To codify the denial of export privileges and related provisions under title 15, Code of Federal Regulations.

To codify the denial of export privileges and related provisions under title 15, Code of Federal Regulations. 1. Findings Congress finds the following: (1) The Founders of the United States viewed intellectual property rights as fundamental rights that must be protected by the government. (2) Article I, section 8, clause 8 of the United States Constitution affirmatively defends the individual’s right to protect intellectual property by granting Congress power to promote the Progress of Science and Useful arts, by securing, for limited Times, to Authors and Inventors, the exclusive Right to their respective Writings and Discoveries (3) The Commission on the Theft of American Intellectual Property estimates that intellectual property theft costs the United States economy approximately $600 billion annually. (4) A March 1, 2019, CNBC poll found that one-in-five United States corporations say that China has stolen proprietary intellectual property within the last year and one-in-three United States corporations state that China has stolen their intellectual property within the last decade. (5) The Commission on the Theft of American Intellectual Property further reports that China’s industrial policies call for the absorption, digestion, and re-innovation of foreign intellectual property to meet the Made in China 2025 goal of 40 percent self-sufficiency by 2020 and 75 percent by 2025 (6) The Chinese Government remains the world’s principle source of intellectual property theft. (7) China engages in foreign ownership restrictions that include joint venture requirements and administrative reviews that pressure United States companies to transfer intellectual property and proprietary technology to Chinese companies. (8) China imposes harmful contractual obligations on United States companies seeking to license their proprietary technology to Chinese-based firms and is engaged in a purposeful and unfair practice of acquiring United States businesses to generate technology transfers. (9) The Chinese Government is engaged in cyber attacks against United States businesses, military installations, and government entities, including the United States Office of Personnel Management, resulting in the theft of untold proprietary information and commercial trade secrets. (10) China is undertaking the greatest intellectual property theft in human history (11) Congress must take bold action to combat the Chinese Government’s concerted efforts to perpetrate cyber attacks against United States entities and steal United States intellectual property. (12) Denial orders are issued by the Assistant Secretary of Commerce for Export Enforcement of the Bureau of Industry and Security to deny the export privileges of an entity or individual. A denial of export privileges prohibits the person from participating in any way in any transaction subject to the Export Administration Regulations (EAR). Furthermore, it is unlawful for any other entity or individual to participate in any way in an export transaction subject to the EAR with a person subject to a denial order. (13) On April 16, 2018, Secretary of Commerce Wilbur Ross announced that the Bureau of Industry and Security of the Department of Commerce had issued an order to deny the export privileges of Zhongxing Telecommunications Equipment Corporation of Shenzhen, China (“ZTE Corporation”) and ZTE Kangxun Telecommunications Ltd. of Hi-New Shenzhen, China. 2. Sense of Congress It is the sense of Congress that— (1) denial orders are an important foreign policy tool to use against foreign entities and individuals, especially Chinese persons, with a pattern of violating United States laws, especially laws relating to intellectual property; and (2) the Department of Commerce should vigorously utilize denial orders to hold such persons accountable. 3. Strategy Not later than one year after the date of the enactment of this Act, the Secretary of Commerce, in consultation with the Secretary of State, the Secretary of Treasury, and Attorney General, shall submit to Congress a strategy regarding how denial orders issued by the Bureau of Industry and Security of the Department of Commerce to deny the export privileges of foreign entities and individuals, especially entities and individuals located in China, can be better utilized as part of a holistic approach to hold such entities and individuals accountable for theft of United States intellectual property. 4. Codification of denial of export privileges and related provisions under title 15, Code of Federal Regulations The provisions of part 730 of title 15, Code of Federal Regulations, relating to general information, and section 766.25 of such title, relating to administrative action denying export privileges, are hereby enacted into law.

Summary: This bill provides statutory authority for specified provisions related to the denial of export privileges, and it requires the Department of Commerce to submit a strategy regarding how these denial orders can be better used to hold certain foreign entities accountable for the theft of U.S. intellectual property.