreements with the Government of the 

11 People’s Republic of China or the Communist 

12 Party of China or any agency or instrumen13 tality of either. 

14 ‘‘(D) Whether the company has partici15 pated in the PRC’s industrial policies or has 

16 military or public security contracts. 

17 ‘‘(E) Whether any funding, direction, or 

18 other forms of control over the company are ex19 ercised by the Government of the People’s Re20 public of China or the Communist Party of 

21 China. 

22 ‘‘(F) Whether executive-level employees 

23 and board members of the company have imme24 diate family members who are senior officials of 

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1 ment of the People’s Republic of China or are 

2 themselves senior officials of the Communist 

3 Party of China or the Government of the Peo4 ple’s Republic of China. 

5 ‘‘(G) Whether the company is part of (in6 cluding by reason of being a branch or sub7 sidiary) or tied to (through a series of contracts 

8 or parallel corporate incorporations) firms or 

9 individuals sanctioned, restricted, or identified 

10 as tied to the People’s Liberation Army by the 

11 United States Government, including under— 

12 ‘‘(i) the Military End User List main13 tained by the Bureau of Industry and Se14 curity of the Department of Commerce; 

15 ‘‘(ii) the Non-SDN Chinese Military16 Industrial Complex Companies List; 

17 ‘‘(iii) the Unverified List maintained 

18 by the Secretary of Commerce; 

19 ‘‘(iv) the List maintained by the Fed20 eral Communications Commission of equip21 ment and services covered by section 2 of 

22 the Secure and Trusted Communications 

23 Networks Act of 2019 (47 U.S.C. 1601); 


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1 ‘‘(v) the Uyghur Forced Labor Pre2 vention Act Entity List maintained by the 

3 Department of Homeland Security; 

4 ‘‘(vi) the list of covered issuers subject 

5 to a prohibition under section 104 of the 

6 Sarbanes-Oxley Act of 2002 (15 U.S.C. 

7 7214) maintained by the Securities and 

8 Exchange Commission; and 

9 ‘‘(vii) the Withhold Release Orders 

10 and Findings List maintained by the Com11 missioner of U.S. Customs and Border 

12 Protection. 

13 ‘‘(H) The types of products and services 

14 offered by the company. 

15 ‘‘(I) Whether the company has a contract 

16 with the United States Department of Defense. 

17 ‘‘(J) Whether the company produces a 

18 product or service that is used in the produc19 tion of aircraft, spacecraft, semiconductor chips 

20 and equipment, batteries or battery compo21 nents, facial recognition technology, artificial 

22 intelligence, telecommunications technology, en23 ergy production equipment, advanced medical 

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1 ucts related to the national technology and in2 dustrial base in the United States. 

3 ‘‘(K) Whether the company produces goods 

4 that would violate U.S. environmental law or 

5 U.S. civil liberties law if the goods were pro6 duced or used in the United States. 

7 ‘‘(L) Any business activities conducted by 

8 the company— 

9 ‘‘(i) with a privately held firm involved 

10 in China’s industrial, technology, and mili11 tary modernization efforts based in the 

12 People’s Republic of China; or 

13 ‘‘(ii) with a Chinese state-controlled 

14 entity. 

15 ‘‘(M) Whether the company has ever had 

16 an audit of the same type and quality as typi17 cally used by an issuer of publicly traded securi18 ties. 

19 ‘‘(2) DEFINITIONS.—In this subsection: 

20 ‘‘(A) EXCHANGE TRADED FUND.—The 

21 term ‘exchange traded fund’ has the meaning 

22 given that term under section 270.6c–11 of title 

23 17, Code of Federal Regulations. 

24 ‘‘(B) OTHER DEFINITIONS.—The terms 

25 ‘Communist Party of China’, ‘Government of 


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1 the People’s Republic of China’, ‘immediate 

2 family member’, and ‘PRC’ have the meaning 

3 given those terms, respectively, under sub4 section (s)(2).’’. 

Æ 


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