I 118th CONGRESS 2d Session H. R. 7759 IN THE HOUSE OF REPRESENTATIVES March 20, 2024 Mr. Sherman (for himself and Mrs. Spartz ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To prohibit the purchase of certain securities from covered entities, and for other purposes.

1. Short title This Act may be cited as the PRC Military and Human Rights Capital Markets Sanctions Act of 2024 . 2. Prohibition on purchase of certain securities from covered entities (a) In general Not later than 90 days after the date of the enactment of this Act, the President shall— (1) compile and maintain a single list of covered entities; (2) where possible, include in the list a unique identification number for each covered entity, such as a Committee on Uniform Securities Identification Procedures number or a Stock Exchange Daily Official List number; (3) make such list available to the public; and (4) publicly identify and prohibit the purchase, sale, or holding by a United States person (as defined under section 560.314 of title 31, Code of Federal Regulations) of a— (A) publicly traded security issued by a covered entity; (B) publicly traded security that is derivative of a publicly traded security issued by a covered entity; and (C) security that provides investment exposure to a publicly traded security issued by a covered entity. (b) Divestment required (1) In general Notwithstanding subsection (a), a United States person shall divest of all securities described in subsection (a)— (A) with respect to a security identified by the President under subsection (a) before the end of the 90-day period beginning on the date of the enactment of this Act, not later than 180 days after the date of the enactment of this Act; and (B) with respect to a security identified by the President under subsection (a) after the end of the 90-day period beginning on the date of the enactment of this Act, not later than 180 days after the date of such identification. (2) Facilitating divestment transactions Subsection (a) shall not apply to a United States person to the extent the person is facilitating the divestment of securities described under paragraph (1). (c) Penalties (1) In general A United States person that violates, attempts to violate, conspires to violate, or causes a violation of this Act shall be subject to the following penalties: (A) A civil penalty in an amount not to exceed the greater of— (i) $250,000; or (ii) an amount that is twice the amount of the transaction that is the basis of the violation with respect to which the penalty is imposed. (B) With respect to a United States person that willfully violates, willfully attempts to violate, willfully conspires to violate, or aids or abets in the commission of a violation of this Act shall be subject to a criminal penalty— (i) of a fine of not more than $1,000,000; or (ii) if such United States person is an individual, a fine of not more than $1,000,000, a term of imprisonment of not more than 20 years, or both. (2) Amount of a transaction defined For purposes of paragraph (1)(A)(ii), the term amount of a transaction means— (A) with respect to a purchase that violates this Act, the purchase price; (B) with respect to a sale that violates this Act, the sale price; and (C) with respect to the holding of a security that violates this Act, the fair market value of the security at the time of the violation. (d) Covered entity defined (1) In general In this section, the term covered entity means the following: (A) Any person that is on the list of Specially Designated Nationals and Blocked Persons maintained by the Office of Foreign Assets Control of the Department of the Treasury, or any person under common ownership or control of such person. (B) Any person on the Non-SDN Chinese Military-Industrial Complex Companies List (NS–CMIC List) maintained by the Office of Foreign Assets Control of the Department of the Treasury under Executive Order 14032 (86 Fed. Reg. 30145; relating to addressing the threat from securities investments that finance certain companies of the People’s Republic of China), or any person under common ownership or control of such person. (C) Any person that is a Chinese military company or a military-civil fusion contributor and included on the list maintained by the Department of Defense in accordance with section 1260H(b) of the National Defense Authorization Act for Fiscal Year 2021 ( 10 U.S.C. 113 note) as of the date of the enactment of this Act, or any person under common ownership or control of such person. (D) Any person that is a Chinese person and with respect to which sanctions have been imposed under the under the Global Magnitsky Human Rights Accountability Act ( 22 U.S.C. 10101 et seq. ), or any person under common ownership or control of such person. (E) Any person that is a Chinese person whose goods have been the subject of a Withhold Release Order pursuant to section 307 of the Tariff Act of 1930 ( 19 U.S.C. 1307 ) during the 2-year period ending on the date of the enactment of this Act, or any person under common ownership or control of such person. (F) Any person that is Chinese entity listed on the Entity List set forth in Supplement No. 4 to part 744 of the Export Administration Regulations. (G) Any Chinese person on the Uyghur Forced Labor Prevention Act Entity List, maintained by the Department of Homeland Security, or any person under common ownership or control of such person. (H) Any Chinese person on the Military End User List maintained by the Department of Commerce (Supplement 7 to part 744 of chapter VII, subchapter C of title 15, Code of Federal Regulations), or any person under common ownership or control of such person. (2) Control For purposes of paragraph (1), the term control has the meaning given that term under section 230.405 of title 17, Code of Federal Regulations.