South China Sea and East China Sea Sanctions Act of 2021

To impose sanctions with respect to the People's Republic of China in relation to activities in the South China Sea and the East China Sea, and for other purposes. 1. Short title This Act may be cited as the South China Sea and East China Sea Sanctions Act of 2021 2. Definitions In this Act: (1) Account; correspondent account; payable-through account The terms account correspondent account payable-through account (2) Alien The term alien 8 U.S.C. 1101(a) (3) Appropriate committees of Congress The term appropriate committees of Congress (A) the Committee on Foreign Relations, the Committee on Armed Services, the Committee on Banking, Housing, and Urban Affairs, and the Select Committee on Intelligence of the Senate; and (B) the Committee on Foreign Affairs, the Committee on Armed Services, the Committee on Financial Services, and the Permanent Select Committee on Intelligence of the House of Representatives. (4) Chinese person The term Chinese person (A) an individual who is a citizen or national of the People's Republic of China; or (B) an entity organized under the laws of the People's Republic of China or otherwise subject to the jurisdiction of the Government of the People's Republic of China. (5) Financial institution The term financial institution (6) Foreign financial institution The term foreign financial institution (7) Knowingly The term knowingly (8) Person The term person (9) United states person The term United States person (A) a United States citizen or an alien lawfully admitted for permanent residence to the United States; or (B) an entity organized under the laws of the United States or of any jurisdiction within the United States, including a foreign branch of such an entity. 3. Sanctions with respect to Chinese persons responsible for China’s activities in the South China Sea and the East China Sea (a) Initial imposition of sanctions On and after the date that is 60 days after the date of the enactment of this Act, the President shall impose the sanctions described in subsection (b) with respect to— (1) any Chinese person that contributes to construction or development projects, including land reclamation, island-making, lighthouse construction, building of base stations for mobile communications services, building of electricity and fuel supply facilities, or civil infrastructure projects, or contributes to the ongoing supply of new settlements resulting from such development projects, in areas of the South China Sea contested by one or more members of the Association of Southeast Asian Nations; (2) any Chinese person that is responsible for or complicit in, or has engaged in, directly or indirectly, actions or policies that threaten the peace, security, or stability of areas of the South China Sea contested by one or more members of the Association of Southeast Asian Nations or areas of the East China Sea administered by Japan or the Republic of Korea, including through the use of vessels and aircraft to impose the sovereignty of the People’s Republic of China in those areas; (3) any Chinese person that engages, or attempts to engage, in an activity or transaction that materially contributes to, or poses a risk of materially contributing to, an activity described in paragraph (1) or (2); and (4) any person that— (A) is owned or controlled by a person described in paragraph (1), (2), or (3); (B) is acting for or on behalf of such a person; or (C) provides, or attempts to provide— (i) financial, material, technological, or other support to a person described in paragraph (1), (2), or (3); or (ii) goods or services in support of an activity described in paragraph (1), (2), or (3). (b) Sanctions described (1) Blocking of property The President shall block and prohibit, in accordance with the International Emergency Economic Powers Act ( 50 U.S.C. 1701 (2) Exclusion from united states The Secretary of State shall deny a visa to, and the Secretary of Homeland Security shall exclude from the United States, any person subject to subsection (a) that is an alien. (3) Current visa revoked The issuing consular officer, the Secretary of State, or the Secretary of Homeland Security (or a designee of one of such Secretaries) shall revoke any visa or other entry documentation issued to any person subject to subsection (a) that is an alien, regardless of when issued. The revocation shall take effect immediately and shall automatically cancel any other valid visa or entry documentation that is in the alien’s possession. (c) Exceptions; penalties (1) Inapplicability of national emergency requirement The requirements of section 202 of the International Emergency Economic Powers Act ( 50 U.S.C. 1701 (2) Compliance with united nations headquarters agreement Paragraphs (2) and (3) of subsection (b) shall not apply if admission of an alien to the United States is necessary to permit the United States to comply with the Agreement regarding the Headquarters of the United Nations, signed at Lake Success, June 26, 1947, and entered into force, November 21, 1947, between the United Nations and the United States. (3) Penalties The penalties provided for in subsections (b) and (c) of section 206 of the International Emergency Economic Powers Act ( 50 U.S.C. 1705 (d) Additional imposition of sanctions (1) In general The President shall prohibit the opening, and prohibit or impose strict conditions on the maintaining, in the United States of a correspondent account or a payable-through account by a foreign financial institution that the President determines knowingly, on or after the date that is 60 days after the date of the enactment of this Act, conducts or facilitates a significant financial transaction for a person subject to subsection (a) if the Director of National Intelligence determines that the Government of the People’s Republic of China has— (A) declared an air defense identification zone over any part of the South China Sea; (B) initiated reclamation work at another disputed location in the South China Sea, such as at Scarborough Shoal; (C) seized control of Second Thomas Shoal; (D) deployed surface-to-air missiles to any of the artificial islands the People’s Republic of China has built in the Spratly Island chain, including Fiery Cross, Mischief, or Subi Reefs; (E) established territorial baselines around the Spratly Island chain; (F) repeated harassment of Philippine vessels; or (G) repeated provocative actions against the Japanese Coast Guard or Maritime Self-Defense Force or United States forces in the East China Sea. (2) Report (A) In general The determination of the Director of National Intelligence referred to in paragraph (1) shall be submitted in a report to the President and the appropriate committees of Congress. (B) Form of report The report required by subparagraph (A) shall be submitted in unclassified form, but may include a classified annex. 4. Determinations and report on Chinese companies active in the South China Sea and the East China Sea (a) In general The Secretary of State shall submit to the appropriate committees of Congress a report that identifies each Chinese person the Secretary determines is engaged in the activities described in section 3(a). (b) Consideration In preparing the report required under subsection (a), the Secretary shall make specific findings with respect to whether each of the following persons is involved in the activities described in section 3(a): (1) CCCC Tianjin Dredging Co., Ltd. (2) CCCC Dredging (Group) Company, Ltd. (3) China Communications Construction Company (CCCC), Ltd. (4) China Petroleum Corporation (Sinopec Group). (5) China Mobile. (6) China Telecom. (7) China Southern Power Grid. (8) CNFC Guangzhou Harbor Engineering Company. (9) Zhanjiang South Project Construction Bureau. (10) Hubei Jiangtian Construction Group. (11) China Harbour Engineering Company (CHEC). (12) Guangdong Navigation Group (GNG) Ocean Shipping. (13) Shanghai Leading Energy Shipping. (14) China National Offshore Oil Corporation (CNOOC). (15) China Oilfield Services Limited (COSL). (16) China Precision Machinery Import/Export Corporation (CPMIEC). (17) China Aerospace Science and Industry Corporation (CASIC). (18) Aviation Industry Corporation of China (AVIC). (19) Shenyang Aircraft Corporation. (20) Shaanxi Aircraft Corporation. (21) China Ocean Shipping (Group) Company (COSCO). (22) China Southern Airlines. (23) Zhan Chaoying. (24) Sany Group. (25) Chinese persons affiliated with any of the entities specified in paragraphs (1) through (24). (c) Submission and form (1) Submission The report required by subsection (a) shall be submitted not later than 60 days after the date of the enactment of this Act and every 180 days thereafter until the date that is 3 years after such date of enactment. (2) Form The report required by subsection (a) shall be submitted in unclassified form, but may include a classified annex if the Secretary determines it is necessary for the national security interests of the United States to do so. (3) Public availability The Secretary shall publish the unclassified part of the report required by subsection (a) on a publicly available website of the Department of State. 5. Prohibition against documents portraying the South China Sea or the East China Sea as part of China The Government Publishing Office may not publish any map, document, record, electronic resource, or other paper of the United States (other than materials relating to hearings held by committees of Congress or internal work product of a Federal agency) portraying or otherwise indicating that it is the position of the United States that the territory or airspace in the South China Sea contested by one or more members of the Association of Southeast Asian Nations or the territory or airspace of areas of the East China Sea administered by Japan or the Republic of Korea is part of the territory or airspace of the People’s Republic of China. 6. Prohibition on facilitating certain investments in the South China Sea or the East China Sea (a) In general No United States person may take any action to approve, facilitate, finance, or guarantee any investment, provide insurance, or underwriting in the South China Sea or the East China Sea that involves any person with respect to which sanctions are imposed under section 3(a). (b) Enforcement The Secretary of the Treasury, in consultation with the Secretary of State, is authorized to take such actions, including the promulgation of such rules and regulations, as may be necessary to carry out the purposes of this section. (c) Penalties The penalties provided for in subsections (b) and (c) of section 206 of the International Emergency Economic Powers Act ( 50 U.S.C. 1705 (d) Exception Subsection (a) shall not apply with respect to humanitarian assistance, disaster assistance, or emergency food assistance. 7. Department of Justice affirmation of non-recognition of annexation In any matter before any United States court, upon request of the court or any party to the matter, the Attorney General shall affirm the United States policy of not recognizing the de jure or de facto sovereignty of the People’s Republic of China over territory or airspace contested by one or more members of the Association of Southeast Asian Nations in the South China Sea or the territory or airspace of areas of the East China Sea administered by Japan or the Republic of Korea. 8. Non-recognition of Chinese sovereignty over the South China Sea or the East China Sea (a) United states armed forces The Secretary of Defense may not take any action, including any movement of aircraft or vessels that implies recognition of the sovereignty of the People’s Republic of China over territory or airspace contested by one or more members of the Association of Southeast Asian Nations in the South China Sea or the territory or airspace of areas of the East China Sea administered by Japan or the Republic of Korea. (b) United states flagged vessels No vessel that is issued a certificate of documentation under chapter 121 (c) United states aircraft No aircraft operated by an air carrier that holds an air carrier certificate issued under chapter 411 9. Prohibition on certain assistance to countries that recognize Chinese sovereignty over the South China Sea or the East China Sea (a) Prohibition Except as provided by subsection (c) or (d), no amounts may be obligated or expended to provide foreign assistance to the government of any country identified in a report required by subsection (b). (b) Report required (1) In general Not later than 60 days after the date of the enactment of this Act, and every 180 days thereafter until the date that is 3 years after such date of enactment, the Secretary of State shall submit to the appropriate committees of Congress a report identifying each country that the Secretary determines recognizes, after such date of enactment, the sovereignty of the People’s Republic of China over territory or airspace contested by one or more members of the Association of Southeast Asian Nations in the South China Sea or the territory or airspace of areas of the East China Sea administered by Japan or the Republic of Korea. (2) Form The report required by paragraph (1) shall be submitted in unclassified form, but may include a classified annex if the Secretary of State determines it is necessary for the national security interests of the United States to do so. (3) Public availability The Secretary of State shall publish the unclassified part of the report required by paragraph (1) on a publicly available website of the Department of State. (c) Exception This section shall not apply with respect to Taiwan, humanitarian assistance, disaster assistance, emergency food assistance, or the Peace Corps. (d) Waiver The President may waive the application of subsection (a) with respect to the government of a country if the President determines that the waiver is in the national interests of the United States.

Summary: South China Sea and East China Sea Sanctions Act of 2021 This bill authorizes sanctions on Chinese individuals and entities that participate in certain activities related to China's territorial disputes in the South China Sea and the East China Sea. The President may impose property-blocking and visa-denial sanctions on certain Chinese individuals and entities, including those that are (1) responsible for or significantly contributing to certain large-scale projects, such as reclamation and militarization projects, in the disputed parts of the South China Sea; (2) responsible for or significantly contributing to actions that inhibit another country from protecting its sovereign rights to access resources in the South China Sea; and (3) responsible for or complicit in actions that threaten the peace, security, or stability in disputed South China Sea areas or in an East China Sea area administered by Japan or South Korea. The President may also (1) deny visas to the corporate officers and controlling shareholders of sanctioned entities, (2) subject sanctioned individuals or entities to certain export restrictions, and (3) prohibit U.S. individuals and entities from investing in sanctioned entities or individuals. The Department of State must periodically submit a report to Congress identifying countries that recognize China's claims to the contested territories.