Title: Holding China Accountable Act
Policy area: Finance and Financial Sector

Summary:
Holding China Accountable Act
This bill prohibits certain Chinese nationals from receiving visas, requires higher education institutions to disclose certain foreign gifts, and restricts the use of foreign public accounting firms by foreign issuers of securities.
Specified visas may not be issued to Chinese nationals seeking to enter the United States for the purpose of (1) studying science, technology, engineering, mathematics, or a related field; (2) employment in science, technology, engineering, mathematics, or a related field; or (3) attending a business meeting, conference, or academic or cultural exchange that includes activities related to science, technology, engineering, mathematics, or a related field.
The bill also lowers the disclosure threshold regarding gifts to higher education institutions from China, Russia, Iran, and North Korea.
Additionally, the bill requires certain disclosures from foreign issuers of securities that use, for the required audit report to the Securities and Exchange Commission, a foreign public accounting firm that is not subject to inspection by the Public Company Accounting Oversight Board. If an issuer uses such a foreign public accounting firm, the issuer is generally prohibited from listing its securities on a national securities exchange.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7181 Introduced in House (IH)]

<DOC>






116th CONGRESS
  2d Session
                                H. R. 7181

 To amend the Sarbanes-Oxley Act of 2002 to require the Public Company 
   Accounting Oversight Board to maintain a list of certain foreign 
  issuers, to prohibit certain nationals of the People's Republic of 
    China from receiving nonimmigrant visas, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 11, 2020

  Mr. Nunes (for himself, Mr. Conaway, Mr. Crawford, Mr. Turner, Mr. 
  Stewart, Ms. Stefanik, Mr. Wenstrup, Mr. Calvert, Mr. Marshall, Mr. 
   Gibbs, Mr. Gaetz, Mr. Wilson of South Carolina, Mr. Holding, Mr. 
  Collins of Georgia, Mr. Diaz-Balart, Mr. Garcia of California, Mr. 
  Cook, Mr. Kustoff of Tennessee, Mr. McClintock, Mr. Bishop of North 
Carolina, Mr. Spano, Mr. Brooks of Alabama, and Mr. Rouzer) introduced 
 the following bill; which was referred to the Committee on Financial 
   Services, and in addition to the Committees on the Judiciary, and 
Education and Labor, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To amend the Sarbanes-Oxley Act of 2002 to require the Public Company 
   Accounting Oversight Board to maintain a list of certain foreign 
  issuers, to prohibit certain nationals of the People's Republic of 
    China from receiving nonimmigrant visas, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Holding China Accountable Act''.

SEC. 2. DISCLOSURES AND PROHIBITION AGAINST THE LISTING OF CERTAIN 
              FIRMS ON NATIONAL SECURITIES EXCHANGES.

    (a) Disclosure.--
            (1) List of certain foreign issuers and covered foreign 
        public accounting firms.--
                    (A) In general.--The Commission shall maintain a 
                publicly available list of--
                            (i) each foreign issuer, an audit report of 
                        which--
                                    (I) is prepared by a foreign public 
                                accounting firm; and
                                    (II) the Board is not able to 
                                inspect or investigate because of a 
                                position taken by an authority that is 
                                outside of the United States;
                            (ii) each covered foreign public accounting 
                        firm that has prepared an audit report 
                        identified under clause (i); and
                            (iii) the jurisdiction in which each 
                        covered foreign public accounting firm 
                        identified under clause (ii) is organized or 
                        operating.
                    (B) Role of the board.--Not less frequently than 
                annually, the Board shall provide to the Commission the 
                information that is required for the Commission to 
                carry out subparagraph (A).
            (2) Annual report disclosure.--
                    (A) Disclosure.--Each applicable foreign issuer 
                shall disclose in each covered form filed by the 
                applicable foreign issuer--
                            (i) that, during the period covered by 
                        covered form, a covered foreign public 
                        accounting firm has prepared an audit report 
                        for the issuer;
                            (ii) the percentage of the shares of the 
                        issuer owned by governmental entities in the 
                        foreign jurisdiction in which the issuer is 
                        incorporated or otherwise organized;
                            (iii) whether governmental entities in a 
                        covered jurisdiction with respect to any 
                        covered foreign public accounting firm that has 
                        prepared an audit report for the issuer during 
                        the period covered by the form have a 
                        controlling financial interest with respect to 
                        the issuer; and
                            (iv) the name of any official of the 
                        Chinese Communist Party who is a member of the 
                        board of directors of the issuer or the 
                        operating entity with respect to the issuer.
                    (B) Update of rules.--Not later than 270 days after 
                the date of enactment of this Act, and after providing 
                the opportunity for public notice and comment, the 
                Commission shall make any amendments to the rules of 
                the Commission that are required as a result of the 
                requirements of this subsection.
                    (C) Effective date.--This subsection shall take 
                effect on the date on which the Commission completes 
                the amendments required under subparagraph (B).
            (3) Disclosure by brokers and dealers.--Section 15(n) of 
        the Securities Exchange Act of 1934 (15 U.S.C. 78o(n)) is 
        amended--
                    (A) in paragraph (1), by striking ``Commission may 
                issue'' and all that follows through the period at the 
                end and inserting the following: ``Commission--
                    ``(A) shall issue rules that require a broker and a 
                dealer to disclose, with respect to any advice, 
                analysis, or report of the broker or dealer to a retail 
                investor regarding the securities of a foreign issuer, 
                whether a covered foreign public accounting firm has 
                prepared an audit report for the foreign issuer; and
                    ``(B) in addition to the rules required under 
                subparagraph (A), may issue rules designating documents 
                or information that shall be provided by a broker or 
                dealer to a retail investor before the purchase of an 
                investment product or service by the retail 
                investor.''; and
                    (B) by adding at the end the following:
            ``(4) Definitions.--In this subsection, the terms `audit 
        report', `covered foreign public accounting firm', and `foreign 
        issuer' have the meanings given the terms in section 2 of the 
        EQUITABLE Act.''.
    (b) Prohibition Against the Listing of Certain Firms on National 
Securities Exchanges.--
            (1) In general.--Section 6(b) of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78f(b)) is amended by adding at the end 
        the following:
            ``(11)(A) The rules of the exchange prohibit the initial 
        listing, after the date of enactment of this paragraph, of any 
        security of an issuer for which a covered foreign public 
        accounting firm has prepared an audit report.
            ``(B) Nothing in subparagraph (A) may be construed to 
        prevent an exchange from listing a security on the exchange on 
        or after the date of enactment of this paragraph if that 
        security was listed on the exchange or a national securities 
        exchange before the date of enactment of this paragraph.
            ``(C) In this paragraph, the terms `audit report' and 
        `covered foreign public accounting firm' have the meanings 
        given the terms in section 2 of the EQUITABLE Act.
            ``(12)(A) The rules of the exchange prohibit the listing of 
        any security of a foreign issuer that, beginning in 2025, has 
        been identified under section 3(a)(1)(A) of the EQUITABLE Act 
        in 3 consecutive years.
            ``(B) Nothing in subparagraph (A) may be construed to 
        prevent an exchange from listing a security of a foreign issuer 
        described in that subparagraph beginning on the date on which 
        the issuer submits to the Commission an audit report for the 
        issuer that is prepared by a registered public accounting firm 
        that the Public Company Accounting Oversight Board has 
        inspected, or is able to inspect, under section 104 of the 
        Sarbanes-Oxley Act of 2002 (15 U.S.C. 7214).
            ``(C) In this paragraph--
                    ``(i) the terms `audit report' and `registered 
                public accounting firm' have the meanings given the 
                terms in section 2(a) of the Sarbanes-Oxley Act of 2002 
                (15 U.S.C. 7201(a)); and
                    ``(ii) the terms `covered foreign public accounting 
                firm' and `foreign issuer' have the meanings given the 
                terms in section 2 of the EQUITABLE Act.''.
            (2) Rules.--
                    (A) Proposals.--Not later than 90 days after the 
                date of enactment of this Act, each national securities 
                exchange shall, in accordance with section 19(b) of the 
                Securities Exchange Act of 1934 (15 U.S.C. 78s(b)) and 
                any rules prescribed by the Commission under that 
                section, file with the Commission any proposed change 
                to the rules of the exchange that is required as a 
                result of the amendments made by this section.
                    (B) Adoption.--Not later than 1 year after the date 
                of enactment of this Act, each national securities 
                exchange shall have each proposed change described in 
                paragraph (1) approved by the Commission.
    (c) Definitions.--In this section--
            (1) the term ``applicable foreign issuer'' means a foreign 
        issuer--
                    (A) that is required to file a covered form; and
                    (B) for which, during the period covered by the 
                filing described in subparagraph (A), a covered foreign 
                public accounting firm has prepared an audit report for 
                the issuer;
            (2) the term ``audit report'' has the meaning given the 
        term in section 2(a) of the Sarbanes-Oxley Act of 2002 (15 
        U.S.C. 7201(a));
            (3) the term ``Board'' means the Public Company Accounting 
        Oversight Board;
            (4) the term ``Commission'' means the Securities and 
        Exchange Commission;
            (5) the term ``covered foreign public accounting firm'' 
        means a foreign public accounting firm that the Board is unable 
        to inspect or investigate under the Sarbanes-Oxley Act of 2002 
        (15 U.S.C. 7201 et seq.) because of a position taken by an 
        authority outside of the United States;
            (6) the term ``covered form''--
                    (A) means--
                            (i) the form described in section 249.310 
                        of title 17, Code of Federal Regulations, or 
                        any successor regulation; and
                            (ii) the form described in section 249.220f 
                        of title 17, Code of Federal Regulations, or 
                        any successor regulation; and
                    (B) includes a form that--
                            (i) is the equivalent of, or substantially 
                        similar to, the form described in clause (i) or 
                        (ii) of subparagraph (A); and
                            (ii) a foreign issuer files with the 
                        Commission under the Securities Exchange Act of 
                        1934 (15 U.S.C. 78a et seq.) or rules issued 
                        under that Act;
            (7) the term ``covered jurisdiction'' means the foreign 
        jurisdiction in which the position described in paragraph (5) 
        is taken with respect to a covered foreign public accounting 
        firm that prepares an audit report for an applicable foreign 
        issuer;
            (8) the term ``exchange'' has the meaning given the term in 
        section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78a(a));
            (9) the term ``foreign issuer'' has the meaning given the 
        term in section 240.3b-4 of title 17, Code of Federal 
        Regulations, or any successor regulation;
            (10) the term ``foreign public accounting firm'' has the 
        meaning given the term in section 106(g) of the Sarbanes-Oxley 
        Act of 2002 (15 U.S.C. 7216(g));
            (11) the term ``national securities exchange'' means an 
        exchange that is registered with the Commission under section 6 
        of the Securities Exchange Act of 1934 (15 U.S.C. 78f); and
            (12) the term ``public accounting firm'' has the meaning 
        given the term in section 2(a) of the Sarbanes-Oxley Act of 
        2002 (15 U.S.C. 7201(a)).

SEC. 3. RESTRICTION ON ISSUANCE OF NONIMMIGRANT VISAS TO NATIONALS OF 
              CHINA.

    (a) Restriction.--The Secretary of State may not issue a visa to, 
and the Secretary of Homeland Security shall deny entry to the United 
States of, an alien under section 101(a)(15) of the Immigration and 
Nationality Act (8 U.S.C. 1101(a)(15)) if the alien is a national of 
the People's Republic of China seeking to enter the United States for 
the purpose of--
            (1) studying science, technology, engineering, mathematics, 
        or a related field;
            (2) employment in science, technology, engineering, 
        mathematics, or a related field; or
            (3) attending a business meeting, conference, or academic 
        or cultural exchange, that includes activities related to 
        science, technology, engineering, mathematics, or a related 
        field.
    (b) Applicability.--The restriction under subsection (a) shall not 
apply for any year in which the President certifies to Congress that--
            (1) the People's Republic of China has not provided state 
        support of cyber espionage against a United States company 
        during the preceding year; and
            (2) no individual or entity present in the United States 
        has engaged in espionage against a United States company on 
        behalf of the People's Republic of China during the preceding 
        year.
    (c) Definitions.--In this section:
            (1) Cyber espionage.--The term ``cyber espionage'' means 
        unauthorized access to a communications network, a 
        communications system, or a device connected to such a network 
        or system that--
                    (A) is carried out by a foreign government or any 
                individual or entity working on behalf of a foreign 
                government; and
                    (B) is for the purpose of--
                            (i) collecting information related to a 
                        copyrighted or copyrightable work, patented or 
                        patentable invention, trademarked good or 
                        service, or trade secret (as such term is 
                        defined in section 1839 of title 18, United 
                        States Code); or
                            (ii) disruption, destruction, or 
                        manipulation of, or other change to, such 
                        network, system, or device or any information 
                        stored on or transmitted by such network, 
                        system, or device.
            (2) Espionage.--The term ``espionage'' means unauthorized 
        access to or collection of information related to a copyrighted 
        or copyrightable work, patented or patentable invention, 
        trademarked good or service, or trade secret (as such term is 
        defined in section 1839 of title 18, United States Code) by a 
        foreign government or any individual or entity working on 
        behalf of a foreign government.
            (3) United states company.--The term ``United States 
        company'' means an organization organized under the laws of the 
        United States or a State or political subdivision thereof.

SEC. 4. DISCLOSURES OF FOREIGN GIFTS.

    (a) Short Title.--This section may be cited as the ``Foreign 
Adversary Funding in Higher Education Act''.
    (b) Special Rule.--Section 117(a) of the Higher Education Act of 
1965 (20 U.S.C. 1011f(a)) is amended--
            (1) by striking ``Whenever any'' and by inserting the 
        following:
            ``(1) In general.--Subject to paragraph (2), whenever 
        any''; and
            (2) by adding at the end the following:
            ``(2) Special rule.--
                    ``(A) In general.--Notwithstanding paragraph (1), 
                whenever any institution is owned or controlled by a 
                foreign source listed in subparagraph (B) or receives a 
                gift from or enters into a contract with that foreign 
                source, paragraph (1) shall be applied by substituting 
                `$25,000' for `$250,000'.
                    ``(B) Foreign source.--A foreign source listed in 
                this subparagraph is:
                            ``(i) The People's Republic of China.
                            ``(ii) The Russian Federation.
                            ``(iii) The Islamic Republic of Iran.
                            ``(iv) The Democratic People's Republic of 
                        Korea.''.
    (c) Enforcement.--Section 117(f)(2) of the Higher Education Act of 
1965 (20 U.S.C. 1011f(f)(2)) is amended by inserting ``an amount equal 
to the amount that the institution failed to report under this section 
and'' before ``the full costs''.
    (d) Web Portal.--Section 117 of the Higher Education Act of 1965 
(20 U.S.C. 1011f) is further amended--
            (1) by redesignating subsections (g) and (h) as subsections 
        (h) and (i), respectively; and
            (2) by inserting after subsection (f), the following:
    ``(g) Web Portal.--Not later than 180 days after the date of 
enactment of the `Foreign Adversary Funding in Higher Education Act', 
the Secretary shall establish a publicly available web portal that--
            ``(1) enables electronic filing of disclosure reports under 
        this section; and
            ``(2) includes any reports filed before such date of 
        enactment.''.
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