Source: https://www.betterdistricts.org/bill/115-hr-5841
Timestamp: 2019-04-20 02:30:28
Document Index: 288041216

Matched Legal Cases: ['art 740', 'arts 120', 'art 774', 'arts 730', 'art 810', 'art 110', 'art 331', 'art 121', 'art 73', 'art 774', 'art 774', 'art 742', 'art 740', 'art 740', 'art 774', 'art 774']

BetterDistricts - H.R. 5841 - Foreign Investment Risk Review Modernization Act of 2018
H.R. 5841 - Foreign Investment Risk Review Modernization Act of 2018
Bill Status: Received in the Senate. Read twice. Placed on Senate Legislative Calendar under General Orders. Calendar No. 492.
(a) Short title.—This Act may be cited as the “Foreign Investment Risk Review Modernization Act of 2018”.
Sec. 311. Additional regulations.
Sec. 402. Report on transactions with censorship implications.
Sec. 403. Notice to Congress by the Committee.
Sec. 503. Funding.
Sec. 603. Cooperation with United States allies and partners.
Sec. 816. Licensing.
Sec. 817. Compliance assistance.
Sec. 818. Requirements to identify and control emerging, foundational, and other critical technologies in export control regulations.
Sec. 819. Review relating to countries subject to comprehensive United States arms embargo.
Sec. 820. Penalties.
Sec. 821. Enforcement.
Sec. 822. Administrative procedure.
Sec. 823. Review of interagency dispute resolution process.
Sec. 824. Coordination with other agencies on commodity classification and removal of export controls.
Sec. 825. Annual report to Congress.
Sec. 826. Repeal.
Sec. 827. Effect on other Acts.
Sec. 828. Transition provisions.
SEC. 101. Findings and sense of Congress.
(1) According to a February 2016 report by the Department of Commerce’s International Trade Administration, 12 million United States workers, equivalent to 8.5 percent of the labor force, have jobs resulting from foreign investment, including 3.5 million jobs in the manufacturing sector alone.
(2) In 2016, new foreign direct investment in U.S. manufacturing totaled $129.4 billion.
(3) The Department of Commerce’s Bureau of Economic Analysis concluded that in 2015, foreign-owned affiliates in the United States—
(A) Contributed $894.5 billion in value added to the U.S. economy;
(B) exported goods valued at $352.8 billion, accounting for nearly a quarter of total U.S. goods exports;
(C) undertook $56.7 billion in research and development; and
(D) the seven largest investing countries, all of which are United States allies – the United Kingdom, Japan, Germany, France, Canada, Switzerland, and the Netherlands – accounted for 72.1 percent of U.S. affiliate value added and over 80 percent of affiliates’ R&D expenditures.
(4) According to the Government Accountability Office (GAO), from 2011 to 2016, the number of transactions reviewed by the Committee on Foreign Investment in the United States (CFIUS) grew by 55 percent, while agency staff assigned to the reviews increased by 11 percent.
(5) According to a February 2018 report (GAO-18-249), GAO noted: “Officials from Treasury and other member agencies are aware of pressures on their CFIUS staff given the current workload and have expressed concerns about possible workload increases.”. GAO concluded: “Without attaining an understanding of the staffing levels needed to address the current and future CFIUS workload, particularly if legislative changes to CFIUS’s authorities further expand its workload, CFIUS may be limited in its ability to fulfill its objectives and address threats to the national security of the United States.”.
(6) On March 30, 1954, Dwight David Eisenhower – five-star general, Supreme Allied Commander, and 34th President of the United States – in his “Special Message to the Congress on Foreign Economic Policy”, counseled: “Great mutual advantages to buyer and seller, to producer and consumer, to investor and to the community where investment is made, accrue from high levels of trade and investment.”. He continued: “The internal strength of the American economy has evolved from such a system of mutual advantage. In the press of other problems and in the haste to meet emergencies, this nation – and many other nations of the free world – have all too often lost sight of this central fact.”. President Eisenhower concluded: “If we fail in our trade policy, we may fail in all. Our domestic employment, our standard of living, our security, and the solidarity of the free world – all are involved.”.
(1) foreign investment provides substantial benefits to the United States, including the promotion of economic growth, productivity, innovation, competitiveness, and job creation, thereby enhancing U.S. national security;
(2) maintaining the commitment of the United States to an open investment policy encourages other countries to act similarly and helps expand foreign markets for U.S. businesses;
(3) at the same time, national security risks related to foreign investment, particularly those emanating from countries such as China and Russia, warrant an appropriate modernization of the processes and authorities of the Committee on Foreign Investment in the United States;
(4) the Committee on Foreign Investment in the United States, as a complement to domestic and multilateral export control regimes, plays a critical role in protecting the national security of the United States;
(5) in order to maintain the Committee’s effectiveness and guard against mission creep, CFIUS should remain narrowly focused on confronting risks related to national security;
(6) it is essential that the member agencies of the Committee are adequately resourced and able to hire appropriately qualified individuals in a timely manner so that CFIUS may promptly complete transaction reviews, identify and respond to evolving national security risks, and enforce mitigation agreements effectively;
(7) the President should carry out international outreach to promote the benefits of foreign investment for global economic growth, while also assisting United States partners to address national security risks; and
(8) it is the policy of the United States to enthusiastically welcome and support foreign investment, consistent with national security considerations.
(1) by striking paragraphs (2), (3), and (4) and inserting the following:
“(2) CONTROL.—The term ‘control’ means the power, direct or indirect, whether or not exercised, to determine, direct, or decide important matters affecting an entity, subject to regulations prescribed by the Committee.
“(3) COVERED TRANSACTION.—
“(A) IN GENERAL.—The term ‘covered transaction’ means any transaction described in subparagraph (B) or (C) that is proposed, pending, or completed on or after the date of the enactment of the Foreign Investment Risk Review Modernization Act of 2018.
“(i) Any merger, acquisition, takeover, or joint venture that is proposed or pending after August 23, 1988, by or with any foreign person that could result in foreign control of any United States business.
“(ii) The purchase or lease by, or concession to, a foreign person of private or public real estate that—
“(I) is located in the United States and—
“(aa) is, or is in close proximity to, a United States military installation or another facility or property of the United States Government that is sensitive for reasons relating to national security and—
“(AA) could reasonably provide the foreign person the ability to collect intelligence on activities being conducted at such an installation, facility, or property; or
“(BB) could otherwise expose national security activities at such an installation, facility, or property to the risk of foreign surveillance; or
“(bb) is itself, or is located at and could function as part of, an air or sea port;
“(II) is not a single housing unit, as defined by the Bureau of the Census;
“(III) is not in an urbanized area, as set forth by the Bureau of the Census in its most recent census, except as otherwise prescribed by the Committee in regulations in consultation with the Secretary of Defense; and
“(IV) meets such other criteria as the Committee prescribes by regulation, except that such criteria may not expand the categories of real estate to which this clause applies beyond the categories described in this clause.
“(iii) Any change in the rights that a foreign person has with respect to a United States business in which the foreign person has an investment, if that change could result in—
“(II) an investment described in subparagraph (C).
“(iv) Any transaction or other device entered into or employed for the purpose of evading this section, subject to regulations prescribed by the Committee.
“(C) SENSITIVE TRANSACTIONS INVOLVING COUNTRIES OF SPECIAL CONCERN.—
“(i) IN GENERAL.—A transaction described in this subparagraph is any investment in an unaffiliated United States business by a foreign person that—
“(aa) a national or a government of, or a foreign entity organized under the laws of, a country of special concern; or
“(bb) a foreign entity—
“(AA) over which control is exercised or exercisable by a national or a government of, or by a foreign entity organized under the laws of, a country of special concern; or
“(BB) in which the government of a country of special concern has a substantial interest; and
“(II) as a result of the transaction, could obtain–—
“(aa) sensitive personal data, as defined by regulations prescribed by the Committee, of United States citizens, if such data may be exploited in a manner that threatens national security;
“(bb) involvement, other than through voting of shares, in substantive decisionmaking of the United States business regarding—
“(AA) the use, development, acquisition, or release of sensitive personal data of United States citizens (as described in item (aa));
“(BB) the use, development, acquisition, or release of critical technologies; or
“(CC) the management or operations of United States critical infrastructure, as specified in regulations prescribed by the Committee; or
“(cc) material nonpublic technical information in the possession of the United States business.
“(ii) COUNTRY OF SPECIAL CONCERN.—For the purposes of this subparagraph, the term ‘country of special concern’ means—
“(I) any foreign country that is subject to export restrictions pursuant to section 744.21 of title 15, Code of Federal Regulations;
“(II) any country determined by the Secretary of State to be a state sponsor of terrorism; and
“(III) any country that—
“(aa) is subject to a United States arms embargo, as specified in list D:5 of Country Group D in Supplement No. 1 to part 740 of title 15, Code of Federal Regulations; and
“(bb) is specified in regulations prescribed by the Committee.
“(iii) INVESTMENT DEFINED.—For the purposes of this subparagraph, the term ‘investment’ means the acquisition of an equity interest, including contingent equity interest, as further defined in regulations prescribed by the Committee.
“(iv) MATERIAL NONPUBLIC TECHNICAL INFORMATION DEFINED.—
“(I) IN GENERAL.—For the purposes of this subparagraph, and subject to regulations prescribed by the Committee, the term ‘material nonpublic technical information’ means information that—
“(aa) could create or reveal significant vulnerabilities in United States critical infrastructure, as specified in regulations prescribed by the Committee; or
“(bb) could be essential to design, develop, test, produce, or manufacture critical technologies, as specified in regulations prescribed by the Committee.
“(II) EXEMPTION FOR FINANCIAL INFORMATION.—Notwithstanding subclause (I), for the purposes of this subparagraph, the term ‘material nonpublic technical information’ does not include financial information regarding the performance of a United States business.
“(v) REGULATIONS WITH RESPECT TO CRITICAL INFRASTRUCTURE.—For purposes of this subparagraph, regulations prescribed by the Committee regarding United States critical infrastructure shall include criteria to limit application to critical infrastructure that is likely to be of importance to the national security of the United States.
“(vi) UNAFFILIATED UNITED STATES BUSINESS DEFINED.—For the purposes of this subparagraph, with respect to an investment described under clause (i), and as further defined in regulations prescribed by the Committee, the term ‘unaffiliated United States business’ means a United States business that is not subject to the same ultimate ownership of the foreign person undertaking the investment.
“(vii) EXEMPTION.—The President may exempt a country from the definition of a country of special concern under clause (ii), for up to one year at a time, upon reporting to the Committees on Financial Services and Foreign Affairs of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs and Foreign Relations of the Senate that the exemption is important to the national interest of the United States, with a detailed explanation of the reasons therefor.
“(D) EXCEPTION FOR AIR CARRIERS.—Subparagraph (B)(iii) shall not apply to a change in the rights of a person with respect to an investment involving an air carrier, as defined in section 40102(a)(2) of title 49, United States Code, that holds a certificate issued under section 41102 of that title.
“(E) TRANSFERS OF CERTAIN ASSETS PURSUANT TO BANKRUPTCY PROCEEDINGS OR OTHER DEFAULTS.—The Committee shall prescribe regulations to clarify that the term ‘covered transaction’ includes any transaction described in subparagraph (B) or (C) that arises pursuant to a bankruptcy proceeding or other form of default on debt.
“(F) DEFINITION OF CLOSE PROXIMITY.—In prescribing regulations with respect to subparagraph (B)(ii)(I)(aa), the Committee shall ensure that the term ‘close proximity’ only applies to a distance or distances within which the purchase, lease, or concession of real estate could pose a national security risk in connection with a United States military installation or another facility or property of the United States Government.
“(4) FOREIGN GOVERNMENT-CONTROLLED TRANSACTION.—The term ‘foreign government-controlled transaction’ means any covered transaction that could result in control of a United States business by—
“(A) a foreign government;
“(B) a person controlled by or acting on behalf of a foreign government; or
“(C) a foreign company or entity of a country of special concern (as defined under paragraph (3)(C)(ii)) domiciled or having its principal place of business in a county of special concern that is a non-market economy, except to the extent the Committee promulgates regulations exempting any such company, entity, or country from this presumption.”;
“(7) CRITICAL TECHNOLOGIES.—The term ‘critical technologies’ means—
“(A) defense articles or defense services covered by the United States Munitions List (USML), which is set forth in the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120–130);
“(B) those items specified on the Commerce Control List (CCL) set forth in Supplement No. 1 to part 774 of the Export Administration Regulations (EAR) (15 CFR parts 730–774) that are controlled pursuant to multilateral regimes (i.e. for reasons of national security, chemical and biological weapons proliferation, nuclear nonproliferation, or missile technology), as well as those that are controlled for reasons of regional stability or surreptitious listening;
“(C) specially designed and prepared nuclear equipment, parts and components, materials, software, and technology specified in the Assistance to Foreign Atomic Energy Activities regulations (10 CFR part 810), and nuclear facilities, equipment, and material specified in the Export and Import of Nuclear Equipment and Material regulations (10 CFR part 110);
“(D) select agents and toxins specified in the Select Agents and Toxins regulations (7 CFR part 331, 9 CFR part 121, and 42 CFR part 73); and
“(E) emerging, foundational, or other critical technologies that are controlled pursuant to section 818 of the Foreign Investment Risk Review Modernization Act of 2018.”; and
“(9) FOREIGN PERSON.—The term ‘foreign person’ means—
“(A) any foreign national, foreign government, or foreign entity; or
“(B) any entity over which control is exercised or exercisable by a foreign national, foreign government, or foreign entity.
“(10) SUBSTANTIAL INTEREST.—The term ‘substantial interest’ has the meaning given to such term in regulations prescribed by the Committee, but does not include a voting interest of less than ten percent or ownership interests held or acquired solely for the purpose of passive investment.
“(11) UNITED STATES BUSINESS.—The term ‘United States business’ means any entity, irrespective of the nationality of the persons that control it, engaged in interstate commerce in the United States, but only to the extent of its activities in interstate commerce.”.
SEC. 301. Inclusion of partnership and side agreements in notice.
“(iv) INCLUSION OF PARTNERSHIP AND SIDE AGREEMENTS.—Subject to regulations prescribed by the Committee, the Committee may require a written notice submitted under clause (i) by a party to a covered transaction to include a copy of any partnership agreements, integration agreements, or other side agreements relating to the transaction.”.
SEC. 302. Declarations relating to certain covered transactions.
(a) In general.—Section 721(b)(1)(C) of the Defense Production Act of 1950 (50 U.S.C. 4565(b)(1)(C)), as amended by section 301, is further amended by adding at the end the following:
“(v) DECLARATIONS WITH RESPECT TO CERTAIN COVERED TRANSACTIONS.—
“(I) VOLUNTARY DECLARATIONS.—For the purpose of expediting the review of certain covered transactions that the Committee determines are likely to pose limited risk, the Committee may prescribe regulations to permit parties to the transaction to submit a declaration with basic information regarding the transaction, unless the parties submit a written notice under clause (i).
“(aa) IN GENERAL.—The Committee shall prescribe regulations to require the parties to a covered transaction to submit a declaration described in subclause (I) with respect to the transaction if the transaction involves an investment that results in the release of critical technologies by an unaffiliated United States business (as defined under subsection (a)(3)(C)(vi)) to a foreign person in which a foreign government has, directly or indirectly, a substantial interest.
“(bb) SUBMISSION OF WRITTEN NOTICE AS AN ALTERNATIVE.—Parties to a covered transaction for which a declaration is required under this clause may instead elect to submit a written notice under clause (i).
“(cc) TIMING OF SUBMISSION.—With respect to the regulations described under subclause (I), the Committee may not require a declaration to be submitted more than 45 days in advance of the completion of the transaction.
“(III) PENALTIES.—The Committee may impose a penalty pursuant to subsection (h)(3)(A) with respect to a party that fails to comply with this clause.
“(AA) request that the parties to the transaction file a written notice under clause (i), provided that the Committee includes an explanation of the reasons for the request;
“(bb) TIMING.—The Committee shall take action under item (aa) within 30 days of receiving a declaration under this clause.
“(cc) REFILING OF DECLARATION.—The Committee may not request or recommend that a declaration be withdrawn and refiled, except to permit parties to a transaction to correct material errors or omissions.
“(V) REGULATIONS.—In prescribing regulations establishing requirements for declarations submitted under this clause, the Committee shall ensure that such declarations are submitted as abbreviated notifications that do not generally exceed 5 pages in length.
“(VI) INVESTMENT DEFINED.—For the purposes of this clause, the term ‘investment’ means the acquisition of an equity interest, including contingent equity interest, as further defined in regulations prescribed by the Committee.”.
(b) Stipulations regarding transactions.—Section 721(b)(1)(C) of the Defense Production Act of 1950 (50 U.S.C. 4565(b)(1)(C)), as amended by this section, is further amended by adding at the end the following:
SEC. 303. Timing for reviews and investigations.
(1) in paragraph (1)(E), by striking “30-day” and inserting “45-day”;
“(I) IN GENERAL.—In extraordinary circumstances (as defined by the Committee in regulations), the chairperson may, at the request of the head of the lead agency, extend an investigation under subparagraph (A) for not more than one 15-day period.
SEC. 304. Submission of certifications to Congress.
(1) in clause (i), by amending subclause (II) to read as follows:
“(II) a certification that all relevant national security factors, including factors enumerated in subsection (f), have received full consideration.”; and
SEC. 305. Analysis by Director of National Intelligence.
“(iv) INDEPENDENCE AND OBJECTIVITY.—The Committee shall ensure that its processes under this section preserve the ability of the Director to conduct an analysis under clause (i) that is independent, objective, and consistent with all applicable directives, policies, and analytic tradecraft standards of the intelligence community.”.
“(I) the transaction is described in subsection (a)(3)(B)(ii);
(4) in subparagraph (C), as so redesignated, by striking “20 days” and inserting “30 days”; and
“(G) SUBMISSION TO CONGRESS.—The Committee shall include the analysis required by subparagraph (A) with respect to a covered transaction in the report required under subsection (m)(1), subject to the requirements of subsection (m)(5).”.
SEC. 306. Information sharing.
“(1) IN GENERAL.—Any information”; and
“(2) EXCEPTION.—Paragraph (1) shall not prohibit the disclosure of information or documentary material that the party filing such information or material consented to be disclosed to third parties.”.
SEC. 307. Action by the President.
(a) In general.—Section 721(d)(2) of the Defense Production Act of 1950 (50 U.S.C. 4565(d)(2)) is amended by striking “not later than 15 days” and all that follows and inserting the following: “with respect to a covered transaction not later than 15 days after the earlier of—
“(B) the date on which the Committee otherwise refers the transaction to the President under subsection (l)(4).”.
SEC. 308. Factors to be considered.
(1) in paragraph (3), by striking the comma at the end and inserting the following: “, including the availability of human resources, products, technology, materials, and other supplies and services;”;
(4) by redesignating paragraphs (6), (7), (8), (9), (10), and (11) as paragraphs (5), (6), (7), (8), (9), and (16), respectively;
(5) in paragraph (9), as so redesignated, by striking “and” at the end;
(6) by inserting after paragraph (9), as so redesignated, the following:
“(10) the degree to which the covered transaction is likely to threaten the ability of the United States Government to acquire or maintain the equipment and systems that are necessary for defense, intelligence, or other national security functions;
“(11) the potential national security-related effects of the cumulative control of any one type of critical infrastructure, energy asset, material, or critical technology by a foreign person;
“(12) whether any foreign person that would acquire control of a United States business as a result of the covered transaction has a history of—
“(A) complying with United States laws and regulations and prior adherence, if applicable, to any agreement or condition, as described under (l)(1)(A); and
“(13) the extent to which the covered transaction is likely to release, either directly or indirectly, sensitive personal data of United States citizens to a foreign person that may exploit that information in a manner that threatens national security;
“(14) whether the covered transaction is likely to exacerbate cybersecurity vulnerabilities or is likely to result in a foreign government gaining a significant new capability to engage in malicious cyber-enabled activities against the United States, including such activities designed to affect the outcome of any election for Federal office;
“(15) whether the covered transaction is likely to expose any information regarding sensitive national security matters or sensitive procedures or operations of a Federal law enforcement agency with national security responsibilities to a foreign person not authorized to receive that information; and”; and
(7) by adding at the end the following flush-left text:
‘For purposes of this subsection, the phrase ‘the availability of human resources’ shall be construed to consider potential losses of such availability resulting from reductions in the employment of United States persons whose knowledge or skills are critical to national security, including the continued production in the United States of items that are likely to be acquired by the Department of Defense or other Federal departments or agencies for the advancement of the national security of the United States.’.
SEC. 309. Mitigation and other actions by the Committee to address national security risks.
(i) in the heading, by striking “In general” and inserting “Agreements and conditions”;
“(ii) ABANDONMENT OF TRANSACTIONS.—If a party to a covered transaction has voluntarily chosen to abandon the transaction, the Committee or lead agency, as the case may be, may negotiate, enter into or impose, and enforce any agreement or condition with any party to the covered transaction for purposes of effectuating such abandonment and mitigating any threat to the national security of the United States that arises as a result of the covered transaction.
“(iii) AGREEMENTS AND CONDITIONS RELATING TO COMPLETED TRANSACTIONS.—The Committee or lead agency, as the case may be, may negotiate, enter into or impose, and enforce any agreement or condition with any party to a completed covered transaction in order to mitigate any interim threat to the national security of the United States that may arise as a result of the covered transaction until such time that the Committee has completed action pursuant to subsection (b) or the President has taken action pursuant to subsection (d) with respect to the transaction.”;
“(B) TREATMENT OF OUTDATED AGREEMENTS OR CONDITIONS.—The chairperson and the head of any applicable lead agency shall periodically review the appropriateness of an agreement or condition described under subparagraph (A) and terminate, phase out, or otherwise amend any agreement or condition if a threat no longer requires mitigation through the agreement or condition.”; and
“(D) JURISDICTION.—The provisions of section 706(b) shall apply to any mitigation agreement entered into or condition imposed under subparagraph (A).”; and
“(4) REFERRAL TO PRESIDENT.—The Committee may, at any time during the review or investigation of a covered transaction under subsection (b), complete the action of the Committee with respect to the transaction and refer the transaction to the President for action pursuant to subsection (d).
“(5) RISK-BASED ANALYSIS REQUIRED.—
“(A) IN GENERAL.—Any determination of the Committee to refer a covered transaction to the President under paragraph (4), to suspend a covered transaction under paragraph (6), or to negotiate, enter into, impose, or enforce any agreement or condition under paragraph (1)(A) with respect to a covered transaction, shall be based on a risk-based analysis, conducted by the Committee, of the effects on the national security of the United States of the covered transaction, which shall include—
“(i) an assessment of the threat, vulnerabilities, and consequences to national security resulting from the transaction, as these terms are defined or clarified in guidance and regulations issued by the Committee; and
“(ii) an identification of each relevant factor described in subsection (f) that the transaction may substantially implicate.
“(B) COMPLIANCE PLANS.—
“(i) IN GENERAL.—In the case of a covered transaction with respect to which an agreement or condition is entered into under paragraph (1)(A), the Committee or lead agency, as the case may be, shall formulate, adhere to, and keep updated a plan for monitoring compliance with the agreement or condition.
“(ii) ELEMENTS.—Each plan required by clause (i) with respect to an agreement or condition entered into under paragraph (1)(A) shall include an explanation of—
“(I) which member of the Committee will have primary responsibility for monitoring compliance with the agreement or condition;
“(II) how compliance with the agreement or condition will be monitored;
“(IV) whether an independent entity will be utilized under subparagraph (D) to conduct compliance reviews; and
“(V) what actions will be taken if the parties fail to cooperate regarding monitoring compliance with the agreement or condition.
“(C) EFFECT OF LACK OF COMPLIANCE.—If, at any time after a mitigation agreement or condition is entered into or imposed under paragraph (1)(A), the Committee or lead agency, as the case may be, determines that a party or parties to the agreement or condition are not in compliance with the terms of the agreement or condition, the Committee or lead agency may, in addition to the authority of the Committee to impose penalties pursuant to subsection (h)(3)(A) and to unilaterally initiate a review of any covered transaction under subsection (b)(1)(D)(iii)(I)—
“(D) USE OF INDEPENDENT ENTITIES TO MONITOR COMPLIANCE.—If the parties to an agreement or condition entered into under paragraph (1)(A) enter into a contract with an independent entity from outside the United States Government for the purpose of monitoring compliance with the agreement or condition, the Committee shall take such action as is necessary to prevent any significant conflict of interest from arising with respect to the entity and the parties to the transaction.
“(E) SUCCESSORS AND ASSIGNS.—Any agreement or condition entered or imposed under paragraph (1)(A) shall be considered binding on all successors and assigns, unless and until the agreement or condition terminates on its own terms or is otherwise terminated by the Committee in the Committee’s sole discretion.
“(F) ADDITIONAL COMPLIANCE MEASURES.—Subject to subparagraphs (A) through (D), the Committee shall develop and agree upon methods for evaluating compliance with any agreement entered into or condition imposed with respect to a covered transaction that will allow the Committee to adequately ensure compliance without unnecessarily diverting Committee resources from assessing any new covered transaction for which a written notice under clause (i) of subsection (b)(1)(C) has been filed or for which a declaration has been submitted under clause (v) of subsection (b)(1)(C), and if necessary, reaching a mitigation agreement with or imposing a condition on a party to such covered transaction or any covered transaction for which a review has been reopened for any reason.
“(6) SUSPENSION OF TRANSACTIONS.—The Committee, acting through the chairperson, may suspend a proposed or pending covered transaction that may pose a risk to the national security of the United States for such time as the covered transaction is under review or investigation under subsection (b).”.
SEC. 310. Certification of notices and information.
SEC. 311. Additional regulations.
Section 721(h)(3) of the Defense Production Act of 1950 (50 U.S.C. 4565(h)(3)) is amended—
“(D) provide that in connection with any national security review or investigation of a covered transaction conducted by the Committee, the Committee should—
“(i) consider the factors described in paragraphs (2) and (3) of subsection (f); and
“(ii) as appropriate, require parties to provide the information necessary to consider such factors.”.
SEC. 401. Modification of annual report.
“(ii) the nature of the business activities or products of the United States business with which the transaction was entered into or intended to be entered into;
“(iii) information about any withdrawal from the process; and
“(iv) the mean and median number of days required to complete reviews and investigations during the period.”;
“(4) ADDITIONAL CONTENTS OF REPORT.—Each annual report required under paragraph (1) shall contain the following additional information:
“(A) Statistics on compliance reviews conducted and actions taken by the Committee under subsection (l)(6), including subparagraph (D) of that subsection (l)(6), during that period and a description of any actions taken by the Committee to impose penalties or initiate a unilateral review pursuant to subsection (b)(1)(D)(iii)(I).
“(B) Cumulative and trend information on the number of declarations filed under subsection (b)(1)(C)(v), the actions taken by the Committee in response to declarations, the business sectors involved in the declarations which have been made, the countries involved in such declarations, and the mean and median number of days required to respond to such declarations, as described in subsection (b)(1)(C)(v)(IV), during that period .
“(C) The number of new hires made since the preceding report through the authorities described under subsection (q), along with summary statistics, position titles, and associated pay grades for such hires and a summary of such hires’ responsibilities in administering this section.
“(C) EXCEPTIONS TO FREEDOM OF INFORMATION ACT.—The exceptions to subsection (a) of section 552 of title 5, United States Code, provided for under subsection (b) of that section shall apply with respect to the report required by paragraph (1).”.
SEC. 402. Report on transactions with censorship implications.
Not later than one year from the date of enactment of this Act, the Committee on Foreign Investment in the United States shall issue a report to the Congress, appropriate portions of which may be classified, on investments by foreign persons into the entertainment and information sectors of the United States, which shall include analysis of the extent to which such investments have resulted in or could result in direct or indirect censorship, including self-censorship, within the United States.
SEC. 403. Notice to Congress by the Committee.
Section 721 of the Defense Production Act of 1950 (50 U.S.C. 4565), as amended by section 503, is further amended by adding at the end the following:
“(v) Notice to Congress by the Committee.—If the Committee recommends that the President suspend or prohibit a covered transaction because such transaction threatens to impair the national security of the United States, the Committee shall, in the classified version of the annual report described under subsection (m), notify Congress of each such recommendation and, upon request, provide a classified briefing on the recommendation.”.
SEC. 501. Centralization of certain Committee functions.
“(o) Centralization of certain committee functions.—
“(2) RULE OF CONSTRUCTION.—Nothing in this subsection shall be construed as limiting the authority of any department or agency represented on the Committee to represent its own interests before the Committee.”.
SEC. 502. CFIUS resource needs.
(a) Unified budget request.—Section 721 of the Defense Production Act of 1950 (50 U.S.C. 4565), as amended by section 501, is further amended by adding at the end the following:
“(p) Unified budget request; annual spending plan.—
“(1) UNIFIED BUDGET REQUEST.—
“(A) IN GENERAL.—The President may include, in the budget of the Department of the Treasury for a fiscal year (as submitted to Congress with the budget of the President under section 1105(a) of title 31, United States Code), a unified request for funding of all operations under this section conducted by all of the departments and agencies represented on the Committee.
“(B) FORM OF BUDGET REQUEST.—A unified request under subparagraph (A) shall be detailed and include the amounts and staffing levels requested for each department or agency represented on the Committee to carry out the functions of that department or agency under this section.
“(2) ANNUAL SPENDING PLAN.—Not later than 90 days following the date of enactment of this subsection, and annually thereafter, the chairperson of the Committee shall transmit to the Committees on Appropriations and Financial Services of the House of Representatives and the Committees on Appropriations and Banking, Housing, and Urban Affairs of the Senate a detailed spending plan to expeditiously meet the requirements of subsections (b), (l), and (m), including estimated expenditures and staffing levels required by operations of the Committee for not less than the following fiscal year at each of the Committee’s member agencies.
“(3) WAIVER.—The chairperson may waive the reporting requirement under paragraph (2) with respect to a fiscal year for which a unified budget request described under paragraph (1) has been submitted.”.
(b) Special hiring authority.—Section 721 of the Defense Production Act of 1950 (50 U.S.C. 4565), as amended by subsection (a), is further amended by adding at the end the following:
“(q) Special hiring authority.—The heads of the departments and agencies represented on the Committee may appoint, without regard to the provisions of sections 3309 through 3318 of title 5, United States Code, candidates directly to positions in the competitive service (as defined in section 2102 of that title) in their respective departments and agencies to administer this section.”.
(c) Testimony required.—Section 721 of the Defense Production Act of 1950 (50 U.S.C. 4565), as amended by subsection (d), is further amended by adding at the end the following:
“(r) Testimony.—
“(1) IN GENERAL.—After submitting the unified budget request described under subsection (p)(1), or the spending plan described under subsection (p)(2), as the case may be, but not later than March 31 of each year, the chairperson, or the chairperson’s designee, shall appear before the Committee on Financial Services of the House of Representatives and present testimony on—
“(A) anticipated resources necessary for operations of the Committee in the following fiscal year at each of the Committee’s member agencies;
“(i) ensure that thorough reviews and investigations are completed as expeditiously as possible;
“(ii) monitor and enforce mitigation agreements; and
“(iii) identify covered transactions for which a notice under clause (i) of subsection (b)(1)(C) or a declaration under clause (v) of subsection (b)(1)(C) was not submitted to the Committee;
“(i) educate the business community, with a particular focus on the technology sector and other sectors of importance to national security, on the goals and operations of the Committee;
“(ii) disseminate to the governments of United States allies best practices of the Committee that—
“(I) strengthen national security reviews of relevant investment transactions; and
“(II) expedite such reviews when appropriate; and
“(iii) promote openness to foreign investment, consistent with national security considerations.
“(2) SUNSET.—This subsection shall have no force or effect on the date that is 7 years following the date of enactment of the Foreign Investment Risk Review Modernization Act of 2018.”.
SEC. 503. Funding.
Section 721 of the Defense Production Act of 1950 (50 U.S.C. 4565), as amended by section 603, is further amended by adding at the end the following:
“(u) Funding.—
“(1) ESTABLISHMENT OF FUND.—There is established in the Treasury of the United States a fund, to be known as the ‘Committee on Foreign Investment in the United States Fund’ (in this subsection referred to as the ‘Fund’), to be administered by the chairperson.
“(2) AUTHORIZATION OF APPROPRIATIONS FOR THE COMMITTEE.—There are authorized to be appropriated to the Fund for each of fiscal years 2019 through 2023 $20,000,000 to perform the functions of the Committee.
“(A) IN GENERAL.—The Committee may assess and collect a fee in an amount determined by the Committee in regulations, without regard to section 9701 of title 31, United States Code, and subject to subparagraph (B), with respect to each covered transaction for which a written notice is submitted to the Committee under subsection (b)(1)(C)(i) or a declaration is submitted to the Committee under subsection (b)(1)(C)(v).
“(B) DETERMINATION OF AMOUNT OF FEE.—
“(I) may not exceed an amount equal to the lesser of—
“(aa) 1 percent of the value of the transaction; or
“(bb) $300,000, as such amount is adjusted annually for inflation pursuant to regulations prescribed by the Committee; and
“(II) shall be determined by the Committee after taking into consideration—
“(bb) the expenses of the Committee associated with conducting activities under this section;
“(cc) the effect of the fee on foreign investment;
“(dd) the unified budget request or annual spending plan, as appropriate, described in section 502 of the Foreign Investment Risk Review Modernization Act of 2018; and
“(ee) such other matters as the Committee considers appropriate.
“(ii) UPDATES.—The Committee shall periodically reconsider and adjust the amount of the fee to be assessed under subparagraph (A) with respect to a covered transaction to ensure that the amount of the fee remains appropriate.
“(i) be deposited into the Fund for use in carrying out activities under this section;
“(4) TRANSFER OF FUNDS.—To the extent provided in advance in appropriations Acts, the chairperson may transfer any amounts in the Fund to any other department or agency represented on the Committee for the purpose of addressing emerging needs in carrying out activities under this section. Amounts so transferred shall be in addition to any other amounts available to that department or agency for that purpose.”.
SEC. 601. Conforming amendment.
Section 721(d)(4)(A) of the Defense Production Act of 1950 (50 U.S.C. 4565(d)(4)(A)) is amended by striking “the foreign interest exercising control” and inserting “a foreign person that would acquire an interest in a United States business or its assets as a result of the covered transaction”.
SEC. 602. Regulatory certainty for United States businesses.
“(s) Regulatory certainty for United States businesses.—
“(1) IN GENERAL.—With respect to mitigating a national security risk that results from a foreign person’s investment in, or joint venture with, a United States business, a member agency of the Committee may not prescribe or implement regulations to require divestment by, or of, the United States business, unless—
“(A) the regulations are prescribed under this section or pursuant to authorities of the President under the International Emergency Economic Powers Act; or
“(B) the President reports to Congress in writing that the regulations—
“(i) are, wherever applicable, consistent with regulations prescribed under this section, including any such regulations pertaining to—
“(I) foreign control or influence over a United States business;
“(II) the identification of emerging, foundational, or other critical technologies; and
“(III) confidentiality requirements with respect to information and documentary material regarding United States businesses; and
“(ii) in the case of regulations prescribed or finalized following the effective date of this subsection, were prescribed in consultation with the chairperson of the Committee and with the head of any member agency determined by the President to be affected by the regulations.
“(2) EXCEPTION FOR PROCUREMENT AUTHORITY.—Paragraph (1) shall not apply to an action by a member agency if the head of the member agency determines that such action is necessary for procurement purposes of the agency or for matters related to the management of the agency’s supply chain.”.
SEC. 603. Cooperation with United States allies and partners.
Section 721 of the Defense Production Act of 1950 (50 U.S.C. 4565), as amended by section 602, is further amended by adding at the end the following:
“(t) Cooperation with United States allies and partners.—
“(1) IN GENERAL.—The chairperson, in consultation with other members of the Committee, is authorized to lead a formal process for the regular exchange of information with governments of countries that are allies or partners of the United States, in the discretion of the chairperson, to protect the national security of the United States and those countries.
“(2) REQUIREMENTS.—The process described under paragraph (1) shall, in the discretion of the chairperson—
“(A) be designed to facilitate the harmonization of action with respect to trends in investment and technology that could pose risks to the national security of the United States and countries that are allies or partners of the United States;
“(B) provide for the sharing of information with respect to specific technologies and entities acquiring such technologies as appropriate to ensure national security; and
“(C) include consultations and meetings with representatives of the governments of such countries on a recurring basis.”.
SEC. 701. Delay in effective date.
This title may be cited as the “Export Control Reform Act of 2018”.
(1) CONTROLLED.—The term “controlled” refers to an item subject to the jurisdiction of the United States under subtitle A.
(2) DUAL-USE.—The term “dual-use”, with respect to an item, means the item has civilian applications and military, terrorism, weapons of mass destruction, or law-enforcement-related applications.
(3) EXPORT.—The term “export”, with respect to an item subject to controls under subtitle A, includes—
(B) regulations that are promulgated, maintained, and amended under the authority of subtitle A on or after the date of the enactment of this Act.
(5) FOREIGN PERSON.—The term “foreign person” means—
(A) any natural person who is not a lawful permanent resident of the United States, citizen of the United States, or any other protected individual (as such term is defined in section 274B(a)(3) of the Immigration and Nationality Act (8 U.S.C. 1324b(a)(3));
(8) REEXPORT.—The term “reexport”, with respect to an item subject to controls under subtitle A, includes—
(9) SECRETARY.—Except as otherwise provided, the term “Secretary” means the Secretary of Commerce.
(10) TECHNOLOGY.—The term “technology” includes foundational information and information and know-how necessary for the development (at all stages prior to serial production), production, use, operation, installation, maintenance, repair, overhaul or refurbishing of an item.
(11) TRANSFER.—The term “transfer”, with respect to an item subject to controls under title I, means a change in the end-use or end user of the item within the same foreign country.
(12) UNITED STATES.—The term “United States” means the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, American Samoa, Guam, the United States Virgin Islands, and any other territory or possession of the United States.
(13) UNITED STATES PERSON.—The term “United States person” means—
(A) for purposes of subtitles A and C—
(i) any individual who is a citizen or national of the United States or who is an individual described in subparagraph (B) of section 274B(a)(3) of the Immigration and Nationality Act (8 U.S.C. 1324b(a)(3));
(B) for purposes of subtitle B, any United States resident or national (other than an individual resident outside the United States and employed by other than a United States person), any domestic concern (including any permanent domestic establishment of any foreign concern) and any foreign subsidiary or affiliate (including any permanent foreign establishment) of any domestic concern which is controlled in fact by such domestic concern, as determined under regulations by the Secretary.
(14) WEAPONS OF MASS DESTRUCTION.—The term “weapons of mass destruction” means nuclear, radiological, chemical, and biological weapons and delivery systems for such weapons.
This subtitle may be cited as the “Export Controls Act of 2018”.
SEC. 812. Statement of policy.
(A) to restrict the exports of items which would make a significant contribution to the military potential of any other country or combination of countries which would prove detrimental to the national security of the United States; and
(2) The national security and foreign policy of the United States require that the export, reexport, and transfer of items, and specific activities of United States persons, wherever located, be controlled for the following purposes:
(3) The national security of the United States requires that the United States maintain its leadership in the science, technology, engineering, and manufacturing sectors, including foundational technology that is essential to innovation. Such leadership requires that United States persons are competitive in global markets. The impact of the implementation of this subtitle on such leadership and competitiveness must be evaluated on an ongoing basis and applied in imposing controls under sections 813 and 814 to avoid negatively affecting such leadership.
(7) The effective administration of export controls requires a clear understanding both inside and outside the United States Government of which items are controlled and an efficient process should be created to update the controls, such as by adding or removing such items.
(11) The authority under this subtitle may be exercised only in furtherance of all of the objectives set forth in paragraphs (1) through (10).
SEC. 813. Authority of the President.
(a) Authority.—In order to carry out the policy set forth in paragraphs (1) through (10) of section 812, the President shall control—
(1) the export, reexport, and transfer of items subject to the jurisdiction of the United States, whether by United States persons or by foreign persons; and
(b) Requirements.—In exercising authority under this subtitle to carry out the policy set forth in paragraphs (1) through (10) of section 812, the President shall—
(1) regulate the export, reexport, and transfer of items described in subsection (a)(1) of United States persons or foreign persons;
(3) secure the cooperation of other governments and multilateral organizations to impose control systems that are consistent, to the extent possible, with the controls imposed under subsection (a);
(c) Application of controls.—The President shall impose controls over the export, reexport, or transfer of items for purposes of the objectives described in subsections (b)(1) or (b)(2) without regard to the nature of the underlying transaction or any circumstances pertaining to the activity, including whether such export, reexport, or transfer occurs pursuant to a purchase order or other contract requirement, voluntary decision, inter-company arrangement, marketing effort, or during a joint venture, joint development agreement, or similar collaborative agreement.
SEC. 814. Additional authorities.
(a) In general.—In carrying out this subtitle on behalf of the President, the Secretary, in consultation with the Secretary of State, the Secretary of Defense, the Secretary of Energy, and the heads of other Federal agencies as appropriate, shall—
(1) establish and maintain a list of items that are controlled under this subtitle;
(2) establish and maintain a list of foreign persons and end-uses that are determined to be a threat to the national security and foreign policy of the United States pursuant to the policy set forth in section 812(2)(A);
(3) prohibit unauthorized exports, reexports, and transfers of controlled items, including to foreign persons in the United States or outside the United States;
(6) establish a process for an assessment to determine whether a foreign item is comparable in quality to an item controlled under this subtitle, and is available in sufficient quantities to render the United States export control of that item or the denial of a license ineffective, including a mechanism to address that disparity;
(7) require measures for compliance with the export controls established under this subtitle;
(8) require and obtain such information from United States persons and foreign persons as is necessary to carry out this subtitle;
(9) require, to the extent feasible, identification of items subject to controls under this subtitle in order to facilitate the enforcement of such controls;
(10) inspect, search, detain, or seize, or impose temporary denial orders with respect to items, in any form, that are subject to controls under this subtitle, or conveyances on which it is believed that there are items that have been, are being, or are about to be exported, reexported, or transferred in violation of this subtitle;
(12) keep the public fully apprised of changes in policy, regulations, and procedures established under this subtitle;
(13) appoint technical advisory committees in accordance with the Federal Advisory Committee Act;
(14) create, as warranted, exceptions to licensing requirements in order to further the objectives of this subtitle;
(15) establish and maintain processes to inform persons, either individually by specific notice or through amendment to any regulation or order issued under this subtitle, that a license from the Bureau of Industry and Security of the Department of Commerce is required to export; and
(16) undertake any other action as is necessary to carry out this subtitle that is not otherwise prohibited by law.
(b) Relationship to IEEPA.—The authority under this subtitle may not be used to regulate or prohibit under this subtitle the export, reexport, or transfer of any item that may not be regulated or prohibited under section 203(b) of the International Emergency Economic Powers Act (50 U.S.C. 1702(b)), except to the extent the President has made a determination necessary to impose controls under subparagraph (A), (B), or (C) of paragraph (2) of such section.
(1) COMMERCE LICENSE REQUIREMENT.—
(A) IN GENERAL.—A license shall be required for the export, reexport, or transfer of items, the control of which is implemented pursuant to subsection (a) by the Secretary, to a country if the Secretary of State has made the following determinations:
(2) NOTIFICATION TO CONGRESS.—
(A) IN GENERAL.—The Secretary of State and the Secretary shall notify the Committee on Foreign Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs and the Committee on Foreign Relations of the Senate at least 30 days before any license is issued as required by paragraph (1).
(B) CONTENTS.—The Secretary of State shall include in the notification required under subparagraph (A)—
(i) a detailed description of the items to be offered, including a brief description of the capabilities of any item for which a license to export, reexport, or transfer the items is sought;
(ii) the reasons why the foreign country, person, or entity to which the export, reexport, or transfer is proposed to be made has requested the items under the export, reexport, or transfer, and a description of the manner in which such country, person, or entity intends to use such items;
(iii) the reasons why the proposed export, reexport, or transfer is in the national interest of the United States;
(iv) an analysis of the impact of the proposed export, reexport, or transfer on the military capabilities of the foreign country, person, or entity to which such transfer would be made;
(v) an analysis of the manner in which the proposed export, reexport, or transfer would affect the relative military strengths of countries in the region to which the items that are the subject of such export, reexport, or transfer would be delivered and whether other countries in the region have comparable kinds and amounts of items; and
(vi) an analysis of the impact of the proposed export, reexport, or transfer on the relations of the United States with the countries in the region to which the items that are the subject of such export, reexport, or transfer would be delivered.
(3) PUBLICATION IN FEDERAL REGISTER.—Each determination of the Secretary of State under paragraph (1)(A)(i) shall be published in the Federal Register, except that the Secretary of State may exclude confidential information and trade secrets contained in such determination.
(4) RESCISSION OF DETERMINATION.—A determination of the Secretary of State under paragraph (1)(A)(i) may not be rescinded unless the President submits to the Speaker of the House of Representatives, the chairman of the Committee on Foreign Affairs, and the chairman of the Committee on Banking, Housing, and Urban Affairs and the chairman of the Committee on Foreign Relations of the Senate—
(7) WAIVER.—The President may waive the requirement under paragraph (1) that a license shall be required for the export, reexport, or transfer of items, the control of which is implemented pursuant to subsection (a) by the Secretary, to a country if the President—
(A) determines that to do so is essential to the national security interests of the United States; and
(B) consults with the Committee on Foreign Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs and the Committee on Foreign Relations of the Senate not less than 15 days prior to the waiver taking effect.
(d) Enhanced controls.—
(1) IN GENERAL.—In furtherance of section 813(a), the President shall, except to the extent authorized by a statute or regulation administered by a Federal department or agency other than the Department of Commerce, require a United States person, wherever located, to apply for and receive a license from the Department of Commerce for—
(A) the export, reexport, or transfer of items described in paragraph (2), including items that are not subject to control under this subtitle; and
(2) ITEMS DESCRIBED.—The items described in this paragraph include—
(e) Additional prohibitions.—The Secretary may inform United States persons, either individually by specific notice or through amendment to any regulation or order issued under this subtitle, that a license from the Bureau of Industry and Security of the Department of Commerce is required to engage in any activity if the activity involves the types of movement, service, or support described in subsection (d). The absence of any such notification does not excuse the United States person from compliance with the license requirements of subsection (d), or any regulation or order issued under this subtitle.
(f) License review standards.—The Secretary shall deny an application to engage in any activity described in subsection (d) if the activity would make a material contribution to any of the items described in subsection (d)(2).
SEC. 815. Administration of export controls.
(a) In general.—The President shall rely on, including through delegations, as appropriate, to the Secretary, the Secretary of Defense, the Secretary of State, the Secretary of Energy, the Director of National Intelligence, and the heads of other Federal agencies as appropriate, to exercise the authority to carry out the purposes set forth in subsection (b).
(1) IN GENERAL.—The purposes of this section include to—
(A) advise the President with respect to—
(i) identifying specific threats to the national security and foreign policy that the authority of this subtitle may be used to address; and
(ii) exercising the authority under this subtitle to implement policies, regulations, procedures, and actions that are necessary to effectively counteract those threats;
(B) review and approve—
(i) criteria for including items on, and removing such an item from, a list of controlled items established under this subtitle;
(iii) criteria for including a person on a list of persons to whom exports, reexports, and transfers of items are prohibited or restricted under this subtitle;
(iv) standards for compliance by persons subject to controls under this subtitle; and
(v) policies and procedures for the end-use monitoring of exports, reexports, and transfers of items controlled under this subtitle;
(C) obtain independent evaluations, including from Inspectors General of the relevant departments or agencies, on a periodic basis on the effectiveness of the implementation of this subtitle in carrying out the policy set forth in section 812; and
(D) benefit from the inherent equities, experience, and capabilities of the Federal officials described in subsection (a), including—
(ii) the views of the Department of State with respect to foreign policy implications of a particular control or decision, including views relating to national security;
(iii) the views of the Department of Energy with respect to the implications for nuclear proliferation of a particular control or decision;
(iv) the views of the Department of Commerce with respect to the administration of an efficient, coherent, reliable, enforceable, and predictable export control system, including views relating to national security, and the resolution of competing views or policy objectives described in section 812; and
(v) the views of other Federal agencies, including the Department of Homeland Security and the Department of Justice, with respect to enforceability of a particular control or decision.
(2) TRANSMITTAL AND IMPLEMENTATION OF EVALUATIONS.—The results of the independent evaluations conducted pursuant to paragraph (1)(C) shall be transmitted to the President and the Congress, in classified form if necessary. Subject to the delegation of authority by the President, the Federal officials described in subsection (a) shall determine, direct, and ensure that improvements recommended in the evaluations are implemented.
(c) Sense of Congress.—It is the sense of Congress that the administration of export controls under this subtitle should be consistent with the procedures relating to export license applications described in Executive Order 12981 (1995).
SEC. 816. Licensing.
(a) In general.—The President shall, as set forth in section 815(a), establish a procedure for the Department of Commerce to license or otherwise authorize the export, reexport, and transfer of items controlled under this subtitle in order to carry out the policy set forth in section 812 and the requirements set forth in section 813(b). The procedure shall ensure that—
(b) Sense of Congress.—It is the sense of Congress that the President should make best efforts to ensure that an accurate, consistent, and timely evaluation and processing of licenses or other requests for authorization to export, reexport, or transfer items controlled under this subtitle is generally accomplished within 30 days from the date of such license request.
(c) Fees.—No fee may be charged in connection with the submission, processing, or consideration of any application for a license or other authorization or other request made in connection with any regulation in effect under the authority of this subtitle.
(d) Additional procedural requirements.—
(1) IN GENERAL.—The procedure required under subsection (a) shall provide for the assessment of the impact of a proposed export of an item on the United States defense industrial base and the denial of an application for a license or a request for an authorization of any export that would have a significant negative impact on such defense industrial base, as described in paragraph (3).
(2) INFORMATION FROM APPLICANT.—The procedure required under subsection (a) shall also require an applicant for a license to provide the information necessary to make the assessment provided under paragraph (1), including whether the purpose or effect of the export is to allow for the significant production of items relevant for the defense industrial base outside the United States.
(3) SIGNIFICANTLY NEGATIVE IMPACT DEFINED.—A significant negative impact on the United States defense industrial base is the following:
SEC. 817. Compliance assistance.
(a) System for seeking assistance.—The President may authorize the Secretary to establish a system to provide United States persons with assistance in complying with this subtitle, which may include a mechanism for providing information, in classified form as appropriate, who are potential customers, suppliers, or business partners with respect to items controlled under this subtitle, in order to further ensure the prevention of the export, reexport, or transfer of items that may pose a threat to the national security or foreign policy of the United States.
(b) Security clearances.—In order to carry out subsection (a), the President may issue appropriate security clearances to persons described in that subsection who are responsible for complying with this subtitle.
(1) IN GENERAL.—Not later than 120 days after the date of the enactment of this Act, the President shall develop and submit to Congress a plan to assist small- and medium-sized United States in export licensing and other processes under this subtitle.
(2) CONTENTS.—The plan shall include, among other things, arrangements for the Department of Commerce to provide counseling to businesses described in paragraph (1) on filing applications and identifying items controlled under this subtitle, as well as proposals for seminars and conferences to educate such businesses on export controls, licensing procedures, and related obligations.
SEC. 818. Requirements to identify and control emerging, foundational, and other critical technologies in export control regulations.
(a) Identification of technologies.—
(1) IN GENERAL.—The President shall establish and, in coordination with the Secretary, the Secretary of Defense, the Secretary of Energy, the Secretary of State, and the heads of other Federal agencies as appropriate, lead a regular, ongoing interagency process to identify emerging and foundational technologies that—
(B) are not critical technologies described in subparagraphs (A) through (D) of section 721(a)(7) of the Defense Production Act of 1950 (50 U.S.C. 4565(a)(7)).
(2) INTERAGENCY PROCESS.—The interagency process required under paragraph (1) shall—
(iii) information relating to reviews and investigations of transactions by the Committee on Foreign Investment in the United States under section 721 of the Defense Production Act of 1950 (50 U.S.C. 4565); and
(iv) information provided by the advisory committees established by the Secretary to advise the Under Secretary of Commerce for Industry and Security on controls under the Export Administration Regulations, including the Emerging Technology and Research Advisory Committee.
(i) the development of emerging and foundational technologies in other countries;
(ii) the effect export controls imposed pursuant to this section may have on the development of the technologies in the United States; and
(iii) the effectiveness of export controls imposed pursuant to this section on limiting the proliferation of emerging and foundational technologies to foreign countries;
(C) provide for the nomination of an emerging or foundational technology to be identified under subsection (a) by the Secretary, the Secretary of Defense, the Secretary of State, the Secretary of Energy, or the heads of other Federal agencies as appropriate;
(D) ensure that, not later than 60 days after the nomination of an emerging or foundational technology under subparagraph (C), the Secretary makes a determination, in coordination with the Secretary of Defense, the Secretary of State, the Secretary of Energy, and the heads of other Federal agencies as appropriate, regarding whether additional or modified controls on the technology under this section are warranted, including through informing a person that a license is required to export the technology, or that more time and input from the sources described in this paragraph is needed before a final determination is made to issue a rule to impose controls over such technology; and
(E) include a notice and comment period.
(b) Commerce controls.—
(1) IN GENERAL.—The Secretary shall, except to the extent inconsistent with the authorities described in subsection (a)(1)(B), establish appropriate controls on the export, reexport, or transfer of technology identified pursuant to subsection (a) and subject to the Export Administration Regulations, including by publishing additional regulations.
(2) LEVELS OF CONTROL.—
(A) IN GENERAL.—The Secretary may, in coordination with the Secretary of Defense, the Secretary of Energy, the Secretary of State, and the heads of other Federal agencies as appropriate, specify the level of control to apply under paragraph (1) with respect to the export of technology described in that paragraph, including a requirement for a license or other authorization, to export, reexport, or transfer of that technology.
(B) CONSIDERATIONS.—In determining under subparagraph (A) the level of control that is appropriate for technology described in paragraph (1), the Secretary shall take into account—
(C) MINIMUM REQUIREMENTS.—The Secretary shall, at a minimum and except as required by paragraph (4), require a license to export, reexport, or transfer technology described in paragraph (1) to or in a country subject to an embargo, including an arms embargo, imposed by the United States.
(3) REVIEW OF LICENSE APPLICATIONS.—
(A) PROCEDURES.—The procedures set forth in Executive Order 12981 (50 U.S.C. 4603 note; relating to the administration of export controls) or any successor order, shall apply to the review of an application for a license for the export, reexport, or transfer of technology described in paragraph (1).
(B) CONSIDERATION OF INFORMATION RELATING TO NATIONAL SECURITY.—In reviewing an application for a license or other authorization for the export, reexport, or transfer of technology described in paragraph (1), the Secretary shall take into account information provided by the Director of National Intelligence regarding any threat to the national security of the United States posed by the proposed export, reexport, or transfer. The Director of National Intelligence shall provide such information on the request of the Secretary.
(C) DISCLOSURE RELATING TO COLLABORATIVE ARRANGEMENTS.—In the case of an application for a license or other authorization for the export, reexport, or transfer of technology described in paragraph (1) submitted by or on behalf of a joint venture, joint development agreement, or similar collaborative arrangement, the Secretary may require the applicant to identify, in addition to any foreign person participating in the arrangement, any foreign person with significant ownership interest in a foreign person participating in the arrangement.
(A) MANDATORY EXCEPTION.—The Secretary may not control under this subsection the export of any technology described in paragraph (1) if the regulation of that technology is prohibited under any other provision of law.
(B) REGULATORY EXEMPTIONS.—In prescribing regulations under paragraph (1), the Secretary may include appropriate regulatory exemptions to the requirements of that paragraph for the export, reexport, or transfer of technology described in paragraph (1).
(c) Multilateral controls.—
(1) IN GENERAL.—The Secretary of State, in coordination with the Secretary, the Secretary of Defense, the Secretary of Energy, and heads of other Federal agencies as appropriate, shall propose to the relevant multilateral export control regimes in the following year that a technology identified through the interagency process required under subsection (a) be added to the list of technology controlled by such regimes.
(2) REVIEW OF CONTINUED UNILATERAL EXPORT CONTROLS.—The Secretary, with respect to those items on the Commerce Control List maintained under part 774 of title 15, Code of Federal Regulations, and in coordination with the Secretary of Defense, the Secretary of Energy, and the Secretary of State, and the Secretary of State, with respect to those items on the United States Munitions List and in coordination with the Secretary of Defense and the heads of other Federal agencies as appropriate, shall determine whether national security concerns warrant continued unilateral export controls over a technology proposed for multilateral control under paragraph (1) if the relevant multilateral export control regime does not agree to list such technology on its control list within three years of a proposal by the United States.
(d) Report.—Not later than 180 days after the date of the enactment of this Act, and not less frequently than every 180 days thereafter, the Secretary, in coordination with the Secretary of Defense, the Secretary of State, the Secretary of Energy, and the heads of other Federal agencies as appropriate, shall submit to the Committee on Foreign Investment in the United States on a semiannual basis a report on updates of any key actions taken pursuant to this section.
(e) Rule of construction.—Nothing in this section shall be construed to alter or limit—
(1) the authority of the President and the Secretary of State to designate those items that are considered to be defense articles or defense services for purposes of the Arms Export Control Act (22 U.S.C. 2751 et seq.) or to otherwise regulate such items; or
(2) the authority of the President under the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.), the Nuclear Non-Proliferation Act of 1978 (22 U.S.C. 3201 et seq.), the Energy Reorganization Act of 1974 (42 U.S.C. 5801 et seq.), this title, or any other provision of law relating to the control of exports.
(f) Sense of Congress.—It is the sense of the Congress that the President should request in the annual budget of the President submitted under section 1105(a) of title 31, United States Code, sufficient resources to enable the relevant departments and agencies to effectively implement this section.
SEC. 819. Review relating to countries subject to comprehensive United States arms embargo.
(a) In general.—The Secretary, the Secretary of Defense, the Secretary of Energy, the Secretary of State, and the heads of other Federal agencies as appropriate, shall conduct a review of—
(1) section 744.21 of title 15, Code of Federal Regulations, including to assess whether the current and anticipated risks of direct or indirect diversion, such as from policies and practices that effectively obscure distinctions between civil and military end-users and end-uses, require that the scope of control under such section should be expanded to apply to exports, reexports, or transfers for military end uses and military end users in countries that are subject to a comprehensive United States arms embargo and countries that are subject to a United Nations arms embargo;
(2) entries on the Commerce Control List maintained under part 774 of title 15, Code of Federal Regulations, that do not impose license requirements for exports, reexports, or transfers of items to countries subject to a comprehensive United States arms embargo;
(3) whether there should be a presumption of denial for an application for a license to export, reexport, or transfer an item on the Commerce Control List subject to national security controls or regional stability controls under part 742 of the Export Administration Regulations if that item is reasonably likely to contribute, directly or indirectly, to the military or intelligence capabilities of any country with respect to which the United States has in place an arms embargo, sanctions, or comparable restrictions, including to or within any country listed in Country Group D:5 in Supplement No. 1 to part 740 of the Export Administration Regulations;
(4) whether there should be a presumption of denial for an application for a license to export, reexport, or transfer an emerging or foundational technology identified in section 818(a) to or within a country identified in section 744.21 of title 15, Code of Federal Regulations or Country Group E in Supplement No. 1 to part 740 of the Export Administration Regulations; and
(5) without limiting the effect of paragraphs (3) and (4), whether there should be a presumption of approval for an application for a license to export, reexport, or transfer an item on the Commerce Control List if that item is for a civil end use.
(b) Implementation of results of review.—Not later than 270 days after the date of the enactment of this Act, the Secretary shall implement the results of the review conducted under subsection (a).
SEC. 820. Penalties.
(1) IN GENERAL.—It shall be unlawful for a person to violate, attempt to violate, conspire to violate, or cause a violation of this subtitle or of any regulation, order, license, or other authorization issued under this subtitle, including any of the unlawful acts described in paragraph (2).
(A) No person may engage in any conduct prohibited by or contrary to, or refrain from engaging in any conduct required by this subtitle, the Export Administration Regulations, or any order, license or authorization issued thereunder.
(B) No person may cause or aid, abet, counsel, command, induce, procure, permit, or approve the doing of any act prohibited, or the omission of any act required by this subtitle, the Export Administration Regulations, or any order, license or authorization issued thereunder.
(C) No person may solicit or attempt a violation of this subtitle, the Export Administration Regulations, or any order, license or authorization issued thereunder.
(D) No person may conspire or act in concert with one or more other persons in any manner or for any purpose to bring about or to do any act that constitutes a violation of this subtitle, the Export Administration Regulations, or any order, license or authorization issued thereunder.
(E) No person may order, buy, remove, conceal, store, use, sell, loan, dispose of, transfer, transport, finance, forward, or otherwise service, in whole or in part, or conduct negotiations to facilitate such activities for, any item exported or to be exported from the United States, or that is otherwise subject to the Export Administration Regulations, with knowledge that a violation of this subtitle, the Export Administration Regulations, or any order, license or authorization issued thereunder, has occurred, is about to occur, or is intended to occur in connection with the item unless valid authorization is obtained therefor.
(iii) for the purpose of or in connection with effecting any export, reexport, or transfer of an item subject to the Export Administration Regulations or a service or other activity of a United States person described in section 814.
(G) No person may engage in any transaction or take any other action with intent to evade the provisions of this subtitle, the Export Administration Regulations, or any order, license, or authorization issued thereunder.
(J) No person may take any action that is prohibited by a denial order issued by the Department of Commerce to prevent imminent violations of this subtitle, the Export Administration Regulations, or any order, license or authorization issued thereunder.
(3) ADDITIONAL REQUIREMENTS.—For purposes of subparagraph (G), any representation, statement, or certification made by any person shall be deemed to be continuing in effect. Each person who has made a representation, statement, or certification to the Department of Commerce relating to any order, license, or other authorization issued under this subtitle shall notify the Department of Commerce, in writing, of any change of any material fact or intention from that previously represented, stated, or certified, immediately upon receipt of any information that would lead a reasonably prudent person to know that a change of material fact or intention had occurred or may occur in the future.
(b) Criminal penalty.—A person who willfully commits, willfully attempts to commit, or willfully conspires to commit, or aids and abets in the commission of, an unlawful act described in subsection (a)—
(1) AUTHORITY.—The President may impose the following civil penalties on a person for each violation by that person of this subtitle or any regulation, order, or license issued under this subtitle, for each violation:
(B) Revocation of a license issued under this subtitle to the person.
(C) A prohibition on the person’s ability to export, reexport, or transfer any items, whether or not subject to controls under this subtitle.
(3) STANDARDS FOR LEVELS OF CIVIL PENALTY.—The Secretary may by regulation provide standards for establishing levels of civil penalty under this subsection based upon factors such as the seriousness of the violation, the culpability of the violator, and such mitigating factors as the violator’s record of cooperation with the Government in disclosing the violation.
(1) FORFEITURE.—Any person who is convicted under subsection (b) of a violation of a control imposed under section 813 (or any regulation, order, or license issued with respect to such control) shall, in addition to any other penalty, forfeit to the United States—
(i) deny the eligibility of any person convicted of a criminal violation described in subparagraph (B) to export, reexport, or transfer outside the United States any item, whether or not subject to controls under this subtitle, for a period of up to 10 years beginning on the date of the conviction; and
(ii) revoke any license or other authorization to export, reexport, or transfer items that was issued under this subtitle and in which such person has an interest at the time of the conviction.
(i) this subtitle (or any regulation, license, or order issued under this subtitle);
(iii) section 371, 554, 793, 794, or 798 of title 18, United States Code;
(iv) section 1001 of title 18, United States Code;
(v) section 4(b) of the Internal Security Act of 1950 (50 U.S.C. 783(b)); or
(vi) section 38 of the Arms Export Control Act (22 U.S.C. 2778).
(2) APPLICATION TO OTHER PARTIES.—The Secretary may exercise the authority under paragraph (1) with respect to any person related, through affiliation, ownership, control, position of responsibility, or other connection in the conduct of trade or business, to any person convicted of any violation of law set forth in paragraph (1), upon a showing of such relationship with the convicted party, and subject to the procedures set forth in subsection (c)(2).
(1) the availability of other administrative or judicial remedies with respect to violations of this subtitle, or any regulation, order, license or other authorization issued under this subtitle;
(2) the authority to compromise and settle administrative proceedings brought with respect to violations of this subtitle, or any regulation, order, license, or other authorization issued under this subtitle; or
SEC. 821. Enforcement.
(a) Authorities.—In order to enforce this subtitle, the Secretary, on behalf of the President shall exercise, in addition to relevant enforcement authorities of other Federal agencies, the authority to—
(2) require, inspect, and obtain books, records, and any other information from any person subject to the provisions of this subtitle;
(4) conduct investigations (including undercover) in the United States and in other countries using all applicable laws of the United States, including intercepting any wire, oral, and electronic communications, conducting electronic surveillance, using pen registers and trap and trace devices, and carrying out acquisitions, to the extent authorized under chapters 119, 121, and 206 of title 18, United States Code;
(5) inspect, search, detain, seize, or issue temporary denial orders with respect to items, in any form, that are subject to controls under this subtitle, or conveyances on which it is believed that there are items that have been, are being, or are about to be exported, reexported, or transferred in violation of this subtitle, or any regulations, order, license, or other authorization issued thereunder;
(1) IN GENERAL.—The Secretary, in consultation with the heads of other appropriate Federal agencies, should publish and update “best practices” guidelines to assist persons in developing and implementing, on a voluntary basis, effective export control programs in compliance with the regulations issued under this subtitle.
(2) EXPORT COMPLIANCE PROGRAM.—The implementation by a person of an effective export compliance program and a high quality overall export compliance effort by a person should ordinarily be given weight as mitigating factors in a civil penalty action against the person under this subtitle.
(d) Reference to enforcement.—For purposes of this section, a reference to the enforcement of, or a violation of, this subtitle includes a reference to the enforcement or a violation of any regulation, order, license or other authorization issued pursuant to this subtitle.
(A) IN GENERAL.—Information obtained under this subtitle may be withheld from disclosure only to the extent permitted by statute, except that information described in subparagraph (B) shall be withheld from public disclosure and shall not be subject to disclosure under section 552(b)(3) of title 5, United States Code, unless the release of such information is determined by the Secretary to be in the national interest.
(B) INFORMATION DESCRIBED.—Information described in this subparagraph is information submitted or obtained in connection with an application for a license or other authorization to export, reexport, or transfer items, engage in other activities, a recordkeeping or reporting requirement, enforcement activity, or other operations under this subtitle, including—
(i) IN GENERAL.—Any information obtained at any time under any provision of the Export Administration Act of 1979 (as in effect on the day before the date of the enactment of this Act and as continued in effect pursuant to the International Emergency Economic Powers Act), under the Export Administration Regulations, or under this subtitle, including any report or license application required under any such provision, shall be made available to a committee or subcommittee of Congress of appropriate jurisdiction, upon the request of the chairman or ranking minority member of such committee or subcommittee.
(A) IN GENERAL.—Any Federal official described in section 815(a) who obtains information that is relevant to the enforcement of this subtitle, including information pertaining to any investigation, shall furnish such information to each appropriate department, agency, or office with enforcement responsibilities under this section to the extent consistent with the protection of intelligence, counterintelligence, and law enforcement sources, methods, and activities.
(C) EXCHANGE OF INFORMATION.—The President shall ensure that the heads of departments, agencies, and offices with enforcement authorities under this subtitle, consistent with protection of law enforcement and its sources and methods—
(D) INFORMATION SHARING WITH FEDERAL AGENCIES.—Licensing or enforcement information obtained under this subtitle may be shared with departments, agencies, and offices that do not have enforcement authorities under this subtitle on a case-by-case basis.
(g) Reporting requirements.—In the administration of this section, reporting requirements shall be designed to reduce the cost of reporting, recordkeeping, and documentation to the extent consistent with effective enforcement and compilation of useful trade statistics. Reporting, recordkeeping, and documentation requirements shall be periodically reviewed and revised in the light of developments in the field of information technology.
(1) IN GENERAL.—Any tangible items seized under subsection (a) by designated officers or employees shall be subject to forfeiture to the United States in accordance with applicable law, except that property seized shall be returned if the property owner is not found guilty of a civil or criminal violation under section 819.
(i) Rule of construction.—Nothing in this Act shall be construed to limit or otherwise affect the enforcement authorities of the Department of Homeland Security which may also complement those set forth herein.
SEC. 822. Administrative procedure.
(a) In general.—The functions exercised under this subtitle shall not be subject to sections 551, 553 through 559, and 701 through 706 of title 5, United States Code.
(b) Administrative law judges.—The Secretary is authorized to appoint an administrative law judge, and may designate administrative law judges from other Federal agencies who are provided pursuant to a legally authorized interagency agreement with the Department of Commerce, and consistent with the provisions of section 3105 of title 5, United States Code.
(c) Amendments to regulations.—The President shall notify in advance the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Foreign Affairs of the House of Representatives of any proposed amendments to the Export Administration Regulations with an explanation of the intent and rationale of such amendments.
SEC. 823. Review of interagency dispute resolution process.
(c) Operating Committee for Export Policy.—In any case in which the Operating Committee for Export Policy established by Executive Order 12981 (December 5, 1991; relating to Administration of Export Controls) is meeting to conduct an interagency dispute resolution relating to applications for export licenses under the Export Administration Regulations, matters relating to jet engine hot section technology, commercial communication satellites, and emerging or foundational technology shall be decided by majority vote.
SEC. 824. Coordination with other agencies on commodity classification and removal of export controls.
(a) In general.—Notwithstanding any other provision of law, the Secretary shall coordinate with the Secretary of Defense, the Secretary of State, and the Secretary of Energy before taking any of the actions described in subsection (b).
(b) Actions described.—The actions described in this subsection are the following:
(1) Amending the Commerce Control List set forth in Supplement No. 1 to part 774 of the Export Administration Regulations to remove an item from the list.
(2) Providing a commodity classification determination under section 748.3 of the Export Administration Regulations, including with respect to—
(A) “600 series” items;
(B) commercial communication satellites (ECCN 9x515);
(C) emerging and foundational technologies identified under section 818(a);
(D) “specially designed” items under part 774 of title 15, Code of Federal Regulations; or
(E) any other items that the Secretary, in coordination with the Secretary of Defense, the Secretary of State, and the Secretary of Energy, identifies and mutually determines is materially significant enough to warrant interagency consultation before the Secretary determines to add the item to the Commerce Control List and provide the item with a Export Control Classification Number (ECCN).
(3) Amending the Commerce Control List to remove any control imposed pursuant to subsection (b) of section 818 on the export, reexport, or transfer of an emerging or foundational technology identified under subsection (a) of that section.
(4) Amending the Export Administration Regulations to expand the scope or application of a license exception authorized by section 740 of the Export Administration Regulations.
SEC. 825. Annual report to Congress.
(a) In general.—The President shall submit to Congress, by December 31 of each year, a report on the implementation of this subtitle during the preceding fiscal year. The report shall include a review of—
(1) the effect of controls imposed under this subtitle on exports, reexports, and transfers of items in addressing threats to the national security or foreign policy of the United States, including a description of licensing processing times;
(8) efforts undertaken within the previous year to comply with the requirements of section 819, including any critical technologies identified under such section and how or whether such critical technologies were controlled for export; and
SEC. 826. Repeal.
SEC. 827. Effect on other Acts.
(a) In general.—Except as otherwise provided in this subtitle, nothing contained in this subtitle shall be construed to modify, repeal, supersede, or otherwise affect the provisions of any other laws authorizing control over exports, reexports, or transfers of any item, or activities of United States persons subject to the Export Administration Regulations.
(1) IN GENERAL.—The authority granted to the President under this subtitle shall be exercised in such manner so as to achieve effective coordination with all export control and sanctions authorities exercised by Federal departments and agencies delegated with authority under this subtitle, particularly the Department of State, the Department of the Treasury, and the Department of Energy.
(c) Nonproliferation controls.—Nothing in this subtitle shall be construed to supersede the procedures published by the President pursuant to section 309(c) of the Nuclear Non-Proliferation Act of 1978.
SEC. 828. Transition provisions.
(a) In general.—All delegations, rules, regulations, orders, determinations, licenses, or other forms of administrative action that have been made, issued, conducted, or allowed to become effective under the Export Administration Act of 1979 (as in effect on the day before the date of the enactment of this Act and as continued in effect pursuant to the International Emergency Economic Powers Act), or the Export Administration Regulations, and are in effect as of the date of the enactment of this Act, shall continue in effect according to their terms until modified, superseded, set aside, or revoked under the authority of this subtitle.
(b) Administrative and judicial proceedings.—This subtitle shall not affect any administrative or judicial proceedings commenced, or any applications for licenses made, under the Export Administration Act of 1979 (as in effect on the day before the date of the enactment of this Act and as continued in effect pursuant to the International Emergency Economic Powers Act), or the Export Administration Regulations.
(1) STATE SPONSORS OF TERRORISM.—Any determination that was made under section 6(j) of the Export Administration Act of 1979 (as in effect on the day before the date of the enactment of this Act and as continued in effect pursuant to the International Emergency Economic Powers Act) shall continue in effect as if the determination had been made under section 814(c) of this Act.
(2) REFERENCE.—Any reference in any other provision of law to a country the government of which the Secretary of State has determined, for purposes of section 6(j) of the Export Administration Act of 1979 (as in effect on the day before the date of the enactment of this Act and as continued in effect pursuant to the International Emergency Economic Powers Act), is a government that has repeatedly provided support for acts of international terrorism shall be deemed to refer to a country the government of which the Secretary of State has determined, for purposes of section 814(c), is a government that has repeatedly provided support for acts of international terrorism.
This subtitle may be cited as the “Anti-Boycott Act of 2018”.
SEC. 832. Statement of policy.
SEC. 833. Foreign boycotts.
(1) PROHIBITIONS.—For the purpose of implementing the policies set forth in section 832, the President shall issue regulations prohibiting any United States person, with respect to that person’s activities in the interstate or foreign commerce of the United States, from taking or knowingly agreeing to take any of the following actions with intent to comply with, further, or support any boycott fostered or imposed by any foreign country, against a country which is friendly to the United States and which is not itself the object of any form of boycott pursuant to United States law or regulation:
(1) IN GENERAL.—In addition to the regulations issued pursuant to subsection (a), regulations issued under subtitle A to carry out the policies set forth in section 812(1)(D) shall implement the policies set forth in this section.
(2) REQUIREMENTS.—Such regulations shall require that any United States person receiving a request for the furnishing of information, the entering into or implementing of agreements, or the taking of any other action referred to in subsection (a) shall report that fact to the Secretary, together with such other information concerning such request as the Secretary may require for such action as the Secretary considers appropriate for carrying out the policies of that section. Such person shall also report to the Secretary whether such person intends to comply and whether such person has complied with such request. Any report filed pursuant to this paragraph shall be made available promptly for public inspection and copying, except that information regarding the quantity, description, and value of any goods or technology to which such report relates may be kept confidential if the Secretary determines that disclosure thereof would place the United States person involved at a competitive disadvantage. The Secretary shall periodically transmit summaries of the information contained in such reports to the Secretary of State for such action as the Secretary of State, in consultation with the Secretary, considers appropriate for carrying out the policies set forth in section 832.
(c) Preemption.—The provisions of this section and the regulations issued pursuant thereto shall preempt any law, rule, or regulation of any of the several States or the District of Columbia, or any of the territories or possessions of the United States, or of any governmental subdivision thereof, which law, rule, or regulation pertains to participation in, compliance with, implementation of, or the furnishing of information regarding restrictive trade practices or boycotts fostered or imposed by foreign countries against other countries friendly to the United States.
SEC. 834. Enforcement.
(a) Criminal penalty.—A person who willfully commits, willfully attempts to commit, or willfully conspires to commit, or aids or abets in the commission of, an unlawful act section 833—
(b) Civil penalties.—The President may impose the following civil penalties on a person who violates section 833 or any regulation issued under this subtitle:
(3) A prohibition on the person’s ability to export, reexport, or transfer any items controlled under subtitle A.
(c) Procedures.—Any civil penalty or administrative sanction (including any suspension or revocation of authority to export) under this section may be imposed only after notice and opportunity for an agency hearing on the record in accordance with sections 554 through 557 of title 5, United States Code, and shall be subject to judicial review in accordance with chapter 7 of such title.
(d) Standards for levels of civil penalty.—The President may by regulation provide standards for establishing levels of civil penalty under this section based upon factors such as the seriousness of the violation, the culpability of the violator, and the violator’s record of cooperation with the Government in disclosing the violation.
SEC. 841. Missile proliferation control violations.
(i) exports, reexports, or transfers of any item on the MTCR Annex, in violation of the provisions of section 38 (22 U.S.C. 2778) or chapter 7 of the Arms Export Control Act, subtitle A, or any regulations or orders issued under any such provisions; or
(i) If the item on the MTCR Annex involved in the export, reexport, or transfer is missile equipment or technology within category II of the MTCR Annex, then the President shall deny to such United States person, for a period of 2 years, licenses for the transfer of missile equipment or technology controlled under subtitle A.
(ii) If the item on the MTCR Annex involved in the export, reexport, or transfer is missile equipment or technology within category I of the MTCR Annex, then the President shall deny to such United States person, for a period of not less than 2 years, all licenses for items the transfer of which is controlled under subtitle A.
(2) DISCRETIONARY SANCTIONS.—In the case of any determination referred to in paragraph (1), the President may pursue any other appropriate penalties under section 820.
(I) exports, reexports, or transfers any MTCR equipment or technology that contributes to the design, development, or production of missiles in a country that is not an MTCR adherent and would be, if it were United States-origin equipment or technology, subject to the jurisdiction of the United States under subtitle A;
(i) If the item involved in the export, reexport, or transfer is within category II of the MTCR Annex, then the President shall deny, for a period of 2 years, licenses for the transfer to such foreign person of missile equipment or technology the transfer of which is controlled under subtitle A.
(ii) If the item involved in the export, reexport, or transfer is within category I of the MTCR Annex, then the President shall deny, for a period of not less than 2 years, licenses for the transfer to such foreign person of items the transfer of which is controlled under subtitle A.
SEC. 842. Chemical and biological weapons proliferation sanctions.
(A) through the export from the United States of any item that is subject to the jurisdiction of the United States under this subtitle; or
(B) through the export from any other country of any item that would be, if they were United States goods or technology, subject to the jurisdiction of the United States under this subtitle,
(B) any foreign country whose government is determined for purposes of section 914(c) to be a government that has repeatedly provided support for acts of international terrorism; or
(1) CRITERION FOR WAIVER.—The President may waive the application of any sanction imposed on any person pursuant to this section if the President determines and certifies to the appropriate congressional committees that such waiver is important to the national security interests of the United States.
SEC. 851. Under Secretary of Commerce for Industry and Security.
(a) In general.—The President shall appoint, by and with the advice and consent of the Senate, an Under Secretary of Commerce for Industry and Security who shall carry out all the functions of the Secretary under this title and such other provisions of law that relate to the implementation of the dual-use export system.
(b) Assistant Secretaries of Commerce.—The President shall appoint, by and with the advice and consent of the Senate, two Assistant Secretaries of Commerce to assist the Under Secretary in carrying out the functions described in paragraph (1).
Vote on H.R. 5841