in April 2016, ‘‘Throughout 2015, China continued 
to assert sovereignty claims over features in the 
East and South China Seas. In the East China Sea, 
China continued to use maritime law enforcement 
ships and aircraft to patrol near the Senkaku 
(Diaoyu) Islands in order to challenge Japan’s 
claim. In the South China Sea, China paused its 
land reclamation effort in the Spratly Islands in late 
2015 after adding more than 3,200 acres of land to 
the seven features it occupies in the archipelago. Al-
though these artificial islands do not provide China 
with any additional territorial or maritime rights 
within the South China Sea, China will be able to 
use them as persistent civil-military bases to en-
hance its long-term presence in the South China Sea 
significantly.’’. 
(3) On May 30, 2015, at the Shangri-la Dia-
logue of the International Institute for Strategic 
Studies, Secretary of Defense Ashton Carter stated 
that ‘‘with its actions in the South China Sea, China 
is out of step with both the international rules and 
norms that underscore the Asia-Pacific’s security ar-
chitecture, and the regional consensus that favors di-
plomacy and opposes coercion’’. 
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(4) On July 24, 2015, Admiral Harry Harris, 
Jr., noted at a forum in Colorado that each year 
more than $5,300,000,000,000 in global sea-based 
trade passes through the South China Sea. 
(5) On June 4, 2016, at the Shangri-la Dia-
logue, Secretary of Defense Ashton Carter stated: 
‘‘[T]he United States will stand with regional part-
ners to uphold core principles, like freedom of navi-
gation and overflight and the peaceful resolution of 
disputes through legal means and in accordance with 
international law. As I affirmed here last year, and 
America’s Freedom of Navigation Operations in the 
South China Sea have demonstrated, the United 
States will continue to fly, sail and operate wherever 
international law allows, so that everyone in the re-
gion can do the same.’’. 
(6) On July 12, 2016, the Permanent Court of 
Arbitration’s Tribunal organized pursuant to the 
United Nations Convention on the Law of the Sea 
issued its unanimous award in the arbitration insti-
tuted by Republic of the Philippines against the Peo-
ple’s Republic of China. The Tribunal noted that its 
award is final and binding under that Convention. 
(7) Also according to the award, the Tribunal 
‘‘concluded that, to the extent China had historical 
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rights to resources in the waters of the South China 
Sea, such rights were extinguished to the extent they 
were incompatible with the exclusive economic zones 
provided for in the Convention. The Tribunal con-
cluded that there was no legal basis for China to 
claim historic rights to resources within the sea 
areas falling within the ‘nine-dash line’.’’. 
(8) Also according to the award, the Tribunal 
‘‘held that the Spratly Islands cannot generate mari-
time zones collectively as a unit. Having found that 
none of the features claimed by China was capable 
of generating an exclusive economic zone, the Tri-
bunal found that it could—without delimiting a 
boundary—declare that certain sea areas are within 
the exclusive economic zone of the Philippines, be-
cause those areas are not overlapped by any possible 
entitlement of China.’’. 
(9) Also according to the award, the Tribunal 
‘‘found that China had violated the Philippines’ sov-
ereign rights in its exclusive economic zone by (a) 
interfering with Philippine fishing and petroleum ex-
ploration, (b) constructing artificial islands, and (c) 
failing to prevent Chinese fishermen from fishing in 
the zone. The Tribunal also held that fishermen 
from the Philippines (like those from China) had 
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traditional fishing rights at Scarborough Shoal and 
that China had interfered with these rights in re-
stricting access. The Tribunal further held that Chi-
nese law enforcement vessels had unlawfully created 
a serious risk of collision when they physically ob-
structed Philippine vessels.’’. 
(10) On July 12, 2016, the Ministry of Foreign 
Affairs of the People’s Republic of China issued a 
statement that China ‘‘declares that the [Tribunal] 
award is null and void and has no binding force. 
China neither accepts nor recognizes it. . . . China’s 
territorial sovereignty and maritime rights and inter-
ests in the South China Sea shall under no cir-
cumstances be affected by those awards. China op-
poses and will never accept any claim or action 
based on those awards.’’. 
(11) On July 12, 2016, the Government of the 
People’s Republic of China issued the fifth state-
ment in the name of that Government since 1979 
that— 
(A) stated that the People’s Republic of 
China has sovereignty over the 4 rocks and 
shoals in the South China Sea; 
(B) claims internal waters, territorial seas, 
contiguous zones, one or more exclusive eco-
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nomic zones, and a continental shelf based on 
that sovereignty claim; and 
(C) continues to claim historic rights in 
the South China Sea. 
(12) On July 12, 2016, Assistant Secretary of 
State and Department of State Spokesperson John 
Kirby noted that the ‘‘United States strongly sup-
ports the rule of law. We support efforts to resolve 
territorial and maritime disputes in the South China 
Sea peacefully, including through arbitration. . . . 
we urge all claimants to avoid provocative state-
ments or actions. This decision can and should serve 
as a new opportunity to renew efforts to address 
maritime disputes peacefully.’’. 
(13) On July 13, 2016, the Vice Foreign Min-
ister of the People’s Republic of China, Liu 
Zhenmin, said that declaring an air defense identi-
fication zone in the South China Sea would depend 
on the threat China faces and stated that ‘‘[i]f our 
security is threatened, we of course have the right 
to set it up’’. 
(14) On July 18, 2016, the People’s Liberation 
Army Air Force of the People’s Republic of China 
stated that it had conducted a ‘‘combat air patrol’’ 
over the South China Sea and that it would become 
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‘‘regular practice’’ in the future. A spokesperson 
stated that the People’s Liberation Army Air Force 
‘‘will firmly defend national sovereignty, security and 
maritime interests, safeguard regional peace and 
stability, and cope with various threats and chal-
lenges’’. 
(15) On August 2, 2016, the Supreme People’s 
Court of the People’s Republic of China issued a ju-
dicial interpretation that people caught illegally fish-
ing in Chinese waters could be jailed for up to one 
year. 
(16) In the Agreement concerning the Ryukyu 
Islands and the Daito Islands with Related Arrange-
ments, signed at Washington and Tokyo June 17, 
1971 (23 UST 446), between the United States and 
Japan (commonly referred to as the ‘‘Okinawa Re-
version Treaty’’), the United States agreed to apply 
the Treaty of Mutual Cooperation and Security, with 
Agreed Minute and Exchanges of Notes (11 UST 
1632), signed at Washington January 19, 1961, be-
tween the United States and Japan, to the area cov-
ered by the Okinawa Reversion Treaty, including the 
Senkaku Islands. 
(17) In April 2014, President Barack Obama 
stated, ‘‘The policy of the United States is clear— 
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the Senkaku Islands are administered by Japan and 
therefore fall within the scope of Article 5 of the 
U.S.-Japan Treaty of Mutual Cooperation and Secu-
rity. And we oppose any unilateral attempts to un-
dermine Japan’s administration of these islands.’’. 
(18) In February 2017, President Donald 
Trump and Japanese Prime Minister Shinzo Abe 
issued a joint statement that ‘‘affirmed that Article 
V of the U.S.-Japan Treaty of Mutual Cooperation 
and Security covers the Senkaku Islands’’. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) ACCOUNT; CORRESPONDENT ACCOUNT; PAY-
ABLE-THROUGH
ACCOUNT.—The terms ‘‘account’’, 
‘‘correspondent account’’, and ‘‘payable-through ac-
count’’ have the meanings given those terms in sec-
tion 5318A of title 31, United States Code. 
(2) ALIEN.—The term ‘‘alien’’ has the meaning 
given that term in section 101(a) of the Immigration 
and Nationality Act (8 U.S.C. 1101(a)). 
(3) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional com-
mittees’’ means— 
(A) the Committee on Foreign Relations, 
the Committee on Armed Services, the Com-
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mittee on Banking, Housing, and Urban Af-
fairs, 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 Se-
lect Committee on Intelligence of the House of 
Representatives. 
(4) CHINESE
PERSON.—The term ‘‘Chinese 
person’’ means— 
(A) an individual who is a citizen or na-
tional 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 ‘‘fi-
nancial institution’’ means a financial institution 
specified in subparagraph (A), (B), (C), (D), (E), 
(F), (G), (H), (I), (J), (K), (M), (N), (P), (R), (T), 
(Y), or (Z) of section 5312(a)(2) of title 31, United 
States Code. 
(6) FOREIGN
FINANCIAL
INSTITUTION.—The 
term ‘‘foreign financial institution’’ has the meaning 
given that term in section 1010.605 of title 31, Code 
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of Federal Regulations (or any corresponding similar 
regulation or ruling). 
(7) KNOWINGLY.—The term ‘‘knowingly’’, with 
respect to conduct, a circumstance, or a result, 
means that a person has actual knowledge, or should 
have known, of the conduct, the circumstance, or the 
result. 
(8) PERSON.—The term ‘‘person’’ means any 
individual or entity. 
(9) 
UNITED
STATES
PERSON.—The 
term 
‘‘United States person’’ means— 
(A) a United States citizen or an alien law-
fully 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. 
SEC. 4. POLICY OF THE UNITED STATES WITH RESPECT TO 
THE SOUTH CHINA SEA AND THE EAST CHINA 
SEA. 
It is the policy of the United States— 
(1) to support the principle that disputes be-
tween countries should be resolved peacefully con-
sistent with international law; 
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(2) to reaffirm its unwavering commitment and 
support for allies and partners in the Asia-Pacific 
region, including longstanding United States pol-
icy— 
(A) regarding Article V of the Mutual De-
fense Treaty, signed at Washington August 30, 
1951 (3 UST 3947), between the United States 
and the Philippines; and 
(B) that Article V of the Mutual Defense 
Assistance Agreement, with Annexes, signed at 
Tokyo March 8, 1954 (5 UST 661), between 
the United States and Japan, applies to the 
Senkaku Islands, which are administered by 
Japan; and 
(3) to support the principle of freedom of navi-
gation and overflight and to continue to use the sea 
and airspace wherever international law allows. 
SEC. 5. SENSE OF CONGRESS WITH RESPECT TO THE 
SOUTH CHINA SEA AND THE EAST CHINA SEA. 
It is the sense of Congress that— 
(1) the United States— 
(A) opposes all claims in the maritime do-
mains that impinge on the rights, freedoms, 
and lawful use of the seas that belong to all 
countries; 
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(B) opposes unilateral actions by the gov-
ernment of any country seeking to change the 
status quo in the South China Sea through the 
use of coercion, intimidation, or military force; 
(C) opposes actions by the government of 
any country to interfere in any way in the free 
use of waters and airspace in the South China 
Sea or East China Sea; 
(D) opposes actions by the government of 
any country to prevent any other country from 
exercising its sovereign rights to the resources 
of the exclusive economic zone and continental 
shelf by making claims that have no support in 
international law; and 
(E) upholds the principle that territorial 
and maritime claims, including with respect to 
territorial waters or territorial seas, must be de-
rived from land features and otherwise comport 
with international law; 
(2) the People’s Republic of China should not 
continue to pursue illegitimate claims and to milita-
rize an area that is essential to global security; 
(3) the United States should— 
(A) continue and expand freedom of navi-
gation operations and overflights; 
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(B) reconsider the traditional policy of not 
taking a position on individual claims; and 
(C) respond to provocations by the Peo-
ple’s Republic of China with commensurate ac-
tions that impose costs on any attempts to un-
dermine security in the region; 
(4) the Senkaku Islands are covered by Article 
V of the Mutual Defense Assistance Agreement, with 
Annexes, signed at Tokyo March 8, 1954 (5 UST 
661), between the United States and Japan; and 
(5) the United States should firmly oppose any 
unilateral actions by the People’s Republic of China 
that seek to undermine Japan’s control of the 
Senkaku Islands. 
SEC. 6. 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 enact-
ment of this Act, the President shall impose the sanctions 
described in subsection (b) with respect to— 
(1) any Chinese person that contributes to con-
struction or development projects, including land 
reclamation, island-making, lighthouse construction, 
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building of base stations for mobile communications 
services, building of electricity and fuel supply facili-
ties, or civil infrastructure 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 indi-
rectly, actions or policies that threaten the peace, se-
curity, or stability of areas of the South China Sea 
contested by one or more members of the Associa-
tion 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 air-
craft to impose the sovereignty of the People’s Re-
public of China in those areas; 
(3) any Chinese person that engages, or at-
tempts to engage, in an activity or transaction that 
materially contributes to, or poses a risk of materi-
ally contributing to, an activity described in para-
graph (1) or (2); and 
(4) any person that— 
(A) is owned or controlled by a person de-
scribed in paragraph (1), (2), or (3); 
(B) is acting for or on behalf of such a 
person; or 
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(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 et seq.), all transactions in all property 
and interests in property of any person subject to 
subsection (a) if such property and interests in prop-
erty are in the United States, come within the 
United States, or are or come within the possession 
or control of a United States person. 
(2) EXCLUSION
FROM
UNITED
STATES.—The 
Secretary of State shall deny a visa to, and the Sec-
retary 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 Sec-
retary of Homeland Security (or a designee of one 
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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
EMER-
GENCY REQUIREMENT.—The requirements of section 
202 of the International Emergency Economic Pow-
ers Act (50 U.S.C. 1701) shall not apply for pur-
poses of subsection (b)(1). 
(2) COMPLIANCE WITH UNITED NATIONS HEAD-
QUARTERS 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 regard-
ing the Headquarters of the United Nations, signed 
at Lake Success June 26, 1947, and entered into 
force November 21, 1947, between the United Na-
tions and the United States. 
(3) PENALTIES.—The penalties provided for in 
subsections (b) and (c) of section 206 of the Inter-
national Emergency Economic Powers Act (50 
U.S.C. 1705) shall apply to a person that violates, 
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attempts to violate, conspires to violate, or causes a 
violation of regulations prescribed under subsection 
(b)(1) to the same extent that such penalties apply 
to a person that commits an unlawful act described 
in subsection (a) of such section 206. 
(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 cor-
respondent account or a payable-through account by 
a foreign financial institution that the President de-
termines 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 trans-
action 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; 
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(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, in-
cluding Fiery Cross, Mischief, or Subi Reefs; 
(E) established territorial baselines around 
the Spratly Island chain; 
(F) increased harassment of Philippine 
vessels; or 
(G) increased provocative actions against 
the Japanese Coast Guard or Maritime Self-De-
fense 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 congres-
sional committees. 
(B) FORM
OF
REPORT.—The report re-
quired by subparagraph (A) shall be submitted 
in unclassified form, but may include a classi-
fied annex. 
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SEC. 7. DETERMINATIONS AND REPORT ON CHINESE COM-
PANIES ACTIVE IN THE SOUTH CHINA SEA 
AND THE EAST CHINA SEA. 
(a) IN GENERAL.—The Secretary of State shall sub-
mit to the appropriate congressional committees a report 
that identifies each Chinese person the Secretary deter-
mines is engaged in the activities described in section 6(a). 
(b) CONSIDERATION.—In preparing the report re-
quired under subsection (a), the Secretary shall make spe-
cific findings with respect to whether each of the following 
persons is involved in the activities described in section 
6(a): 
(1) CCCC Tianjin Dredging Co., Ltd. 
(2) CCCC Dredging (Group) Company, Ltd. 
(3) China Communications Construction Com-
pany (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 Bu-
reau. 
(10) Hubei Jiangtian Construction Group. 
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(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.— 
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(1) SUBMISSION.—The report required by sub-
section (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 deter-
mines it is necessary for the national security inter-
ests of the United States to do so. 
(3) 
PUBLIC
AVAILABILITY.—The 
Secretary 
shall publish the unclassified part of the report re-
quired by subsection (a) on a publicly available 
website of the Department of State. 
SEC. 8. 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 
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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. 
SEC. 9. PROHIBITION ON FACILITATING CERTAIN INVEST-
MENTS 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 guar-
antee any investment, provide insurance, or underwriting 
in the South China Sea or the East China Sea that in-
volves any person with respect to which sanctions are im-
posed under section 6(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 sub-
sections (b) and (c) of section 206 of the International 
Emergency Economic Powers Act (50 U.S.C. 1705) shall 
apply to a person that violates, attempts to violate, con-
spires to violate, or causes a violation of regulations pre-
scribed under this section to the same extent that such 
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