I 
116TH CONGRESS 
2D SESSION 
H. R. 8800 
To prohibit the trading of the securities of certain Communist Chinese 
military companies on a national securities exchange, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 20, 2020 
Mr. GALLAGHER (for himself, Ms. CHENEY, and Mr. STEWART) introduced 
the following bill; which was referred to the Committee on Financial Serv-
ices, and in addition to the Committees on Foreign Affairs, Ways and 
Means, Armed Services, Education and Labor, Intelligence (Permanent 
Select), and Oversight and Reform, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To prohibit the trading of the securities of certain Com-
munist Chinese military companies on a national securi-
ties exchange, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘American Financial 
Markets Integrity and Security Act’’. 
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SEC. 2. PROHIBITIONS RELATING TO CERTAIN COMMUNIST 
CHINESE MILITARY COMPANIES. 
(a) DEFINITIONS.—In this section: 
(1) COMMISSION.—The term ‘‘Commission’’ 
means the Securities and Exchange Commission. 
(2) CONTROL.—The term ‘‘control’’ has the 
meaning given the term in section 2(a) of the Invest-
ment Company Act of 1940 (15 U.S.C. 80a–2(a)). 
(3) COVERED ENTITY.— 
(A) IN GENERAL.—The term ‘‘covered en-
tity’’— 
(i) means an entity on— 
(I) the list of Communist Chinese 
military companies required by section 
1237(b) of the Strom Thurmond Na-
tional Defense Authorization Act for 
Fiscal Year 1999 (Public Law 105– 
261; 50 U.S.C. 1701 note); or 
(II) the entity list maintained by 
the Bureau of Industry and Security 
of the Department of Commerce and 
set forth in Supplement No. 4 to part 
744 of the title 15, Code of Federal 
Regulations; and 
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(ii) includes a parent, subsidiary, or 
affiliate of, or an entity controlled by, an 
entity described in clause (i). 
(B) GRACE PERIOD.—For the purposes of 
this Act, and the amendments made by this 
Act, an entity shall be considered to be a cov-
ered entity beginning on the date that is 1 year 
after the date on which the entity first qualifies 
under the applicable provision of subparagraph 
(A). 
(4) EXCHANGE; SECURITY.—The terms ‘‘ex-
change’’ and ‘‘security’’ have the meanings given 
those terms in section 3(a) of the Securities Ex-
change Act of 1934 (15 U.S.C. 78c(a)). 
(5) INSURANCE COMPANY.—The term ‘‘insur-
ance company’’ has the meaning given the term in 
section 2(a) of the Investment Company Act of 1940 
(15 U.S.C. 80a–2(a)). 
(b) PROHIBITIONS.— 
(1) LISTING ON EXCHANGE.—Beginning on the 
date that is 1 year after the date of enactment of 
this Act, the Commission shall prohibit a covered en-
tity from offering to sell or selling securities issued 
by the covered entity, including pursuant to an ex-
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emption to section 5 of the Securities Act of 1933 
(15 U.S.C. 77e). 
(2) INVESTMENTS; LIMITATION ON ACTIONS.— 
(A) IN GENERAL.—The Investment Com-
pany Act of 1940 (15 U.S.C. 80a–1 et seq.) is 
amended— 
(i) in section 12(d) (15 U.S.C. 80a– 
12(d)), by adding at the end the following: 
‘‘(6)(A) It shall be unlawful for any investment 
company, or any person that would be an investment 
company but for the application of paragraph (1) or 
(7) of section 3(c), to invest in a covered entity. 
‘‘(B) In this paragraph, the term ‘covered enti-
ty’ has the meaning given the term in section 2(a) 
of the American Financial Markets Integrity and Se-
curity Act.’’; and 
(ii) in section 13(c)(1)— 
(I) in subparagraph (A), by strik-
ing ‘‘or’’ at the end; 
(II) in subparagraph (B), by 
striking the period at the end and in-
serting ‘‘or’’; and 
(III) by adding at the end the 
following: 
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‘‘(C) are covered entities, as that term is 
defined in section 12(d)(6)(B).’’. 
(B) EFFECTIVE DATE.—The amendments 
made by subparagraph (A) shall take effect on 
the date that is 1 year after the date of enact-
ment of this Act. 
(3) FEDERAL FUNDS.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), on and after the date that is 
180 days after the date of enactment of this 
Act, no Federal funds may be used to enter 
into, extend, or renew a contract or purchasing 
agreement with a covered entity. 
(B) WAIVER.—The head of a Federal 
agency may issue a national security waiver to 
the prohibition in subparagraph (A) for a pe-
riod of not more than 2 years with respect to 
a covered entity if the agency head submits to 
Congress a notification that includes— 
(i) a written justification for the waiv-
er; and 
(ii) a plan for a phase-out of the 
goods or services provided by the covered 
entity. 
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(4) INVESTMENTS
BY
INSURANCE
COMPA-
NIES.— 
(A) IN GENERAL.—On and after the date 
of enactment of this Act, an insurance company 
shall not invest in a covered entity. 
(B) CERTIFICATION OF COMPLIANCE.— 
(i) IN
GENERAL.—Each insurance 
company shall, on an annual basis, submit 
to the Secretary of the Treasury a certifi-
cation of compliance with subparagraph 
(A). 
(ii) RESPONSIBILITIES OF THE SEC-
RETARY.—The Secretary of the Treasury 
shall create a form for the submission re-
quired under clause (i) in such a manner 
that minimizes the reporting burden on an 
insurance company making the submission. 
(C) SHARING
INFORMATION.—The Sec-
retary of the Treasury, acting through the Fed-
eral Insurance Office, shall share the informa-
tion received under subparagraph (B) and co-
ordinate verification of compliance with State 
insurance offices. 
(c) QUALIFIED TRUSTS, ETC.— 
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(1) IN
GENERAL.—Subsection (a) of section 
401 of the Internal Revenue Code of 1986 is amend-
ed by inserting after paragraph (38) the following 
new paragraph: 
‘‘(39) PROHIBITED
INVESTMENTS.—A trust 
which is part of a plan shall not be treated as a 
qualified trust under this subsection unless the plan 
provides that no part of the plan’s assets will be in-
vested in any covered entity (as defined in section 
12(d)(6)(B) of the Investment Company Act of 
1940).’’. 
(2) IRAS.—Paragraph (3) of section 408(a) of 
such Code is amended by striking ‘‘contracts’’ and 
inserting ‘‘contracts or in any covered entity (as de-
fined in section 12(d)(6)(B) of the Investment Com-
pany Act of 1940’’. 
(3) FIDUCIARY DUTY.—Section 404 of the Em-
ployee Retirement Income Security Act of 1974 (29 
U.S.C. 1104) is amended by adding at the end the 
following new subsection: 
‘‘(f) PROHIBITED INVESTMENTS.—No fiduciary shall 
cause any assets of a plan to be invested in any covered 
entity (as defined in section 12(d)(6)(B) of the Investment 
Company Act of 1940 (15 U.S.C. 80a–12(d)(6)(B))).’’. 
(4) EFFECTIVE DATE.— 
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(A) IN GENERAL.—Except as provided in 
subparagraph (B), the amendments made by 
this subsection shall apply to plan years begin-
ning after the date which is 180 days after the 
date of the enactment of this Act. 
(B) PLAN
AMENDMENTS.—If subpara-
graph (C) applies to any retirement plan or 
contract amendment— 
(i) such plan or contract shall not fail 
to be treated as being operated in accord-
ance with the terms of the plan during the 
period described in subparagraph (C)(ii) 
solely because the plan operates in accord-
ance with the amendments made by this 
subsection; and 
(ii) except as provided by the Sec-
retary of the Treasury (or the Secretary’s 
delegate), such plan or contract shall not 
fail to meet the any requirements of the 
Internal Revenue Code of 1986 or the Em-
ployee Retirement Income Security Act of 
1974 by reason of such amendment. 
(C) AMENDMENTS TO WHICH PARAGRAPH 
APPLIES.— 
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(i) IN GENERAL.—This subparagraph 
shall apply to any amendment to any plan 
or annuity contract which— 
(I) is made pursuant to the pro-
visions of this section; and 
(II) is made on or before the last 
day of the first plan year beginning 
on or after the date which is 2 years 
after the date of the enactment of this 
Act (4 years after such date of enact-
ment, in the case of a governmental 
plan). 
(ii) CONDITIONS.—This subparagraph 
shall not apply to any amendment unless— 
(I) during the period beginning 
on the date which is 180 days after 
the date of the enactment of this Act, 
and ending on the date described in 
subclause (I)(bb) (or, if earlier, the 
date the plan or contract amendment 
is adopted), the plan or contract is op-
erated as if such plan or contract 
amendment were in effect; and 
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(II) such plan or contract amend-
ment applies retroactively for such pe-
riod. 
(D) SUBSEQUENT
AMENDMENTS.—Rules 
similar to the rules of subparagraphs (B) and 
(C) shall apply in the case of any amendment 
to any plan or annuity contract made pursuant 
to any update of the list of Communist Chinese 
military companies required by section 1237(b) 
of the Strom Thurmond National Defense Au-
thorization Act for Fiscal Year 1999 (Public 
Law 105–261; 50 U.S.C. 1701 note) which is 
made after the effective date of the amend-
ments made by this subsection. 
SEC. 3. MODIFICATION OF REQUIREMENTS FOR LIST OF 
COMMUNIST CHINESE MILITARY COMPANIES. 
Section 1237(b) of the Strom Thurmond National 
Defense Authorization Act for Fiscal Year 1999 (Public 
Law 105–261; 50 U.S.C. 1701 note) is amended— 
(1) by striking paragraph (2) and inserting the 
following: 
‘‘(2) REVISIONS TO THE LIST.— 
‘‘(A) ADDITIONS.—The Secretary of De-
fense, the Secretary of Commerce, or the Direc-
tor of National Intelligence may add a person 
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rying out paragraph (2)’’ and inserting ‘‘this sec-
tion’’. 
SEC. 4. ANALYSIS OF FINANCIAL AMBITIONS OF THE GOV-
ERNMENT OF THE PEOPLE’S REPUBLIC OF 
CHINA. 
(a) ANALYSIS REQUIRED.—The Director of the Of-
fice of Commercial and Economic Analysis of the Air 
Force shall conduct an analysis of— 
(1) the strategic importance to the Government 
of the People’s Republic of China of inflows of 
United States dollars through capital markets to the 
People’s Republic of China; 
(2) the methods by which that Government 
seeks to manage such inflows; 
(3) how the inclusion of the securities of Chi-
nese entities in stock or bond indexes affects such 
inflows and serves the financial ambitions of that 
Government; and 
(4) how the listing of the securities of Chinese 
entities on exchanges in the United States assists 
in— 
(A) meeting the strategic goals of that 
Government, including defense, surveillance, 
and intelligence goals; and 
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(B) the fusion of the civilian and military 
components of that Government. 
(b) SUBMISSION TO CONGRESS.—The Director of the 
Office of Commercial and Economic Analysis of the Air 
Force shall submit to Congress a report— 
(1) setting forth the results of the analysis con-
ducted under subsection (a); and 
(2) based on that analysis, making rec-
ommendations for best practices to mitigate any na-
tional security and economic risks to the United 
States relating to the financial ambitions of the Gov-
ernment of the People’s Republic of China. 
Æ 
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