I 116th CONGRESS 2d Session H. R. 8329 IN THE HOUSE OF REPRESENTATIVES September 21, 2020 Mr. McCaul introduced the following bill; which was referred to the Committee on Foreign Affairs A BILL To eliminate or substantially reduce the global availability of critical technologies to United States arms embargoed countries, and for other purposes.

1. Short title This Act may be cited as the Revitalizing Multilateral Export Control Diplomacy for Critical Technologies Act . 2. Findings and sense of Congress (a) Findings Congress finds the following: (1) United States arms embargoed countries are implementing malign and aggressive industrial policies using non-market means and engaging in predatory investment to gain control of critical technologies in order to achieve market dominance and control supply chains. (2) These countries integrate their industrial policies into initiatives that break down the barriers and distinctions between the commercial sector and the military to ensure that critical technologies support the development of their military. (3) These countries seek to obtain critical technologies from the United States and covered United States allies and partners. (b) Sense of Congress It is the sense of Congress that— (1) the fast-paced nature of technological innovation and the systemic diversion of technological innovation and know-how by United States arms embargoed countries for the benefit of developing and enhancing their militaries, challenges the effectiveness of existing multilateral fora established specifically to prevent such export control risks, such as the Wassenaar Arrangement; and (2) the ability of United States arms embargoed countries to access critical technologies that affect the national security of the United States should spur the United States to work with covered United States allies and partners to develop unified export control policies to eliminate or substantially reduce the global availability of critical technologies to United States arms embargoed countries. 3. Strategy to control the availability of critical technologies (a) Statement of policy It is the policy of the United States to— (1) work with covered United States allies and partners to develop unified export control policies to eliminate or substantially reduce the global availability of critical technologies to United States arms embargoed countries, including by— (A) leading regular and rapid bilateral and plurilateral negotiations with respect to specific critical technologies with different groupings of such allies and partners; (B) using policy instruments, including tax, investment, licensing, lending, and trade, to provide incentives to such allies and partners; and (C) using, if necessary, existing authorities, including trade remedies, the United States Munitions List, the Entity List, economic sanctions, and other authorities available under the International Emergency Economic Powers Act ( 50 U.S.C. 1701 et seq.); (2) ensure critical technologies do not advance the economic strategies, industrial policy goals, or military capabilities of United States arms embargoed countries; (3) carry out joint research and development projects with covered United States allies and partners, with adequate safeguards for the protection and promotion of any resulting intellectual property, to— (A) advance a broad range of scientific and technical disciplines, including with respect to critical technologies that may be affected by the implementation of the strategy required by subsection (b); and (B) develop alternative markets to compensate for lost sales opportunities; and (4) enhance the sharing of information with covered United States allies and partners that have entered into a multilateral export control agreement with the United States described in section 4(d). (b) Strategy (1) In general The President, in consultation with the Secretary of Commerce, the Secretary of Defense, the Secretary of State, the Director of National Intelligence, the Secretary of the Treasury, and the Secretary of Energy, shall develop a strategy to work with covered United States allies and partners to develop unified export control policies to eliminate or substantially reduce the global availability of critical technologies to United States arms embargoed countries. (2) Industry consultation (A) In general The President shall— (i) inform and solicit input in writing from representatives of relevant United States industries in developing the strategy required by paragraph (1); and (ii) submit to the appropriate congressional committees input received pursuant to clause (i). (B) Disclosure of confidential information prohibited No such committee, or member thereof, may disclose any information made available under subparagraph (A)(ii) that is submitted on a confidential basis unless the committee determines that the withholding of that information is contrary to the national interest of the United States. (3) Matters to be included The strategy required by this subsection shall include the following: (A) An identification of critical technologies that are priorities for— (i) the national security and the defense industrial base of the United States; and (ii) the economic strategies, industrial policies, and military development of United States arms embargoed countries. (B) An identification of United States export control policies for critical technologies identified under subparagraph (A). (C) An identification of covered United States allies and partners and their share of the global market with respect to critical technologies identified under subparagraph (A). (D) A description of ongoing and future efforts to work with covered United States allies and partners to develop unified export control policies in accordance with the United States policy described in subsection (a). (E) An assessment of the effectiveness and methods of past efforts by United States arms embargoed countries to circumvent export control policies relating to critical technologies identified under subparagraph (A). (F) The establishment of a working group, to include appropriate representatives from the Department of Commerce, the Department of Defense, the Department of State, the Office of the Director of National Intelligence, the Department of the Treasury, the Department of Energy, and other relevant Federal agencies, to implement the strategy. (c) Report (1) In general Not later than 120 days after the date of the enactment of this Act, and annually thereafter for 4 years, the President shall submit to the appropriate congressional committees a report in writing that contains— (A) the strategy required by subsection (b); and (B) a summary of input solicited and received from representatives of relevant United States industries in developing the strategy required by subsection (b). (2) Form The report required by this subsection shall— (A) be submitted in unclassified form but may contain a classified annex; and (B) be made available on a publicly accessible government website. 4. Actions to secure the global semiconductor supply chain (a) Finding Congress finds that, according to the Second Quarter Recommendations of the congressionally-established National Security Commission on Artificial Intelligence, high-end semiconductor chips with feature sizes 45 nanometers and below are the most useful for advanced artificial intelligence capabilities. (b) Statement of policy It is the policy of the United States— (1) to work with covered United States allies and partners to secure the semiconductor supply chain in a manner that eliminates or substantially reduces its presence in or reliance on United States arms embargoed countries; (2) to ensure United States semiconductor manufacturing equipment, design tools, and technical data are not made available to United States arms embargoed countries in achieving their industrial policy goals that threaten United States national security interests; and (3) to proceed expeditiously in diplomatic efforts with covered United States allies and partners to develop unified export control policies to eliminate or substantially reduce the global availability of critical technologies to United States arms embargoed countries. (c) Identification provisions (1) Identification of semiconductor manufacturing equipment, design tools, and related technical data Not later than 180 days after the date of the enactment of this Act, and on a periodic basis thereafter, the Secretary of Commerce shall identify semiconductor manufacturing equipment, design tools, and related technical data that— (A) are not manufactured or produced in United States arms embargoed countries; and (B) are used to fabricate high-end semiconductor chips with feature sizes of 45 nanometers and below that the Secretary determines threaten the national security and foreign policy interests of the United States. (2) Identification of entities that fabricate semiconductor chips with feature sizes of 45 nanometers and below Not later than 180 days after the date of the enactment of this Act, and on a periodic basis thereafter, the Secretary of Commerce shall identify entities in United States arms embargoed countries that— (A) own or control semiconductor manufacturing equipment, design tools, and related technical data that are identified pursuant to paragraph (1); and (B) are required under the laws of United States arms embargoed countries to cooperate with the militaries of such countries relating to the use of such semiconductor manufacturing equipment, design tools, and related technical data to fabricate high-end semiconductor chips described in paragraph (1)(B). (3) Industry consultation (A) In general The President shall— (i) inform and solicit input in writing from representatives of relevant United States industries in— (I) identifying semiconductor manufacturing equipment, design tools, and related technical data pursuant to paragraph (1); and (II) identifying entities pursuant to paragraph (2); and (ii) submit to the appropriate congressional committees input received pursuant to clause (i). (B) Disclosure of confidential information prohibited No such committee, or member thereof, may disclose any information made available under subparagraph (A)(ii) that is submitted on a confidential basis unless the committee determines that the withholding of that information is contrary to the national interest of the United States. (d) Multilateral agreement (1) In general The working group established pursuant to section 3(b)(3)(F) shall, as soon as practicable after the date of the enactment of this Act, seek to establish a multilateral agreement with covered United States allies and partners to develop unified export control policies to eliminate or substantially reduce the global availability of semiconductor manufacturing equipment, design tools, and related technical data identified pursuant to subsection (c)(1) to United States arms embargoed countries, including entities in United States arms embargoed countries identified pursuant to subsection (c)(2). (2) Actions after agreement implemented (A) In general Not later than 30 days after the date on which a multilateral agreement described in paragraph (1) is implemented, the Secretary of Commerce— (i) shall exercise the authorities under the Export Control Reform Act of 2018 ( 50 U.S.C. 4801 et seq.)— (I) to include semiconductor manufacturing equipment, design tools, and related technical data with respect to which the agreement applies on the Commerce Control List; and (II) to presumptively disapprove any application for a license to export, reexport, or provide for an in-country transfer of such semiconductor manufacturing equipment, design tools, and related technical data to a United States arms embargoed country; and (ii) shall include entities identified pursuant to the agreement on the Entity List. (B) Annual meetings (i) In general The working group shall seek to meet on an annual basis with covered United States allies and partners that are parties to the agreement to— (I) exchange information to— (aa) facilitate development of unified export control policies with respect to trends in technology that could pose risks to the national security of the United States and such other parties to the agreement; and (bb) provide for the sharing of information with respect to specific technologies and entities acquiring such technologies as appropriate to address such risks to the national security of the United States and such other parties to the agreement; (II) verify that all parties to the agreement are adhering to a common standard of controls and licensing and are otherwise in compliance with the terms of their commitments under the agreement; (III) review the technology controls and licensing policies for semiconductor manufacturing equipment, design tools, and related technical data with respect to which the agreement applies and as necessary update such controls and licensing policies. (ii) Industry consultation The President shall inform and solicit input in writing from representatives of relevant United States industries in advance of the meetings described in clause (i). (3) Certification if agreement not implemented (A) In general If a multilateral agreement described in paragraph (1) is not implemented within 1 year after the date of the enactment of this Act, the President shall certify to the appropriate congressional committees that it is not in the national security interest of the United States to— (i) include semiconductor manufacturing equipment, design tools, and related technical data identified pursuant to subsection (c)(1) on the Commerce Control List; and (ii) include entities identified pursuant to subsection (c)(2) on the Entity List. (B) Actions if certification not made If the President is unable to make the certification described in subparagraph (A), the President shall direct the Secretary of Commerce— (i) to include semiconductor manufacturing equipment, design tools, and related technical data identified pursuant to subsection (c)(1) on the Commerce Control List; and (ii) to include entities identified pursuant to subsection (c)(2) on the Entity List. 5. Critical Technology Export Control Fund (a) Establishment There is established in the Treasury of the United States a trust fund, to be known as the Critical Technology Export Control Fund (in this section referred to as the Fund ), consisting of— (1) amounts deposited into the Fund under subsection (b)(1); and (2) amounts that may be credited to the Fund under subsection (b)(2). (b) Amounts (1) Authorization of appropriations There are authorized to be appropriated $2,000,000,000 to be deposited in the Fund for fiscal year 2021. (2) Investment of amounts (A) In general The Secretary of the Treasury shall invest such portion of the Fund as is not required to meet current withdrawals in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States. (B) Interest and proceeds The interest on, and the proceeds from the sale or redemption of, any obligations held in the Fund shall be credited to and form a part of the Fund. (3) Availability of amounts (A) In general Amounts in the Fund shall remain available through the end of the 10th fiscal year beginning after the date of the enactment of this Act. (B) Remainder Any amounts remaining in the Fund after the end of the fiscal year described in subparagraph (A) shall be deposited in the general fund of the Treasury. (c) Use of amounts (1) In general The Secretary of State, in consultation with the working group established pursuant to section 3(b)(3)(F), shall use amounts in the Fund to carry out projects described in paragraph (2) with one or more covered United States allies and partners that enter into an agreement with the Secretary to develop a unified export control policy to eliminate or substantially reduce the global availability of a critical technology identified under section 3(b)(3)(A) to United States arms embargoed countries. (2) Projects described The projects described in this paragraph are joint research and development projects carried out by the United States and the covered United States allies and partners to develop basic and applied research, develop regulatory and enforcement capacity building, expand production capacity, and carry out other related activities with respect to the critical technology. (3) Rule of construction Nothing in this section may be construed to authorize the use of amounts in the Fund to carry out projects described in paragraph (2) that may benefit directly or indirectly entities in United States arms embargoed countries (d) Report by Secretary of State Not later than 1 year after the date of the enactment of this Act, and annually thereafter for each fiscal year during which amounts in the Fund are available under subsection (b)(3), the Secretary of State shall submit to the appropriate congressional committees a report on the implementation of this section. (e) Report by Comptroller General Not later than 2 years after the date of the enactment of this Act, the Comptroller General of the United States shall submit to the appropriate congressional committees a report evaluating the effectiveness of the Fund, including— (1) the effectiveness of projects supported by the Fund; and (2) an assessment of the merits of continuation of the Fund. 6. Sense of Congress It is the sense of Congress that the working group established pursuant to section 3(b)(3)(F) should, as soon as practicable after the date of the enactment of this Act, seek to establish a multilateral agreement with covered United States allies and partners to eliminate or substantially reduce the global availability of other critical technologies identified under section 3(b)(3)(A) to United States arms embargoed countries. 7. Definitions In this Act: (1) Appropriate congressional committees The term appropriate congressional committees means— (A) the Committee on Foreign Affairs and the Committee on Energy and Commerce of the House of Representatives; and (B) the Committee on Banking, Housing, and Urban Affairs and the Committee on Commerce, Science, and Transportation of the Senate. (2) Commerce Control List The term Commerce Control List means the list set forth in Supplement No. 1 to part 774 of the Export Administration Regulations. (3) Covered United States ally or partner The term covered United States ally or partner means a foreign country that— (A) is an ally or partner of the United States; and (B) (i) produces, designs, tests, manufactures, fabricates, or develops critical technologies; or (ii) for purposes of section 4, produces or manufactures semiconductor manufacturing equipment, design tools, and related technical data that— (I) are not manufactured or produced in United States arms embargoed countries; and (II) are used to fabricate high-end semiconductor chips with feature sizes of 45 nanometers and below that the Secretary of Commerce determines threaten the national security and foreign policy interests of the United States; and (4) Critical technologies The term critical technologies has the meaning given the term in section 721(a)(6) of the Defense Production Act of 1950 ( 50 U.S.C. 4565(a)(6) ); and (5) Entity List The term Entity List means the list maintained by the Bureau of Industry and Security and set forth in Supplement No. 4 to part 744 of the Export Administration Regulations. (6) Export Administration Regulations The term Export Administration Regulations means subchapter C of chapter VII of title 15, Code of Federal Regulations. (7) United States arms embargoed country The term United States arms embargoed country means a country— (A) identified in column D:5 of Country Group D in Supplement No. 1 to part 740 of the Export Administration Regulations; or (B) determined to be a proscribed country pursuant to section 126.1 of title 22, Code of Federal Regulations.