A bill to prohibit and require notifications with respect to certain investments by United States persons in the People's Republic of China, and for other purposes.

Bill: 118-s-5598
Sponsor: full_name: Sen. Cornyn, John [R-TX]
Introduced: 2024-12-18
Policy area: Finance and Financial Sector
Latest action: action_date: 2024-12-18
text: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Summaries:

tv_txt: II 118th CONGRESS 2d Session S. 5598 IN THE SENATE OF THE UNITED STATES December 18 (legislative day, December 16), 2024 Mr. Cornyn (for himself, Mr. Casey , and Mr. Sullivan ) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To prohibit and require notifications with respect to certain investments by United States persons in the People's Republic of China, and for other purposes.

1. Prohibition and notification on investments relating to covered national security transactions The Defense Production Act of 1950 ( 50 U.S.C. 4501 et seq. ) is amended by adding at the end the following: VIII Prohibition and notification on investments relating to covered national security transactions 801. Prohibition on investments (a) In general The Secretary may prohibit, in accordance with regulations issued under subsection (e), a United States person from knowingly engaging in a covered national security transaction in a prohibited technology. (b) Evasion Any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate the prohibition set forth in subsection (a) is prohibited. (c) Waiver Subject to subsection (d), the Secretary is authorized to exempt from the prohibition set forth in subsection (a) any activity determined by the President, in consultation with the Secretary, the Secretary of Commerce and, as appropriate, the heads of other relevant Federal departments and agencies, to be in the national interest of the United States. (d) Congressional notification The Secretary shall— (1) notify the appropriate congressional committees not later than 5 business days after issuing a waiver under subsection (c); and (2) include in such notification an identification of the national interest justifying the use of the waiver. (e) Regulations (1) In general The Secretary, in consultation with the Secretary of Commerce and, as appropriate, the heads of other relevant Federal departments and agencies, may issue regulations to carry out this section in accordance with subchapter II of chapter 5 and chapter 7 of title 5, United States Code (commonly known as Administrative Procedure Act ). (2) Non-binding feedback (A) In general The regulations issued under paragraph (1) shall include a process under which a person can request non-binding feedback on a confidential basis as to whether a transaction would constitute a covered national security transaction in a prohibited technology. (B) Authority to limit frivolous feedback requests In establishing the process required by subparagraph (A), the Secretary may prescribe limitations on requests for feedback identified as frivolous for purposes of this subsection. (3) Notice and opportunity to cure (A) In general The regulations issued under paragraph (1) shall account for whether a United States person has self-identified a violation of the prohibition set forth in subsection (a) in determining the legal consequences of that violation. (B) Self-disclosure letters The regulations issued under paragraph (1) shall dictate the form and content of a letter of self-disclosure, which shall include relevant facts about the violation, why the United States person believes its activity to have violated the prohibition set forth in subsection (a), and a proposal for mitigation of the harm of such action. (4) Public notice and comment The regulations issued under paragraph (1) shall be subject to public notice and comment. (5) Low-burden regulations In issuing regulations under paragraph (1), the Secretary shall balance the priority of protecting the national security interest of the United States while, to the extent practicable— (A) minimizing the cost and complexity of compliance for affected parties, including the duplication of reporting requirements under current regulations; (B) adopting the least burdensome alternative that achieves regulatory objectives; and (C) prioritizing transparency and stakeholder involvement in the process of issuing the rules. (6) Penalties (A) In general The regulations issued under paragraph (1) shall provide for the imposition of civil penalties described in subparagraph (B) for violations of the prohibition set forth in subsection (a). (B) Penalties described (i) Unlawful acts It shall be unlawful for a person to violate, attempt to violate, conspire to violate, or cause a violation of any license, order, regulation, notification requirement, or prohibition issued under this section. (ii) Civil penalty The Secretary may impose a civil penalty on any person who commits an unlawful act described in clause (i) 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. (iii) Divestment The Secretary may compel the divestment of a covered national security transaction in a prohibited technology determined to be in violation of this title. (iv) Relief The President may direct the Attorney General of the United States to seek appropriate relief, including divestment relief, in the district courts of the United States, in order to implement and enforce this title. (7) Burden of proof In accordance with section 556(d) of title 5, United States Code, in an enforcement action for a violation of the prohibition set forth in subsection (a), the burden of proof shall be upon the Secretary. 802. Notification on investments (a) Mandatory notification Not later than 450 days after the date of the enactment of this title, the Secretary shall issue regulations prescribed in accordance with subsection (b), to require a United States person that engages in a covered national security transaction in a prohibited technology (unless the Secretary has exercised the authority provided by section 801(a) to prohibit knowingly engaging in such covered national security transaction) or a notifiable technology to submit to the Secretary a written notification of the transaction not later than 30 days after the completion date of the transaction. (b) Regulations (1) In general Not later than 450 days after the date of the enactment of this title, the Secretary, in consultation with the Secretary of Commerce and, as appropriate, the heads of other relevant Federal departments and agencies, shall issue regulations to carry out this section in accordance with subchapter II of chapter 5 and chapter 7 of title 5, United States Code (commonly known as Administrative Procedure Act ). (2) Public notice and comment The regulations issued under paragraph (1) shall be subject to public notice and comment. (3) Low-burden regulations In issuing regulations under paragraph (1), the Secretary shall balance the priority of protecting the national security interest of the United States while, to the extent practicable— (A) minimizing the cost and complexity of compliance for affected parties, including the duplication of reporting requirements under current regulation; (B) adopting the least burdensome alternative that achieves regulatory objectives; and (C) prioritizing transparency and stakeholder involvement in the process of issuing the rules. (4) Penalties (A) In general The regulations issued under paragraph (1) shall provide for the imposition of civil penalties described in subparagraph (B) for violations of the notification requirement set forth in subsection (a). (B) Penalties described (i) Unlawful acts It shall be unlawful for a person to violate, attempt to violate, conspire to violate, or cause a violation of any license, order, regulation, notification requirement, or prohibition issued under this section. (ii) Civil penalty A civil penalty may be imposed on any person who commits an unlawful act described in clause (i) 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. (5) Burden of proof In accordance with section 556(d) of title 5, United States Code, in an enforcement action for a violation of the prohibition set forth in subsection (a), the burden of proof shall be upon the Secretary. (6) Completeness of notification (A) In general The Secretary shall, upon receipt of a notification under subsection (a), and in consultation with the Secretary of Commerce, promptly inspect the notification for completeness. (B) Incomplete notifications If a notification submitted under subsection (a) is incomplete, the Secretary shall promptly inform the United States person that submits the notification that the notification is not complete and provide an explanation of relevant material respects in which the notification is not complete. (7) Identification of non-notified activity The Secretary, in coordination with the Secretary of Commerce, shall establish a process to identify covered national security transactions in a prohibited technology or a notifiable technology for which— (A) a notification is not submitted to the Secretary under subsection (a); and (B) information is reasonably available. (c) Confidentiality of information (1) In general Except as provided in paragraph (2), any information or documentary material filed with the Secretary pursuant to this section shall be exempt from disclosure under section 552(b)(3) of title 5, United States Code, and no such information or documentary material may be made public by any government agency or Member of Congress. (2) Exceptions The exemption from disclosure provided by paragraph (1) shall not prevent the disclosure of the following: (A) Information relevant to any administrative or judicial action or proceeding. (B) Information provided to Congress or any of the appropriate congressional committees. (C) Information important to the national security analysis or actions of the Secretary to any domestic governmental entity, or to any foreign governmental entity of an ally or partner of the United States, under the direction and authorization of the Secretary, only to the extent necessary for national security purposes, and subject to appropriate confidentiality and classification requirements. (D) Information that the parties have consented to be disclosed to third parties. (E) Information where the disclosure of such information is determined by the Secretary to be in the national security interest. (d) Inapplicability If the Secretary prohibits a covered national security transaction in a prohibited technology under section 801, the requirements of this section shall not apply with respect to the covered national security transaction. 803. Report (a) In general Not later than one year after the date on which the regulations issued under section 801(e) take effect, and not less frequently than annually thereafter for 7 years, the Secretary, in consultation with the Secretary of Commerce, shall submit to the appropriate congressional committees a report that— (1) lists all enforcement actions taken subject to the regulations during the year preceding submission of the report, which includes, with respect to each such action, a description of— (A) the prohibited technology or notifiable technology; (B) the covered national security transaction; and (C) the covered foreign person; (2) provides an assessment of whether Congress should amend the definition of the term prohibited technology by— (A) identifying additional technologies, not currently listed as a prohibited technology, that the Secretary, in consultation with the Secretary of Commerce and, as applicable, the Secretary of Defense, the Secretary of State, the Secretary of Energy, the Director of National Intelligence, and the heads of any other relevant Federal agencies, determines may pose an acute threat to the national security of the United States if developed or acquired by a country of concern; (B) explaining why each technology identified in subparagraph (A) may pose an acute threat to the national security of the United States if developed or acquired by a country of concern; and (C) recommending the repeal of technologies from the category of prohibited technology to the extent that the technologies no longer pose an acute threat to the national security of the United States if developed or acquired by a country of concern; (3) lists all notifications submitted under section 802 during the year preceding submission of the report and includes, with respect to each such notification— (A) basic information on each party to the covered national security transaction with respect to which the notification was submitted; and (B) the nature of the covered national security transaction that was the subject to the notification, including the elements of the covered national security transaction that necessitated a notification; (4) includes a summary of those notifications, disaggregated by prohibited technology, notifiable technology, by covered national security transaction, and by country of concern; (5) provides additional context and information regarding trends in the prohibited technology, notifiable technology, the types of covered national security transaction, and the countries involved in those notifications; and (6) assesses the overall impact of those notifications, including recommendations for— (A) expanding existing Federal programs to support the production or supply of prohibited technologies or notifiable technologies in the United States, including the potential of existing authorities to address any related national security concerns; (B) investments needed to enhance prohibited technologies or notifiable technologies and reduce dependence on countries of concern regarding those technologies; and (C) the continuation, expansion, or modification of the implementation and administration of this title, including recommendations with respect to whether the definition of the term ‘country of concern’ under section 807(2) should be amended to add or remove countries. (b) Consideration of certain information In preparing the report pursuant to subsection (a), the Secretary— (1) shall consider information provided jointly by the chairperson and ranking member of any of the appropriate congressional committees; (2) may consider credible information obtained by other countries and nongovernmental organizations that monitor the military, surveillance, intelligence, or technology capabilities of a country of concern; and (3) may consider any other information that the Secretary deems relevant. (c) Form of report Each report required by this section shall be submitted in unclassified form, but may include a classified annex. (d) Testimony required Not later than one year after the date of the enactment of this title, and annually thereafter for five years, the Secretary and the Secretary of Commerce shall each provide to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives testimony with respect to the national security threats relating to investments by United States persons in countries of concern and broader international capital flows. (e) Requests by appropriate congressional committees (1) In general After receiving a request that meets the requirements of paragraph (2) with respect to whether a technology should be included in the amendments as described in subsection (a)(2), the Secretary shall, in preparing the report pursuant to subsection (a)— (A) determine if that technology may pose an acute threat to the national security of the United States if developed or acquired by a country of concern; and (B) include in the report pursuant to subsection (a) an explanation with respect to that determination that includes— (i) a statement of whether or not the technology, as determined by the Secretary, may pose an acute threat to the national security of the United States if developed or acquired by a country of concern; and (ii) if the Secretary determines that— (I) the technology may pose an acute threat to the national security of the United States if developed or acquired by a country of concern, an explanation for such determination and a recommendation whether that technology should be named a prohibited technology or a notifiable technology; and (II) the technology would not pose an acute threat to the national security of the United States if developed or acquired by a country of concern, an explanation for such determination. (2) Requirements A request under paragraph (1) with respect to whether a technology may pose an acute threat to the national security of the United States if developed or acquired by a country of concern shall be submitted to the Secretary in writing jointly by the chairperson and ranking member of one or more of the appropriate congressional committees. 804. Multilateral engagement and coordination (a) Authorities The Secretary, in coordination with the Secretary of State, the Secretary of Commerce, and the heads of other relevant Federal agencies, should— (1) conduct bilateral and multilateral engagement with the governments of countries that are allies and partners of the United States to promote and increase coordination of protocols and procedures to facilitate the effective implementation of and appropriate compliance with the prohibitions pursuant to this title; (2) upon adoption of protocols and procedures described in paragraph (1), work with those governments to establish mechanisms for sharing information, including trends, with respect to such activities; and (3) work with and encourage the governments of countries that are allies and partners of the United States to develop similar mechanisms of their own, for the exclusive purpose of preventing the development or acquisition of prohibited technologies by a country of concern. (b) Strategy for multilateral engagement and coordination Not later than 180 days after the date of the enactment of this title, the Secretary, in consultation with the Secretary of State, the Secretary of Commerce, and the heads of other relevant Federal agencies, should— (1) develop a strategy to work with the governments of countries that are allies and partners of the United States to develop mechanisms that are comparable to the prohibitions pursuant to this title, for the exclusive purpose of preventing the development and acquisition of prohibited technologies by a country of concern; and (2) assess opportunities to provide technical assistance to those countries with respect to the development of those mechanisms. (c) Report Not later than one year after the date of the enactment of this title, and annually thereafter for four years, the Secretary shall submit to the appropriate congressional committees a report that includes— (1) a discussion of any strategy developed pursuant to subsection (b)(1), including key tools and objectives for the development of comparable mechanisms by the governments of allies and partners of the United States; (2) a list of partner and allied countries to target for cooperation in developing their own prohibitions; (3) the status of the strategy’s implementation and outcomes; and (4) a description of impediments to the establishment of comparable mechanisms by governments of allies and partners of the United States. (d) Appropriate congressional committees defined In this section, the term appropriate congressional committees means— (1) the Committee on Foreign Relations and the Committee on Banking, Housing, and Urban Affairs of the Senate; and (2) the Committee on Foreign Affairs and the Committee on Financial Services of the House of Representatives. 805. Public database of covered foreign persons (a) In general The Secretary, in consultation with the Secretary of Commerce, may establish a publicly accessible, non-exhaustive database that identifies covered foreign persons in a prohibited technology pursuant to this title. (b) Confidentiality of evidence The Secretary shall establish a mechanism for the public, including Congress, stakeholders, investors, and nongovernmental organizations, to submit evidence on a confidential basis regarding whether a foreign person is a covered foreign person in a prohibited technology and should be included in the database described in subsection (a), if any. (c) Exemption from disclosure (1) In general Except as provided in paragraph (2), any information or documentary material filed with the Secretary pursuant to this section shall be exempt from disclosure under section 552(b)(3) of title 5, United States Code, and no such information or documentary material may be made public (other than the identity of a covered foreign person in accordance with subsection (b)). (2) Exceptions Paragraph (1) shall not prohibit the disclosure of the following: (A) Information relevant to any administrative or judicial action or proceeding. (B) Information to Congress or any duly authorized committee or subcommittee of Congress. (C) Information important to the national security analysis or actions of the Secretary to any domestic governmental entity, or to any foreign governmental entity of a United States ally or partner, under the exclusive direction and authorization of the Secretary, only to the extent necessary for national security purposes, and subject to appropriate confidentiality and classification requirements. (D) Information that the parties have consented to be disclosed to third parties. (d) Rule of construction The database described in subsection (a), if any, shall not be considered to be an exhaustive or comprehensive list of covered foreign persons for the purposes of this title. 806. Rule of construction Nothing in this title may be construed to negate the authority of the President under any authority, process, regulation, investigation, enforcement measure, or review provided by or established under any other provision of Federal law, or any other authority of the President or the Congress under the Constitution of the United States. 807. Definitions In this title: (1) Appropriate congressional committees Except as provided by section 804(d), the term appropriate congressional committees means— (A) the Committee on Financial Services, the Committee on Foreign Affairs, the Committee on Energy and Commerce, and the Committee on Appropriations of the House of Representatives; and (B) the Committee on Banking, Housing, and Urban Affairs and the Committee on Appropriations of the Senate. (2) Country of concern The term country of concern — (A) means the People’s Republic of China; and (B) includes the Hong Kong Special Administrative Region and the Macau Special Administrative Region. (3) Covered foreign person Subject to regulations prescribed in accordance with this title, the term covered foreign person means a foreign person that— (A) is incorporated in, has a principal place of business in, or is organized under the laws of a country of concern; (B) is a member of the Central Committee of the Chinese Communist Party; (C) is subject to the direction or control of a country of concern, an entity described in subparagraph (A) or (B), or the state or the government of a country of concern (including any political subdivision, agency, or instrumentality thereof); or (D) is owned in the aggregate, directly or indirectly, 50 percent or more by a country of concern, an entity described in subparagraph (A) or (B), or the state or the government of a country of concern (including any political subdivision, agency, or instrumentality thereof). (4) Covered national security transaction (A) In general Subject to such regulations as may be issued in accordance with this title, the term covered national security transaction means any activity engaged in by a United States person that involves— (i) the acquisition of an equity interest or contingent equity interest in a covered foreign person; (ii) the provision of a loan or similar debt financing arrangement to a covered foreign person, where such debt financing— (I) is convertible to an equity interest; or (II) affords or will afford the United States person the right to make management decisions with respect to or on behalf of a covered foreign person or the right to appoint members of the board of directors (or equivalent) of the covered foreign person; (iii) the entrance by such United States person into a joint venture with a covered foreign person; (iv) the conversion of a contingent equity interest (or interest equivalent to a contingent equity interest) or conversion of debt to an equity interest in a covered foreign person; (v) the acquisition, leasing, or other development of operations, land, property, or other assets in a country of concern that will result in, or that the United States person intends to result in— (I) the establishment of a covered foreign person; or (II) the engagement of a person of a country of concern in a prohibited technology where it was not previously engaged in such prohibited technology; (vi) knowingly directing transactions by foreign persons that the United States person has knowledge at the time of the transaction would constitute an activity described in clause (i), (ii), (iii), (iv), or (v), if engaged in by a United States person; or (vii) the acquisition of a limited partner or equivalent interest in a venture capital fund, private equity fund, fund of funds, or other pooled investment fund that the United States person has knowledge at the time of the acquisition, intends to engage in an activity described in clause (i), (ii), (iii), (iv), (v), or (vi). (B) Exceptions Subject to notice and comment regulations prescribed in consultation with Congress and in accordance with this title, the term covered national security transaction does not include— (i) any transaction the value of which the Secretary determines is de minimis; (ii) any category of transactions that the Secretary determines is in the national interest of the United States; (iii) an investment— (I) in a security (as defined in section 3(a) of the Securities Exchange Act of 1934( 15 U.S.C. 78c(a) )) that is traded on an exchange or the over-the-counter market in any jurisdiction; (II) in a security issued by an investment company (as defined in section 3 of the Investment Company Act of 1940( 15 U.S.C. 80a–3 )) that is registered with the Securities and Exchange Commission; (III) made as a limited partner or equivalent in a venture capital fund, private equity fund, fund of funds, or other pooled investment fund (other than as described in subclause (II)) where— (aa) the limited partner or equivalent’s committed capital is not more than $2,000,000, aggregated across any investment and co-investment vehicles of the fund; or (bb) the limited partner or equivalent has secured a binding contractual assurance that its capital in the fund will not be used to engage in a transaction that would be a covered national security transaction if engaged in by a United States person; or (IV) in a derivative of a security described under subclause (I), (II), or (III); (iv) any ancillary transaction undertaken by a financial institution (as defined in section 5312 of title 31, United States Code); (v) the acquisition by a United States person of the equity or other interest owned or held by a covered foreign person in an entity or assets located outside of a country of concern in which the United States person is acquiring the totality of the interest in the entity held by the covered foreign person; (vi) an intracompany transfer of funds, as defined in regulations prescribed in accordance with this title, from a United States parent company to a subsidiary located in a country of concern or a transaction that, but for this clause, would be a covered national security transaction between a United States person and its controlled foreign person that supports operations that are not covered national security transactions or that maintains covered national security transactions that the controlled foreign person was engaged in prior to January 2, 2025; (vii) a transaction secondary to a covered national security transaction, including— (I) contractual arrangements or the procurement of material inputs for any covered national security transaction (such as raw materials); (II) bank lending; (III) the processing, clearing, or sending of payments by a bank; (IV) underwriting services; (V) debt rating services; (VI) prime brokerage; (VII) global custody; (VIII) equity research or analysis; or (IX) other similar services; (viii) any ordinary or administrative business transaction as may be defined in such regulations; or (ix) any transaction completed before the date of the enactment of this title. (C) Ancillary transaction defined In this paragraph, the term ancillary transaction means— (i) the processing, settling, clearing, or sending of payments and cash transactions; (ii) underwriting services; (iii) credit rating services; and (iv) other services ordinarily incident to and part of the provision of financial services, such as opening deposit accounts, direct custody services, foreign exchange services, remittances services, and safe deposit services. (5) Foreign person The term foreign person means a person that is not a United States person. (6) Notifiable technology (A) In general The term notifiable technology means a technology with respect to which a covered foreign person— (i) designs any advanced integrated circuit that is not covered under paragraph (8)(A)(iii); (ii) fabricates any integrated circuit that is not covered under paragraph (8)(A)(iv); (iii) packages any integrated circuit that is not covered under paragraph (8)(A)(v); or (iv) develops any artificial intelligence system that is not covered under clause (vii), (viii), (ix), or (xvi) of paragraph (8)(A), and that is— (I) designed to be used for— (aa) any military end use (such as for weapons targeting, target identification, combat simulation, military vehicle or weapons control, military decision-making, weapons design (including chemical, biological, radiological, or nuclear weapons), or combat system logistics and maintenance); or (bb) any government intelligence or mass-surveillance end use (such as through incorporation of features such as mining text, audio, or video, image recognition, location tracking, or surreptitious listening devices); (II) intended by the covered foreign person or joint venture to be used for— (aa) cybersecurity applications; (bb) digital forensics tools; (cc) penetration testing tools; or (dd) control of robotic systems; or (III) trained using a quantity of computing power greater than 10 23 computational operations (such as integer or floating-point operations). (B) Updates The Secretary, in consultation with Congress, may prescribe regulations in accordance with this title to refine the technical parameters of technologies described in subparagraph (A) as reasonably needed for national security purposes or to add or remove categories to or from the list in subparagraph (A). (7) Party The term ‘party’, with respect to a covered national security transaction, has the meaning given that term in regulations prescribed in accordance with this title. (8) Prohibited technology (A) In general The term prohibited technology means a technology with respect to which a covered foreign person— (i) develops or produces any design automation software for the design of integrated circuits or advanced packaging; (ii) develops or produces any— (I) electronic design automation software for the design of integrated circuits or advanced packaging; (II) front-end semiconductor fabrication equipment designed for the volume fabrication of integrated circuits, including equipment used in the production stages from a blank wafer or substrate to a completed wafer or substrate; or (III) equipment for performing volume advanced packaging; (iii) designs any integrated circuit designs that meet or exceed the specifications set in Export Control Classification Number (ECCN) 3A090 in Supplement No. 1 to the Export Administration Regulations, or integrated circuits designed for operation at or below 4.5 Kelvin; (iv) fabricates integrated circuits that are— (I) logic integrated circuits using a non-planar transistor architecture or with a technology node of 16/14 nanometers or less, including fully depleted silicon-on-insulator (FDSOI) integrated circuits; (II) NOT–AND (NAND) memory integrated circuits with 128 layers or more; (III) dynamic random-access memory (DRAM) integrated circuits using a technology node of 18 nanometer half-pitch or less; (IV) integrated circuits manufactured from a gallium-based compound semiconductor; (V) integrated circuits using graphene transistors or carbon nanotubes; or (VI) integrated circuits designed for operation at or below 4.5 Kelvin; (v) packages any integrated circuit using advanced packaging techniques; (vi) develops, designs, or produces any commodity, material, software, or technology designed exclusively for use in or with extreme ultraviolet lithography fabrication equipment; (vii) develops, designs, or produces any artificial intelligence models trained with at least 10 25 floating point operations; (viii) develops, designs, or produces any artificial intelligence models that rely upon or utilize advanced integrated circuits that meet or exceed the specifications set in Export Control Classification Number (ECCN) 3A090 in Supplement No. 1 to the Export Administration Regulations; (ix) develops, designs, or produces any artificial intelligence models designed for use by the Government of the People’s Republic of China, its special administrative regions, or its agencies and instrumentalities; (x) develops a quantum computer or produces any critical components required to produce a quantum computer such as a dilution refrigerator or two-stage pulse tube cryocooler; (xi) develops or produces any quantum sensing platform designed for, or which the relevant covered foreign person intends to be used for, any military, government intelligence, or mass-surveillance end use; (xii) develops or produces quantum networks or quantum communication systems designed for or intended to be used for— (I) networking to scale up the capabilities of quantum computers, such as for the purposes of breaking or compromising encryption; (II) secure communications, such as quantum key distribution; or (III) any other application that has any military, government intelligence, or mass-surveillance end use; (xiii) develops, designs, or produces materials, components, avionics, flight control, propulsion, Global Positioning System (GPS), data relay, and target detection systems designed for use in hypersonic systems or capable of sustainable operations above 1,000 degrees Celsius; (xiv) develops, installs, sells, or produces any supercomputer enabled by advanced integrated circuits that can provide theoretical compute capacity of 100 or more double-precision (64-bit) petaflops or 200 or more single-precision (32-bit) petaflops of processing power within a 41,600 cubic foot or smaller envelope; (xv) develops, designs, or produces any other technologies in the advanced semiconductors and microelectronics sector, the artificial intelligence sector, the high-performance computing and supercomputing sector, the hypersonic missiles sector, or the quantum information science and technology sector that are— (I) defense articles or defense services included on the United States Munitions List set forth in the International Traffic in Arms Regulations under subchapter M of chapter I of title 22, Code of Federal Regulations; (II) specially designed and prepared nuclear equipment, parts or components, materials, software, or technologies covered by part 810 of title 10, Code of Federal Regulations (relating to assistance to foreign atomic energy activities); (III) nuclear facilities, equipment, or materials covered by part 110 of title 10, Code of Federal Regulations (relating to export and import of nuclear equipment and material); or (IV) emerging or foundational technologies controlled pursuant to section 1758 of the Export Control Reform Act of 2018 ( 50 U.S.C. 4817 ); or (xvi) develops any artificial intelligence system that is designed to be exclusively used for, or which the relevant covered foreign person intends to be used for, any— (I) military end use (such as for weapons targeting, target identification, combat simulation, military vehicle or weapon control, military decision-making, weapons design (including chemical, biological, radiological, or nuclear weapons), or combat system logistics and maintenance); or (II) government intelligence or mass-surveillance end (such as through incorporation of features such as mining text, audio, or video, image recognition, location tracking, or surreptitious listening devices). (B) Updates The Secretary, in consultation with Congress, may prescribe regulations in accordance with this title to make updates to the technical parameters of technologies described in subparagraph (A) as reasonably needed for national security purposes. (9) Secretary Except as otherwise provided, the term Secretary means the Secretary of the Treasury. (10) United States person The term United States person means— (A) any United States citizen or an alien lawfully admitted for permanent residence to the United States; (B) an entity organized under the laws of the United States or of any jurisdiction within the United States (including any foreign branch of such an entity); or (C) any person in the United States. .