IIA
105TH CONGRESS
1ST SESSION
H. R. 2647
IN THE SENATE OF THE UNITED STATES
NOVEMBER 7, 1997
Received
NOVEMBER 8, 1997
Read twice and referred to the Committee on Banking, Housing, and Urban
Affairs
AN ACT
To ensure that commercial activities of the People’s Libera-
tion Army of China or any Communist Chinese military
company in the United States are monitored and are
subject to the authorities under the International Emer-
gency Economic Powers Act.
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. CONGRESSIONAL FINDINGS.
The Congress makes the following findings:
(1) The People’s Liberation Army is the prin-
cipal instrument of repression within the People’s
Republic of China, responsible for occupying Tibet
since 1950, massacring hundreds of students and
demonstrators for democracy in Tiananmen Square
on June 4, 1989, and running the Laogai (‘‘reform
through labor’’) slave labor camps.
(2) The People’s Liberation Army is engaged in
a massive military buildup, which has involved a
doubling since 1992 of announced official figures for
military spending by the People’s Republic of China.
(3) The People’s Liberation Army is engaging
in a major ballistic missile modernization program
which could undermine peace and stability in East
Asia, including 2 new intercontinental missile pro-
grams, 1 submarine-launched missile program, a
new class of compact but long-range cruise missiles,
and an upgrading of medium- and short-range bal-
listic missiles.
(4) The People’s Liberation Army is working to
coproduce the SU–27 fighter with Russia, and is in
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the process of purchasing several substantial weap-
ons systems from Russia, including the 633 model of
the Kilo-class submarine and the SS–N–22 Sunburn
missile system specifically designed to incapacitate
United States aircraft carriers and Aegis cruisers.
(5) The People’s Liberation Army has carried
out acts of aggression in the South China Sea, in-
cluding the February 1995 seizure of the Mischief
Reef in the Spratley Islands, which is claimed by the
Philippines.
(6) In July 1995 and in March 1996, the Peo-
ple’s Liberation Army conducted missile tests to in-
timidate Taiwan when Taiwan held historic free elec-
tions, and those tests effectively blockaded Taiwan’s
2 principal ports of Keelung and Kaohsiung.
(7) The People’s Liberation Army has contrib-
uted to the proliferation of technologies relevant to
the refinement of weapons-grade nuclear material,
including transferring ring magnets to Pakistan.
(8) The People’s Liberation Army and associ-
ated defense companies have provided ballistic mis-
sile components, cruise missiles, and chemical weap-
ons ingredients to Iran, a country that the executive
branch has repeatedly reported to Congress is the
greatest sponsor of terrorism in the world.
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(9) In May 1996, United States authorities
caught the People’s Liberation Army enterprise Poly
Technologies and the civilian defense industrial com-
pany Norinco attempting to smuggle 2,000 AK–47s
into Oakland, California, and offering to sell urban
gangs shoulder-held missile launchers capable of
‘‘taking out a 747’’ (which the affidavit of the Unit-
ed States Customs Service of May 21, 1996, indi-
cated that the representative of Poly Technologies
and Norinco claimed), and Communist Chinese au-
thorities punished only 4 low-level arms merchants
by sentencing them on May 17, 1997, to brief prison
terms.
(10) The People’s Liberation Army contributes
to the People’s Republic of China’s failure to meet
the standards of the 1995 Memorandum of Under-
standing with the United States on intellectual prop-
erty rights by running factories which pirate videos,
compact discs, and computer software that are prod-
ucts of the United States.
(11) The People’s Liberation Army contributes
to the People’s Republic of China’s failing to meet
the standards of the February 1997 Memorandum
of Understanding with the United States on textiles
by operating enterprises engaged in the trans-
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shipment of textile products to the United States
through third countries.
(12) The estimated $2 billion to $3 billion in
annual earnings of People’s Liberation Army enter-
prises subsidize the expansion and activities of the
People’s Liberation Army described in this sub-
section.
(13) The commercial activities of the People’s
Liberation Army are frequently conducted on non-
commercial terms, or for noncommercial purposes
such as military or foreign policy considerations.
SEC. 2. APPLICATION OF AUTHORITIES UNDER THE INTER-
NATIONAL EMERGENCY ECONOMIC POWERS
ACT TO CHINESE MILITARY COMPANIES.
(a) DETERMINATION OF COMMUNIST CHINESE MILI-
TARY COMPANIES.—
(1) IN GENERAL.—Subject to paragraphs (2)
and (3), not later than 90 days after the date of the
enactment of this Act, the Secretary of Defense, in
consultation with the Attorney General, the Director
of Central Intelligence, and the Director of the Fed-
eral Bureau of Investigation, shall compile a list of
persons who are Communist Chinese military compa-
nies and who are operating directly or indirectly in
the United States or any of its territories and pos-
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sessions, and shall publish the list of such persons
in the Federal Register. On an ongoing basis, the
Secretary of Defense, in consultation with the Attor-
ney General, the Director of Central Intelligence,
and the Director of the Federal Bureau of Investiga-
tion, shall make additions or deletions to the list
based on the latest information available.
(2) COMMUNIST
CHINESE
MILITARY
COM-
PANY.—For purposes of making the determination
required by paragraph (1), the term ‘‘Communist
Chinese military company’’—
(A) means a person that is—
(i) engaged in providing commercial
services, manufacturing, producing, or ex-
porting, and
(ii) owned or controlled by the Peo-
ple’s Liberation Army, and
(B) includes, but is not limited to, any per-
son identified in the United States Defense In-
telligence Agency publication numbered VP–
1920–271–90, dated September 1990, or PC–
1921–57–95, dated October 1995, and any up-
date of such reports for the purposes of this
Act.
(b) PRESIDENTIAL AUTHORITY.—
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(1) AUTHORITY.—The President may exercise
the authorities set forth in section 203(a) of the
International Emergency Economic Powers Act (50
U.S.C. 1702(a)) with respect to any commercial ac-
tivity in the United States by a Communist Chinese
military company (except with respect to authorities
relating to importation), without regard to section
202 of that Act.
(2) PENALTIES.—The penalties set forth in sec-
tion 206 of the International Emergency Economic
Powers Act (50 U.S.C. 1705) shall apply to viola-
tions of any license, order, or regulation issued
under paragraph (1).
SEC. 3. DEFINITION.
For purposes of this Act, the term ‘‘People’s Libera-
tion Army’’ means the land, naval, and air military serv-
ices, the police, and the intelligence services of the Com-
munist Government of the People’s Republic of China, and
any member of any such service or of such police.
Passed the House of Representatives November 7,
1997.
Attest:
ROBIN H. CARLE,
Clerk.