S.Amdt. 6384

1. Adds SEC. 1254. TRANSPARENCY IN OUTBOUND INVESTMENT IN NATIONAL CRITICAL TECHNOLOGIES at the end of subtitle D of title XII

   Adds a section

   In S.Amdt. 5499 as proposed

   (2) modifies or deletes in any way the content of the project as a result of any direction from any entity of the Government of the People's Republic of China or the Chinese Communist Party.

   Inserted: SEC. 1254. TRANSPARENCY IN OUTBOUND INVESTMENT IN NATIONAL CRITICAL TECHNOLOGIES.

   Inserted: The Defense Production Act of 1950 (50 U.S.C. 4501 et seq.) is amended by adding at the end the following:

   Inserted: "TITLE VIII--OUTBOUND INVESTMENT IN NATIONAL CRITICAL TECHNOLOGIES

   Inserted: "SEC. 801. DEFINITIONS.

   Inserted: "In this title:

   Inserted: "(1) Appropriate congressional committees.--The term 'appropriate congressional committees' means--

   Inserted: "(A) the Committee on Banking, Housing, and Urban Affairs of the Senate; and

   Inserted: "(B) the Committee on Financial Services of the House of Representatives.

   Inserted: "(2) Country of concern.--The term 'country of concern' means the People's Republic of China.

   Inserted: "(3) Covered foreign entity.--

   Inserted: "(A) In general.--Subject to regulations prescribed by the President in accordance with section 806, and except as provided in subparagraph (B), the term 'covered foreign entity' means--

   Inserted: "(i) any entity that is incorporated in, has a principal place of business in, or is organized under the laws of, a country of concern;

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   Inserted: "(ii) any entity the equity securities of which are primarily traded on one or more exchanges in a country of concern; or

   Inserted: "(iii) any entity in which any entity described in clause (i) or (ii), or a group of such entities, holds, individually or in aggregate, directly or indirectly, an ownership interest of greater than 50 percent.

   Inserted: "(B) Exception.--The term 'covered foreign entity' shall not include any entity described in subparagraph (A)(ii) that can demonstrate that a majority of the equity interest in such entity is ultimately owned by nationals of the United States or individuals who are not nationals of a country of concern, as defined in regulations prescribed by the President.

   Inserted: "(4) Covered investment.--

   Inserted: "(A) In general.--Subject to such regulations as may be prescribed by the President in accordance with section 806, and except as provided in subparagraph (C), the term 'covered investment' means any investment engaged in by a United States person on or after the effective date of such regulations--

   Inserted: "(i) that involves--

   Inserted: "(I) a direct acquisition of an equity interest or contingent equity interest in, or monetary capital contribution in, a covered foreign entity;

   Inserted: "(II) an arrangement for an interest in the short- or long-term debt obligations of a covered foreign entity that include government rights characteristic of an equity investment, management, or other important rights;

   Inserted: "(III) the establishment of a wholly owned subsidiary in a country of concern;

   Inserted: "(IV) the establishment of a joint venture in a country of concern or with a covered foreign entity; or

   Inserted: "(V) any deceptive or structured arrangement attempting to evade falling into a category described in any of subclauses (I) through (IV); and

   Inserted: "(ii) if--

   Inserted: "(I) the covered foreign entity the investment is in, or that is formed as a result of the investment, produces, designs, tests, manufactures, fabricates, or develops a national critical technology; and

   Inserted: "(II) as a result of the investment, the United States person imparts management or procedural know-how to the entity described in subclause (I) that would result in product improvement or technology development advances in such technology.

   Inserted: "(B) Exceptions.--The term 'covered investment' does not include--

   Inserted: "(i) any transaction for which the President determines the value is de minimis;

   Inserted: "(ii) any category of transactions that the President determines is in the national interest of the United States, as may be defined by the President through regulations;

   Inserted: "(iii) the acquisition by a United States person of a multinational corporation that is not headquartered in a country of concern but has subsidiaries or other assets located in a country of concern;

   Inserted: "(iv) basic research collaboration, including open source research;

   Inserted: "(v) sharing of publicly available know-how, including in standards organizations related to a country of concern; or

   Inserted: "(vi) any transaction that occurred before the effective date of regulations prescribed in accordance with section 806.

   Inserted: "(5) Export administration regulations.--The term 'Export Administration Regulations' has the meaning given that term in section 1742 of the Export Control Reform Act of 2018 (50 U.S.C. 4801).

   Inserted: "(6) National critical technology.--The term 'national critical technology' means a technology that--

   Inserted: "(A) relates to semiconductors, artificial intelligence, or quantum computing; and

   Inserted: "(B) if the technology were produced in the United States, would be--

   Inserted: "(i)(I) included on the Commerce Control List maintained by the Bureau of Industry and Security and set forth in Supplement No. 1 to part 774 of the Export Administration Regulations; or

   Inserted: "(II) identified as an emerging and foundational technology pursuant to section 1758 of the Export Control Reform Act of 2018 (50 U.S.C. 4817); and

   Inserted: "(ii) subject to the requirement for a license under the Export Administration Regulations for a United States person to export the technology to a country of concern.

   Inserted: "(7) United states.--The term 'United States' means the several States, the District of Columbia, and any territory or possession of the United States.

   Inserted: "(8) United states person.--The term 'United States person' means--

   Inserted: "(A) an individual who is a citizen or national of the United States or alien admitted for permanent residence in the United States; and

   Inserted: "(B) any corporation, partnership, or entity organized under the laws of the United States or the laws of any jurisdiction within the United States.

   Inserted: "SEC. 802. ADMINISTRATION OF INVESTMENT NOTIFICATION AUTHORITY.

   Inserted: "The President shall delegate the authorities and functions under this title to the Assistant Secretary of the Treasury for Investment Security.

   Inserted: "SEC. 803. MANDATORY NOTIFICATION OF COVERED INVESTMENTS.

   Inserted: "(a) Mandatory Notification.--

   Inserted: "(1) In general.--Subject to regulations prescribed by the President in accordance with section 806, on and after the effective date of such regulations, a United States person that plans to engage in a covered investment shall submit to the President a complete written notification of the investment not later than 15 days after the date of the start of the covered investment.

   Inserted: "(2) Inspection of notification.--The President shall--

   Inserted: "(A) upon receipt of a notification under paragraph (1), promptly inspect the notification for completeness; and

   Inserted: "(B) if the notification is incomplete, promptly inform the United States person that submits the notification that the notification is not complete and provide an explanation of relevant material respects in which the notification is not complete.

   Inserted: "(b) Confidentiality of Information.--

   Inserted: "(1) In general.--Except as provided in paragraph (2), any information or documentary material and any information or materials derived from such information or documentary materials filed with the President pursuant to this section shall be exempt from disclosure under section 552 of title 5, United States Code, and no such information or documentary material may be made public.

   Inserted: "(2) Exceptions.--The exemption from disclosure provided by paragraph (1) shall not prevent the disclosure of the following:

   Inserted: "(A) Information relevant to any administrative or judicial action or proceeding.

   Inserted: "(B) Information to the chairman and ranking member of the appropriate congressional committees.

   Inserted: "(C) Information important to the national security analysis or actions of the President to any domestic governmental entity, or to any foreign governmental entity of a United States ally or partner, under the exclusive direction and authorization of the President, only to the extent necessary for national security purposes, and subject to appropriate confidentiality and classification requirements.

   Inserted: "(D) Information that the parties have consented to be disclosed to third parties.

   Inserted: "SEC. 804. ANNUAL REPORT.

   Inserted: "(a) In General.--Not later than one year after the date on which the regulations required by section 806 take effect, and annually thereafter, the President shall submit to the appropriate congressional committees a report describing, for the year preceding submission of the report, the notifications received under section 803(a).

   Inserted: "(b) Form of Report.--The report required by subsection (a) shall be submitted in unclassified form, but may include a classified annex.

   Inserted: "SEC. 805. PENALTIES AND ENFORCEMENT.

   Inserted: "(a) Unlawful Acts.--Subject to regulations prescribed by the President in accordance with section 806, the following shall be unlawful:

   Inserted: "(1) Failing to submit a notification under section 803(a) with respect to a covered investment.

   Inserted: "(2) Making a material misstatement or to omit a material fact in any information submitted to the President under this title.

   Inserted: "(b) Civil Penalties.--A civil penalty may be imposed on any person that commits an unlawful act described in subsection (a) in an amount not to exceed the greater of--

   Inserted: "(1) $250,000; or

   Inserted: "(2) an amount that is twice the amount of the covered investment that is the basis of the violation with respect to which the penalty is imposed.

   Inserted: "SEC. 806. REQUIREMENT FOR REGULATIONS.

   Inserted: "(a) In General.--Not later than 12 months after the date of the enactment of this title, the President shall finalize regulations to carry out this title.

   Inserted: "(b) Elements.--Regulations prescribed to carry out this title--

   Inserted: "(1) shall include specific examples of the types of investments that will be considered to be covered investments;

   Inserted: "(2) shall establish a de minimis value for transactions that will not be considered to be covered investments under section 801(3)(B)(i); and

   Inserted: "(3) may include exceptions to the definition of 'national critical technology' for technologies the President determines do not pose a risk to the national security of the United States.

   Inserted: "(c) Requirements for Certain Regulations.--The President shall prescribe regulations further defining the terms used in this title, including 'covered investment' and 'covered foreign entity'.

   Inserted: "SEC. 807. AUTHORIZATION OF APPROPRIATIONS.

   Inserted: "(a) In General.--There are authorized to be appropriated such sums as may be necessary to carry out this title, including to provide outreach to industry and persons affected by this title.

   Inserted: "(b) Hiring Authority.--The Assistant Secretary of the Treasury for Investment Security 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). The primary responsibility of positions authorized under the preceding sentence shall be to administer this title.

   Inserted: "SEC. 808. EFFECTIVE DATE.

   Inserted: "The notification requirements and associated penalties provided for under this title shall take effect on the date on which all regulations have been prescribed to carry out this title in accordance with section 806.

   Inserted: "SEC. 809. EFFECT ON INVESTMENT, TRADE, AND OTHER LAWS.

   Inserted: "(a) Rules of Construction.--Nothing in this title may be construed--

   Inserted: "(1) to restrain or deter foreign investment in the United States, United States investment abroad, or trade in goods or services, if such investment and trade do not pose a risk to the national security of the United States; or

   Inserted: "(2) to alter or affect the authorities or requirements under the Export Control Reform Act of 2018 (50 U.S.C. 4801 et seq.).

   Inserted: "(b) International Emergency Economic Powers Act.--The President may not use authorities under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to establish a mechanism for reviewing, screening, or prohibiting outbound investment other than the mechanism established by this title.".

   Original wording

   At the end of subtitle D of title XII, add the following:

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As printed