S 3555 Comprehensive Outbound Investment National Security Act 2025

Summary

Enacts the Comprehensive Outbound Investment National Security Act of 2025, emphasizing prohibitions and notifications regarding investments in countries of concern, notably China.

Requires the U.S. Treasury Secretary and Commerce Secretary to regulate and possibly prohibit U.S. investments in foreign persons involved with technologies deemed harmful to national security, including artificial intelligence systems and related sectors.

Directs the President to impose sanctions on identified ‘covered foreign persons’ and requires annual reporting to Congress about such individuals and enforcement actions.

Encourages multilateral engagement with allies to develop comparable mechanisms preventing the development of technologies by countries of concern.

Defines critical terms such as ‘covered foreign person’ and ‘prohibited technology,’ identifying crucial sectors like AI that may have impacts on military, intelligence, and surveillance capabilities.

Establishes a process for creating and maintaining a public database of entities involved in prohibited technologies.

Summarizes a bill imposing sanctions and regulating investments related to national security concerns.

A BILL

To protect the national security of the United States by imposing sanctions with respect to certain persons of the People's Republic of China and prohibiting and requiring notifications with respect to certain investments by United States persons in countries of concern.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

Summarizes the Comprehensive Outbound Investment National Security Act of 2025 regarding sanctions and investment notifications.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Comprehensive Outbound Investment National Security Act of 2025''.

(b) Table of Contents.--The table of contents for this Act is as follows:

Sec. 1. Short title; Table of contents.

TITLE I--GENERAL MATTERS

Sec. 101. Secretary defined. Sec. 102. Severability. Sec. 103. Authorization of appropriations. Sec. 104. Sense of Congress. Sec. 105. Termination.

TITLE II--IMPOSITION OF SANCTIONS

Sec. 201. Imposition of sanctions. Sec. 202. Definitions. Sec. 203. Exception relating to importation of goods.

TITLE III--PROHIBITION AND NOTIFICATION ON INVESTMENTS RELATING TO COVERED NATIONAL SECURITY TRANSACTIONS

Sec. 301. Prohibition and notification on investments relating to covered national security transactions.

TITLE IV--SECURITIES AND RELATED MATTERS

Sec. 401. Requirements relating to the Non-SDN Chinese Military- Industrial Complex Companies List.

Defines "Secretary" as the Secretary of the Treasury for purposes of the Act.

TITLE I--GENERAL MATTERS

SEC. 101. SECRETARY DEFINED.

Except as otherwise provided, in this Act, the term ``Secretary'' means the Secretary of the Treasury.

SEC. 102. SEVERABILITY.

If any provision of this Act or any amendment made by this Act, or the application thereof, is held invalid, the validity of the remainder of this Act or any amendment made by this Act and the application of such provision to other persons and circumstances shall not be affected thereby.

Authorizes $150 million for the Treasury, transferable to Commerce, for outreach and administering this Act.

SEC. 103. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--There is authorized to be appropriated $150,000,000 to the Department of the Treasury, out of which amounts may be transferred to the Department of Commerce to jointly conduct outreach to industry and persons affected by this Act or any amendment made by this Act, and to administer the provisions of this Act or any amendment made by this Act, for each of the first two fiscal years beginning on or after the date of the enactment of this Act, to carry out this Act or any amendment made by this Act.

Permits the President and specific Secretaries to appoint individuals to competitive service positions bypassing usual procedures.

(b) Hiring Authority.--

(1) By the president.--The President may appoint, without regard to the provisions of sections 3309 through 3318 of title 5, United States Code, not more than 15 individuals directly to positions in the competitive service (as defined in section 2102 of that title) to carry out this Act or any amendment made by this Act.

(2) By agencies.--The Secretary and the Secretary of Commerce may appoint, without regard to the provisions of sections 3309 through 3318 of title 5, United States Code, individuals directly to positions in the competitive service (as defined in section 2102 of that title) of the Department of the Treasury and the Department of Commerce, respectively, to carry out this Act or any amendment made by this Act.

Urges the President to restrict U.S. outbound investments in dual-use technologies in countries of concern.

SEC. 104. SENSE OF CONGRESS.

It is the sense of Congress that--

(1) due to the fact that there are countless known and unknown entities in countries of concern, to include the People's Republic of China (PRC), developing dual-use strategic technologies that benefit a foreign adversary's military modernization efforts, surveillance states, and human rights abuses, restricting certain United States outbound investments into these technologies in countries of concern is necessary to prevent harm to United States national security and foreign policy interests; and

(2) the President should therefore exercise the authorities granted in this Act or any amendment made by this Act to prevent countries of concern from exploiting United States capital to undermine United States national security and foreign policy interests.

Sets the Act and its amendments to expire seven years after its enactment date.

SEC. 105. TERMINATION.

This Act and any amendment made by this Act shall cease to have any force or effect on the date that is seven years after the date of the enactment of this Act.

Authorizes the President to sanction U.S. investments in certain foreign persons under the International Emergency Economic Powers Act.

TITLE II--IMPOSITION OF SANCTIONS

SEC. 201. IMPOSITION OF SANCTIONS.

(a) In General.--The President may impose the sanctions described in subsection (b) with respect to any foreign person determined to be a covered foreign person.

(b) Sanctions Described.--The President may exercise all of the powers granted to the President under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to the extent necessary to prohibit any United States person from investing in or purchasing significant amounts of equity or debt instruments of a foreign person that is determined to be a covered foreign person pursuant to subsection (a).

Applies penalties to individuals violating prohibitions under this section as per 50 U.S.C. 1705.

(c) Penalties.--The penalties provided for in subsections (b) and (c) of section 206 of the International Emergency Economic Powers Act (50 U.S.C. 1705) shall apply to any person who violates, attempts to violate, conspires to violate, or causes a violation of any prohibition of this section, or an order or regulation prescribed under this section, to the same extent that such penalties apply to a person that commits an unlawful act described in section 206(a) of such Act (50 U.S.C. 1705(a)).

Exempts U.S. intelligence and law enforcement from sanctions; allows federal transactions for official business.

(d) Exception for Intelligence and Law Enforcement Activities.-- Sanctions under this section shall not apply with respect to--

(1) any activity subject to the reporting requirements under title V of the National Security Act of 1947 (50 U.S.C. 3091 et seq.); or

(2) any authorized intelligence activities of the United States.

(e) Exception for United States Government Activities.--Nothing in this section shall prohibit transactions for the conduct of the official business of the Federal Government by employees, grantees, or contractors thereof.

Requires the President to annually report to Congress on covered foreign persons in specified Chinese companies.

(f) Report to Congress.--

(1) In general.--Not later than one year after the date of the enactment of this Act, and annually thereafter for seven years, the President shall submit to the appropriate congressional committees a report that states whether any foreign person on the Non-SDN Chinese Military-Industrial Complex Companies List is a covered foreign person.

(2) Form.--The report required by paragraph (1) shall be submitted in unclassified form, but may include a classified annex.

Affirms the President's authority under the International Emergency Economic Powers Act to implement this section.

(g) Administrative Provisions.--The President may exercise all authorities provided under sections 203 and 205 of the International Emergency Economic Powers Act (50 U.S.C. 1702 and 1704) to carry out this section.

(h) Rule of Construction.--Nothing in this section may be construed to limit the authority of the President to designate foreign persons for the imposition of sanctions pursuant to any other provision of Federal law, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.).

Defines "appropriate congressional committees" and "country of concern" relating to U.S. legislative and foreign policy considerations.

SEC. 202. DEFINITIONS.

In this title:

(1) Appropriate congressional committees.--The term ``appropriate congressional committees'' means--

(A) the Committee on Financial Services and the Committee on Foreign Affairs of the House of Representatives; and

(B) the Committee on Banking, Housing, and Urban Affairs and the Committee on Foreign Relations of the Senate.

(2) Country of concern.--The term ``country of concern'' means the People's Republic of China, including the Hong Kong and Macau Special Administrative Regions.

Defines "covered foreign person" as those with ties to a country of concern, including leadership and government entities.

(3) Covered foreign person.--The term ``covered foreign person'' means a foreign person--

(A) that is incorporated in, has a principal place of business in, or is organized under the laws of a country of concern;

(B) that is a member of the Central Committee of the Chinese Communist Party or member of the political leadership of a country of concern;

(C) that is the state or the government of a country of concern, as well as any political subdivision, agency, or instrumentality thereof;

Defines entities under control or ownership related to defense or surveillance in countries of concern.

(D) that is subject to the direction or control of any entity described in subparagraphs (A) through (C); or

(E) that is owned in the aggregate, directly or indirectly, 50 percent or more by an entity or a group of entities described in subparagraphs (A) through (C); and

(F) that knowingly engaged in significant operations in the defense and related materiel sector or the surveillance technology sector of the economy of a country of concern.

Defines "Non-SDN Chinese Military-Industrial Complex Companies List" under Executive Orders 13959 and 14032.

(4) Foreign person.--The term ``foreign person'' means a person that is not a United States person.

(5) Knowingly.--The term ``knowingly'', with respect to conduct, a circumstance, or a result, means that a person has actual knowledge, or should have known, of the conduct, the circumstance, or the result.

(6) Non-SDN chinese military-industrial complex companies list.--The term ``Non-SDN Chinese Military-Industrial Complex Companies List'' means the list maintained by the Office of Foreign Assets Control of the Department of the Treasury under Executive Order 13959, as amended by Executive Order 14032 (50 U.S.C. 1701 note; relating to addressing the threat from securities investments that finance certain companies of the People's Republic of China), or any successor order.

Defines "United States person" as a U.S. citizen, legal resident, or entity organized under U.S. laws.

(7) Person.--The term ``person'' means an individual or entity.

(8) United states person.--The term ``United States person'' means--

(A) any United States citizen or an alien lawfully admitted for permanent residence to the United States;

(B) an entity organized under the laws of the United States or of any jurisdiction within the United States (including any foreign branch of such an entity); or

(C) any person in the United States.

Excludes importation of goods from the sanctions authorized under this Act.

SEC. 203. EXCEPTION RELATING TO IMPORTATION OF GOODS.

(a) In General.--The authorities and requirements to impose sanctions authorized under this Act shall not include the authority or requirement to impose sanctions on the importation of goods.

(b) Good Defined.--In this section, the term ``good'' means any article, natural or manmade substance, material, supply or manufactured product, including inspection and test equipment, and excluding technical data.

Prohibits U.S. persons from engaging in certain national security transactions involving prohibited technology.

TITLE III--PROHIBITION AND NOTIFICATION ON INVESTMENTS RELATING TO COVERED NATIONAL SECURITY TRANSACTIONS

SEC. 301. PROHIBITION AND NOTIFICATION ON INVESTMENTS RELATING TO COVERED NATIONAL SECURITY TRANSACTIONS.

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

``TITLE VIII--PROHIBITION AND NOTIFICATION ON INVESTMENTS RELATING TO COVERED NATIONAL SECURITY TRANSACTIONS

``SEC. 801. PROHIBITION ON INVESTMENTS.

``(a) In General.--The Secretary may prohibit, in accordance with regulations issued under subsection (e), a United States person, including its controlled foreign entities, from knowingly engaging in a covered national security transaction in any prohibited technology.

``(b) Evasion.--Any action that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate the prohibition set forth in subsection (a) is prohibited.

Authorizes the Secretary to exempt activities from prohibition if deemed in the national interest.

``(c) Exemptions.--

``(1) National interest exemption.--Subject to subsection (d), the Secretary is authorized to exempt from the prohibition set forth in subsection (a) any activity determined by the President, in consultation with the Secretary, or delegated to the Secretary, in coordination with the Secretary of Commerce, the Secretary of State, and, as appropriate, the heads of other relevant Federal departments and agencies, to be in the national interest of the United States.

``(2) Intelligence exemption.--Regulations issued under subsection (e) shall not apply to any authorized intelligence activities of the United States.

Requires the Secretary, in consultation with relevant officials, to update regulations concerning the Outbound Investment Rule.

``(d) Congressional Notification.--The Secretary shall--

``(1) notify the appropriate congressional committees not later than five business days after issuing an exemption under subsection (c); and

``(2) include in such notification an identification of the national interest justifying the use of the exemption, subject to appropriate confidentiality and classification requirements. ``(e) Regulations.--

``(1) In general.--The Secretary, in consultation with the Secretary of Commerce, the Secretary of State and, as appropriate, the heads of other relevant Federal departments and agencies, may issue or update existing regulations to carry out this section subject to public notice and comment in accordance with subchapter II of chapter 5 and chapter 7 of title 5, United States Code, and not subject to the requirements of section 709. The regulations issued pursuant to this paragraph shall, as necessary, amend, terminate, supersede, revoke, or streamline existing requirements in part 850 of title 31, Code of Federal Regulations (the Outbound Investment Rule) and shall provide a reasonable timeframe for compliance.

Requires regulations to provide a process for confidential non-binding feedback on prohibited technology transactions.

``(2) Non-binding feedback.--

``(A) In general.--The regulations issued under paragraph (1) shall include a process under which a person can request to receive non-binding feedback on a confidential basis, or as anonymized guidance to the public, as to whether a transaction would constitute a covered national security transaction in a prohibited technology.

``(B) Authority to limit frivolous feedback requests.--In establishing the process required by subparagraph (A), the Secretary may prescribe limitations on requests for feedback identified as frivolous for purposes of this subsection.

Requires regulations to consider self-disclosure when determining consequences for violations of subsection (a).

``(3) Notice; opportunity to cure.--

``(A) In general.--The regulations issued under paragraph (1) shall account for whether a United States person has self-identified and self-disclosed a violation of the prohibition set forth in subsection (a) in determining the legal consequences of that violation.

``(B) Self-disclosure letters.--The regulations issued under paragraph (1) shall dictate the form and content of a letter of self-disclosure, which shall include relevant facts about the violation, why the United States person believes its activity to have violated the prohibition set forth in subsection (a), and a proposal for mitigation of the harm of such action.

Requires the Secretary to issue regulations balancing national security with minimized compliance costs and stakeholder involvement.

``(4) Low-burden regulations.--In issuing regulations under paragraph (1), the Secretary should balance the priority of protecting the national security interest of the United States while, to the extent practicable--

``(A) minimizing the cost and complexity of compliance for affected parties, including the duplication of reporting requirements under current regulations;

``(B) adopting the least burdensome alternative that achieves regulatory objectives; and

``(C) prioritizing transparency and stakeholder involvement in the process of issuing the rules. ``(5) Burden of proof.--In accordance with section 556(d) of title 5, United States Code, in an enforcement action for a violation of the prohibition set forth in subsection (a), the burden of proof shall be upon the Secretary.

Requires U.S. persons to notify the Secretary of engaging in prohibited or notifiable technology transactions.

``SEC. 802. NOTIFICATION ON INVESTMENTS.

``(a) Mandatory Notification.--Not later than 450 days after the date of the enactment of this title, the Secretary shall issue regulations prescribed in accordance with subsection (b), to require a United States person that itself or whose controlled foreign entity knowingly engages in a covered national security transaction in a prohibited technology (unless the Secretary has exercised the authority provided by section 801(a) to prohibit knowingly engaging in such covered national security transaction) or a notifiable technology to submit to the Secretary a written notification of the transaction not later than 30 days after the completion date of the transaction.

Requires the Secretary, with other officials, to issue regulations affecting AI-related outbound investment rules within 450 days.

``(b) Regulations.--

``(1) In general.--Not later than 450 days after the date of the enactment of this title, the Secretary, in consultation with the Secretary of Commerce, the Secretary of State, and, as appropriate, the heads of other relevant Federal departments and agencies, shall issue regulations to carry out this section subject to public notice and comment in accordance with subchapter II of chapter 5 and chapter 7 of title 5, United States Code, and not subject to the requirements of section 709. The regulations issued pursuant to this paragraph shall as necessary, amend, terminate, supersede, revoke, or streamline existing requirements in part 850 of title 31, Code of Federal Regulations (the Outbound Investment Rule) and shall provide a reasonable timeframe for compliance.

Instructs the Secretary to minimize regulatory burdens, costs, and complexity while ensuring transparency and stakeholder involvement.

``(2) Low-burden regulations.--In issuing regulations under paragraph (1), the Secretary should balance the priority of protecting the national security interest of the United States while, to the extent practicable--

``(A) minimizing the cost and complexity of compliance for affected parties, including the duplication of reporting requirements under current regulation;

``(B) adopting the least burdensome alternative that achieves regulatory objectives; and

``(C) prioritizing transparency and stakeholder involvement in the process of issuing the rules.

Requires the Secretary to inspect notifications for completeness and inform submitters of incomplete notifications.

``(3) Burden of proof.--In accordance with section 556(d) of title 5, United States Code, in an enforcement action for a violation of the prohibition set forth in subsection (a), the burden of proof shall be upon the Secretary.

``(4) Completeness of notification.--

``(A) In general.--The Secretary shall, upon receipt of a notification under subsection (a), promptly inspect the notification for completeness.

``(B) Incomplete notifications.--If a notification submitted under subsection (a) is incomplete, the Secretary shall promptly inform the United States person that submits the notification that the notification is not complete and provide an explanation of relevant material respects in which the notification is not complete.

Requires the Secretary to identify unnotified transactions involving prohibited or notifiable technologies.

``(5) Identification of non-notified activity.--The Secretary shall establish a process to identify covered national security transactions in a prohibited technology or a notifiable technology for which--

``(A) a notification is not submitted to the Secretary under subsection (a); and

``(B) information is reasonably available. ``(c) Inapplicability.--If the Secretary prohibits a covered national security transaction in a prohibited technology under section 801, the requirements of this section shall not apply with respect to the covered national security transaction.

Requires the Secretary to report on enforcement actions involving prohibited or notifiable technology annually.

``SEC. 803. REPORT.

``(a) In General.--Not later than 18 months after the date of enactment of this title, and not less frequently than annually thereafter, the Secretary, in consultation with the Secretary of Commerce and, as appropriate, the heads of other relevant Federal departments and agencies, shall submit to the appropriate congressional committees a report, subject to appropriate confidentiality and classification requirements, that--

``(1) lists all enforcement actions taken subject to the existing regulations and regulations issued under section 801(e) and 802(b) during the year preceding submission of the report, which includes, with respect to each such action, a description of--

``(A) the prohibited technology or notifiable technology;

``(B) the covered national security transaction;

``(C) the covered foreign person; and

``(D) the relevant United States person;

Assesses and identifies technologies posing national security threats with input from several federal departments.

``(2) provides an assessment of the definition of the term `prohibited technology' under existing regulations or regulations issued under section 801(e) or 802(b) by--

``(A) identifying additional technologies that the Secretary, in consultation with the Secretary of Commerce and, as applicable, the Secretary of Defense, the Secretary of State, the Secretary of Energy, the Director of National Intelligence, and the heads of any other relevant Federal agencies, determined under existing regulations or regulations issued pursuant to 801(e) may pose an acute threat to the national security of the United States if developed or acquired by a country of concern;

Requires explanation of technologies posing national security threats and descriptions of removed prohibited technologies.

``(B) explaining why each technology identified in subparagraph (A) may pose an acute threat to the national security of the United States if developed or acquired by a country of concern; and

``(C) describing any removal of technologies from the category of prohibited technology under existing regulations or regulations issued under section 801(e) during the reporting period to the extent that the technologies no longer pose an acute threat to the national security of the United States if developed or acquired by a country of concern;

Requires listing notifications of covered national security transactions, including parties and transaction nature, annually.

``(3) lists all notifications submitted under existing regulations or regulations issued section 802 during the year preceding submission of the report and includes, with respect to each such notification--

``(A) basic information on each party to the covered national security transaction with respect to which the notification was submitted; and

``(B) the nature of the covered national security transaction that was the subject of the notification, including the elements of the covered national security transaction that necessitated a notification;

Includes a disaggregated summary of notifications related to prohibited technology and national security transactions.

``(4) includes a summary of those notifications, disaggregated by prohibited technology, by notifiable technology, by covered national security transaction, and by country of concern;

``(5) provides additional context and information regarding trends in the prohibited technology, notifiable technology, the types of covered national security transaction, and the countries involved in those notifications; and

Assesses impacts of notifications, recommending Federal program expansion for producing or supplying specific technologies in the U.S.

``(6) assesses the overall impact of those notifications, including recommendations for--

``(A) expanding existing Federal programs to support the production or supply of prohibited technologies or notifiable technologies in the United States, including the potential of existing authorities to address any related national security concerns;

``(B) investments needed to enhance prohibited technologies or notifiable technologies and reduce United States dependence on countries of concern regarding those technologies; and

``(C) the continuation, expansion, or modification of the implementation and administration of this title.

Requires the Secretary to consider congressional, international, and relevant information when preparing the report.

``(b) Consideration of Certain Information.--In preparing the report pursuant to subsection (a), the Secretary--

``(1) shall consider information provided jointly by the chairperson and ranking member of any of the appropriate congressional committees;

``(2) may consider credible information obtained by other countries and nongovernmental organizations that monitor the military, surveillance, intelligence, or technology capabilities of a country of concern; and

``(3) may consider any other information that the Secretary deems relevant.

Requires the Secretary and Commerce Secretary to testify annually on national security threats from international investments.

``(c) Form of Report.--Each report required by this section shall be submitted in unclassified form, but may include a classified annex.

``(d) Testimony Required.--Not later than one year after the date of the enactment of this title, and annually thereafter for five years, the Secretary and the Secretary of Commerce, or their designee, shall each provide to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committees on Foreign Affairs and Financial Services of the House of Representatives testimony with respect to the national security threats relating to investments by United States persons in countries of concern and broader international capital flows.

Requires the Secretary to assess if a requested technology poses an acute national security threat.

``(e) Requests by Appropriate Congressional Committees.--

``(1) In general.--After receiving a request that meets the requirements of paragraph (2) with respect to whether a technology should be included in the amendments as described in subsection (a)(2), the Secretary shall, in preparing the report pursuant to subsection (a)--

``(A) determine if that technology may pose an acute threat to the national security of the United States if developed or acquired by a country of concern; and

Requires reporting explanations on whether technology poses an acute national security threat and potential recommendations.

``(B) include in the report pursuant to subsection (a) an explanation with respect to that determination that includes--

``(i) a statement of whether or not the technology, as determined by the Secretary, may pose an acute threat to the national security of the United States if developed or acquired by a country of concern; and

``(ii) if the Secretary determines that--

``(I) the technology may pose an acute threat to the national security of the United States if developed or acquired by a country of concern, an explanation for such determination and a recommendation whether that technology should be named a prohibited technology or a notifiable technology; and

``(II) the technology would not pose an acute threat to the national security of the United States if developed or acquired by a country of concern, an explanation for such determination.

Requires the chairperson and ranking member of congressional committees to jointly submit written national security threat requests.

``(2) Requirements.--A request under paragraph (1) with respect to whether a technology may pose an acute threat to the national security of the United States if developed or acquired by a country of concern shall be submitted to the Secretary in writing jointly by the chairperson and ranking member of 1 or more of the appropriate congressional committees.

Encourages coordination with allies to develop protocols preventing prohibited technology development, sharing information.

``SEC. 804. MULTILATERAL ENGAGEMENT AND COORDINATION.

``(a) Authorities.--The Secretary, in coordination with the Secretary of State, the Secretary of Commerce, and the heads of other relevant Federal agencies, should--

``(1) conduct bilateral and multilateral engagement with the governments of countries that are allies and partners of the United States to promote and increase coordination of protocols and procedures to facilitate the effective implementation of and appropriate compliance with the prohibitions and notification requirement pursuant to this title;

``(2) upon adoption of protocols and procedures described in paragraph (1), work with those governments to establish mechanisms for sharing information, including trends, with respect to such activities; and

``(3) work with and encourage the governments of countries that are allies and partners of the United States to develop similar mechanisms of their own, for the exclusive purpose of preventing the development of prohibited technologies by a country of concern.

Requires the Secretary to develop a strategy for multilateral AI governance and provide technical assistance.

``(b) Strategy for Multilateral Engagement and Coordination.--Not later than 180 days after the date of the regulations implementing enactment of this title, the Secretary, in coordination with the Secretary of State, the Secretary of Commerce, and the heads of other relevant Federal agencies, should--

``(1) develop a strategy to work with the governments of countries that are allies and partners of the United States to develop mechanisms that are comparable to the prohibitions and notification requirements pursuant to this title, for the exclusive purpose of preventing the development of prohibited technologies by a country of concern; and

``(2) assess opportunities to provide technical assistance to those countries with respect to the development of those mechanisms.

Requires the Secretary to report to Congress on AI strategy and international cooperation annually for four years.

``(c) Report.--Not later than one year after the date of the regulations implementing enactment of this title, and annually thereafter for four years, the Secretary shall submit to the appropriate congressional committees a report, subject to the appropriate confidentiality and classification requirements, that includes--

``(1) a discussion of any strategy developed pursuant to subsection (b)(1), including key tools and objectives for the development of comparable mechanisms by the governments of allies and partners of the United States;

``(2) a list of partner and allied countries to target for cooperation in developing their own prohibitions;

``(3) the status of the strategy's implementation and outcomes; and

``(4) a description of impediments to the establishment of comparable mechanisms by governments of allies and partners of the United States.

Defines 'appropriate congressional committees' as specified Senate and House committees related to foreign relations and finance.

``(d) Appropriate Congressional Committees Defined.--In this section, the term `appropriate congressional committees' means--

``(1) the Committee on Foreign Relations and the Committee on Banking, Housing, and Urban Affairs of the Senate; and

``(2) the Committee on Foreign Affairs and the Committee on Financial Services of the House of Representatives.

Allows the Secretary to create and modify a public database of covered foreign persons in technology.

``SEC. 805. PUBLIC DATABASE OF COVERED FOREIGN PERSONS.

``(a) In General.--The Secretary, in consultation with the Secretary of Commerce, may establish a publicly accessible, non- exhaustive database that identifies covered foreign persons that are either engaged in a prohibited technology or a notifiable technology pursuant to this title.

``(b) Modification Process.--The Secretary, in consultation with the Secretary of Commerce, is authorized to establish a mechanism for a covered foreign person to petition for their removal from or inclusion in the publicly accessible, non-exhaustive database described in (a).

Requires the Secretary to establish a confidential mechanism for public submission of evidence on foreign persons.

``(c) Confidentiality of Evidence.--The Secretary shall establish a mechanism for the public, including Congress, stakeholders, investors, and nongovernmental organizations, to submit evidence on a confidential basis regarding whether a foreign person is a covered foreign person in a prohibited technology or notifiable technology and should be included in the database described in subsection (a), if any.

``(d) Rule of Construction.--The database described in subsection (a), if any, shall not be considered to be an exhaustive or comprehensive list of covered foreign persons for the purposes of this title.

Clarifies that the title does not limit Presidential authority under Federal law or the Constitution.

``SEC. 806. RULE OF CONSTRUCTION.

``Nothing in this title may be construed to negate the authority of the President under any authority, process, regulation, investigation, enforcement measure, or review provided by or established under any other provision of Federal law, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), or any other authority of the President or the Congress under the Constitution of the United States.

Authorizes the Secretary to impose civil penalties for violations of AI-related orders or regulations.

``SEC. 807. PENALTIES.

``(a) In General.--The regulations issued under section 801 or 802 shall provide for the imposition of civil penalties described in subsection (b).

``(b) Penalties Described.--

``(1) Unlawful acts.--It shall be unlawful for a person to violate, attempt to violate, conspire to violate, or cause a violation of any order, regulation, notification requirement, or prohibition issued under this title.

``(2) Civil penalty.--The Secretary may impose civil penalties on any person who commits an unlawful act described in paragraph (1) in amounts equivalent to amounts provided for under section 206(b) of the International Emergency Economic Powers Act (50 U.S.C. 1705(b)) for violations under that Act.

Authorizes the Secretary to compel divestment of certain national security transactions involving prohibited technology.

``(3) Divestment.--The Secretary may compel the divestment of a covered national security transaction in a prohibited technology determined to be in violation of section 801(a) or regulations issued thereunder.

``(4) Relief.--The President may direct the Attorney General of the United States to seek appropriate relief, including divestment relief for violations of the prohibition set forth in subsection 801(a), in the district courts of the United States, in order to implement and enforce this title.

Exempts information filed with the Secretary from disclosure under section 552(b)(3) of title 5, U.S. Code.

``SEC. 808. EXEMPTION FROM DISCLOSURE.

``(a) In General.--Except as provided in subsection (b), any information or documentary material filed with the Secretary or the Secretary's designee pursuant to this title shall be exempt from disclosure under section 552(b)(3) of title 5, United States Code, and no such information or documentary material may be made public.

Allows disclosure of certain information for legal actions, congressional purposes, or national security with restrictions.

``(b) Exceptions.--Subsection (a) shall not prohibit the disclosure of the following, subject to appropriate confidentiality and classification requirements:

``(1) Information relevant to any administrative or judicial action or proceeding.

``(2) Information to Congress or any duly authorized committee or subcommittee of Congress.

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

Allows disclosure of information for national security, including anonymized data, by the Secretary or designee.

``(4) Identity of a covered foreign person in the public database described in section 805.

``(5) Information that the parties have consented to be disclosed to third parties.

``(6) Information gathered by the Secretary or the Secretary's designee where the disclosure is determined to be in the national security interest, which may include publication of anonymized data.

Defines "appropriate congressional committees" as specific committees in the House and Senate, except in section 804(d).

``SEC. 809. DEFINITIONS.

``In this title:

``(1) Appropriate congressional committees.--Except as provided in section 804(d), the term `appropriate congressional committees' means--

``(A) the Committee on Financial Services, the Committee on Foreign Affairs, and the Committee on Appropriations of the House of Representatives; and

``(B) the Committee on Banking, Housing, and Urban Affairs and the Committee on Appropriations of the Senate.

Defines 'country of concern' as China, Cuba, Iran, North Korea, Russia, and Venezuela under Maduro.

``(2) Country of concern.--The term `country of concern' means--

``(A) the People's Republic of China, including the Hong Kong and Macau Special Administrative Regions;

``(B) the Republic of Cuba;

``(C) the Islamic Republic of Iran;

``(D) the Democratic People's Republic of Korea;

``(E) the Russian Federation; and

``(F) the Bolivarian Republic of Venezuela under the regime of Nicolas Maduro Moros.

Defines "covered foreign person" as a foreign entity linked to countries of concern or specific political affiliations.

``(3) Covered foreign person.--Subject to regulations prescribed in accordance with this title, the term `covered foreign person' means a foreign person that--

``(A) is incorporated in, has a principal place of business in, or is organized under the laws of a country of concern;

``(B) is a member of the Central Committee of the Chinese Communist Party or is a member of the political leadership of a country of concern;

Defines entities influenced or owned 50%+ by concerned countries or specified entities as regulated.

``(C) is subject to the direction or control of a country of concern, as defined by regulation, an entity described in subparagraph (A) or (B), or the state or the government of a country of concern (including any political subdivision, agency, or instrumentality thereof); or

``(D) is owned in the aggregate, directly or indirectly, 50 percent or more by a country of concern, an entity described in subparagraph (A) or (B), or the state or the government of a country of concern (including any political subdivision, agency, or instrumentality thereof).

Defines a "covered national security transaction" as a U.S. person's acquisition of interest in a covered foreign person.

``(4) Covered national security transaction.--

``(A) In general.--Subject to such regulations as may be issued in accordance with this title, the term `covered national security transaction' means a United States person's direct or indirect--

``(i) acquisition of an equity interest or contingent equity interest in a covered foreign person that the United States person knows at the time of the acquisition is a covered foreign person;

Prohibits loans granting equity-like financial or governance rights to covered foreign persons.

``(ii) provision of a loan or similar debt financing arrangement to a covered foreign person that the United States person knows at the time of the provision is a covered foreign person, where such debt financing affords or will afford the United States person an interest in profits of the covered foreign person, the right to appoint members of the board of directors (or equivalent) of the covered foreign person, or other comparable financial or governance rights characteristic of an equity investment but not typical of a loan;

Requires U.S. persons to avoid joint ventures engaging in prohibited or notifiable technology with concerning countries.

``(iii) entrance by such United States person into a joint venture, wherever located, that is formed with a person of a country of concern, and that the subject United States person knows at the time of entrance into the joint venture that the joint venture will engage, or plans to engage, in a prohibited technology or notifiable technology;

``(iv) conversion of a contingent equity interest (or interest equivalent to a contingent equity interest) or conversion of debt to an equity interest in a covered foreign person;

Prohibits U.S. persons from developing assets or directing transactions involving countries or persons of concern.

``(v) acquisition, leasing, or other development of operations, land, property, or other assets in a country of concern that the United States person knows at the time of such acquisition, leasing, or other development will result in, or that the United States person plans to result in--

``(I) the establishment of a covered foreign person; or

``(II) the engagement of a person of a country of concern in a prohibited technology or notifiable technology;

``(vi) knowingly directing prohibited transactions or notifiable transactions by foreign persons that the United States person has knowledge at the time of the transaction would constitute an activity described in clause (i), (ii), (iii), (iv), or (v), if engaged in by a United States person;

Restricts U.S. investments in foreign funds likely to contribute to adversarial military or intelligence capabilities.

``(vii) acquisition of a limited partner or equivalent interest in a venture capital fund, private equity fund, fund of funds, or other pooled investment fund (in each case where the fund is not a United States person) that the United States person has knowledge at the time of the acquisition likely will invest in a person of a country of concern that is in one of the notifiable technology or prohibited technology sectors, and such fund undertakes a transaction that would be a covered national security transaction if undertaken by a United States person; or

``(viii) any other transaction identified by the Secretary, in consultation with the appropriate congressional committees and subject to public notice and comment in accordance with subchapter II of chapter 5 and chapter 7 of title 5, United States Code, and not subject to the requirements of section 709, that is contributing to the military, intelligence, surveillance, or cyber-enabled capabilities of a country of concern.

Excludes de minimis value transactions and those in the U.S. national interest from 'covered national security transaction'.

``(B) Exceptions and clarifications.--Subject to regulations prescribed in accordance with this title, the term `covered national security transaction' does not include--

``(i) any transaction the value of which the Secretary determines is de minimis;

``(ii) any category of transactions that the Secretary determines is in the national interest of the United States;

Summarizes investment types exempted from covered national security transactions under specified conditions and oversight.

``(iii) an investment--

``(I) in a security (as defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))) that is traded on an exchange or the over-the- counter market in any jurisdiction;

``(II) in a security issued by an investment company (as defined in section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a-3)) that is registered with the Securities and Exchange Commission, or, if the Secretary chooses to include it as an exception from a covered national security transaction, in a security issued by a non-United States investment company that is registered with a foreign regulator with comparable oversight standards and regulatory jurisdiction to the Securities and Exchange Commission as determined by the Secretary of Treasury;

Summarizes conditions under which limited partners' investments in funds won't engage in national security transactions.

``(III) made as a limited partner or equivalent in a venture capital fund, private equity fund, fund of funds, or other pooled investment fund (other than as described in subclause (II)) where--

``(aa) the limited partner or equivalent's committed capital is not more than a de minimis amount, as determined by the Secretary, aggregated across any investment and co- investment vehicles of the fund; or

``(bb) the limited partner or equivalent has secured a binding contractual assurance that its capital in the fund will not be used to engage in a transaction that would be a covered national security transaction if engaged in by a United States person; or

Summarizes financial transactions involving derivatives, financial institutions, and acquisitions by U.S. persons in specific circumstances.

``(IV) in a derivative of a security described under subclause (I), (II), or (III);

``(iv) any ancillary transaction undertaken by a financial institution (as defined in section 5312 of title 31, United States Code);

``(v) the acquisition by a United States person of the equity or other interest owned or held by a covered foreign person in an entity or assets located outside of a country of concern in which the United States person is acquiring the totality of the interest in the entity held by the covered foreign person;

Defines exceptions for intracompany fund transfers to subsidiaries in countries of concern under national security regulations.

`(vi) an intracompany transfer of funds, as defined in regulations prescribed in accordance with this title, from a United States parent company to a subsidiary located in a country of concern or a transaction that, but for this clause, would be a covered national security transaction between a United States person and its controlled foreign person that supports operations that are not covered national security transactions or that maintains covered national security transactions that the controlled foreign person was engaged in prior to the effective date of the regulations implementing this title;

Excludes technology transfer and technical knowledge transfer from transactions secondary to covered national security transactions.

``(vii) a transaction secondary to a covered national security transaction, including--

``(I) contractual arrangements (not including contractual arrangements for technology transfer or technical knowledge transfer) or the procurement of material inputs for any covered national security transaction (such as raw materials);

``(II) bank lending;

``(III) the processing, clearing, or sending of payments by a bank;

Summarizes types of financial services and transactions in relation to underwriting, debt rating, and equity analysis.

``(IV) underwriting services including, but not limited to, the temporary acquisition of an equity interest for the sole purpose of facilitating underwriting services;

``(V) debt rating services;

``(VI) prime brokerage;

``(VII) global custody;

``(VIII) equity research or analysis; or

``(IX) other similar services;

``(viii) any ordinary or administrative business transaction as may be defined in such regulations; or

``(ix) any transaction completed before the date of the enactment of this title.

Defines 'ancillary transaction' as processing payments, underwriting services, credit ratings, and related financial services.

``(C) Ancillary transaction defined.--In this paragraph, the term `ancillary transaction' means, subject to regulations prescribed by the Secretary--

``(i) the processing, settling, clearing, or sending of payments and cash transactions;

``(ii) underwriting services, including the temporary acquisition of an equity interest for the sole purpose of facilitating underwriting services;

``(iii) credit rating services; and

``(iv) other services ordinarily incident to and part of the provision of financial services, such as opening deposit accounts, direct custody services, foreign exchange services, remittances services, and safe deposit services.

Defines "knowledge" as actual, probable awareness of a fact or foreseeable circumstance in regulations.

``(5) Foreign person.--The term `foreign person' has the meaning given that term in regulations prescribed in accordance with this title.

``(6) Knowledge; know.--The terms `knowledge' or `know' mean--

``(A) actual knowledge that a fact or circumstance exists or is substantially certain to occur;

``(B) an awareness of a high probability of a fact or circumstance's existence or future occurrence; or

``(C) reason to know of a fact or circumstance's existence.

Defines 'notifiable technology' to include artificial intelligence systems and other advanced technologies.

``(7) Notifiable technology.--

``(A) In general.--Subject to the regulations prescribed in accordance with this title, the term `notifiable technology' means a technology within the following areas not already captured by the technical thresholds specified by any regulations issued in accordance with section 801:

``(i) Semiconductor technology and microelectronics.

``(ii) Artificial intelligence systems.

``(iii) Quantum information technologies.

``(iv) High-performance computing and supercomputing.

``(v) Hypersonic systems.

Allows the Secretary to update regulations defining AI technologies' technical parameters for national security purposes.

``(B) Updates.--The Secretary, in consultation with the appropriate congressional committees and subject to notice and comment in accordance with subchapter II of chapter 5 and chapter 7 of title 5, United States Code, and not subject to the requirements of section 709, may prescribe regulations in accordance with this title to-- ``(i) define the technical parameters of technologies described in subparagraph (A), as reasonably needed for national security purposes; or

``(ii) to add and define categories to the list in subparagraph (A) that enable the military, intelligence, surveillance, or cyber- enabled capabilities of a country of concern.

Defines "party" and "person" in the context of a covered national security transaction.

``(8) Party.--The term `party', with respect to a covered national security transaction, has the meaning given that term in regulations prescribed in accordance with this title.

``(9) Person.--The term `person' includes an individual, corporation, partnership, association, or any other organized group of persons, or legal successor or representative thereof, or any State or local government or agency thereof.

Defines 'prohibited technology' to include AI systems and other advanced technologies as specified by regulations.

``(10) Prohibited technology.--

``(A) In general.--Subject to the regulations prescribed in accordance with this title, the term `prohibited technology' means a technology within the following areas, as specified by the regulations:

``(i) Advanced semiconductor technology and microelectronics.

``(ii) Artificial intelligence systems.

``(iii) Quantum information technologies.

``(iv) High-performance computing and supercomputing.

``(v) Hypersonic systems.

Allows the Secretary to define and update technical parameters of technologies for national security purposes.

``(B) Updates.--The Secretary, in consultation with the appropriate congressional committees and subject to notice and comment in accordance with subchapter II of chapter 5 and chapter 7 of title 5, United States Code, and not subject to the requirements of section 709, may prescribe regulations in accordance with this title to-- ``(i) define the technical parameters of technologies described in subparagraph (A), as reasonably needed for national security purposes; or

``(ii) to add and define categories to the list in subparagraph (A) that enable the military, intelligence, surveillance, or cyber- enabled capabilities of a country of concern.

Defines 'United States person' as a citizen, lawful resident, or an entity under U.S. laws.

``(11) Secretary.--Except as otherwise provided, the term `Secretary' means the Secretary of the Treasury.

``(12) United states person.--The term `United States person' means--

``(A) any United States citizen or an alien lawfully admitted for permanent residence to the United States;

``(B) an entity organized under the laws of the United States or of any jurisdiction within the United States (including any foreign branch of such an entity); or

``(C) any person in the United States.''.

Requires the President to biennially report on foreign persons qualifying for the Non-SDN Chinese Military-Industrial Complex Companies List.

TITLE IV--SECURITIES AND RELATED MATTERS

SEC. 401. REQUIREMENTS RELATING TO THE NON-SDN CHINESE MILITARY- INDUSTRIAL COMPLEX COMPANIES LIST.

(a) Report.--

(1) In general.--Not later than two years after the date of the enactment of this Act, and biennially thereafter for six years, the President shall submit to the appropriate congressional committees a report that states whether any of the following foreign persons qualifies for inclusion on the Non-SDN Chinese Military-Industrial Complex Companies List:

(A) Any PRC person listed on the Military End-User List (Supplement No. 7 to part 744 of the Export Administration Regulations).

(B) Any PRC person listed pursuant to section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (10 U.S.C. 113 note).

Lists PRC persons on specified U.S. government lists for export, communications, and forced labor concerns.

(C) Any PRC person listed on the Department of Commerce's Entity List (Supplement No. 4 to part 744 of the Export Administration Regulations).

(D) Any PRC person listed on the Federal Communications Commission's Covered List pursuant to the Secure and Trusted Communications Networks Act of 2019 (47 U.S.C. 1601).

(E) Any PRC person listed on the Uyghur Forced Labor Prevention Act Entity List pursuant to the Act entitled ``An Act to ensure that goods made with forced labor in the Xinjiang Uyghur Autonomous Region of the People's Republic of China do not enter the United States market, and for other purposes'', approved December 23, 2021 (Public Law 117-78; 22 U.S.C. 6901 note) (commonly referred to as the ``Uyghur Forced Labor Prevention Act'').

Requires the President to establish an information-sharing process among Federal agencies for report preparation.

(2) Process required.--To prepare the reports required by paragraph (1), the President shall establish a process under which the Federal agencies responsible for administering the lists described in subparagraphs (A), (B), and (C) of paragraph (1) shall share with each other all relevant information that led to the identification of the entities described in such lists.

(3) Risk-based prioritization framework.--In making the initial determinations under paragraph (1), the Secretary may establish a risk-based prioritization framework factoring in prioritization of entity review submitted to the Secretary by the Federal agencies administering the lists described in subparagraphs (A), (B), and (C) of paragraph (1).

Requires the Secretary to include criteria for listing on specific military-industrial lists in annual reports.

(4) Annual reports to the appropriate congressional committees.--The report under paragraph (1) may summarize findings concerning entities previously reviewed pursuant to this section that do not necessitate additional review by the Secretary.

(5) Matters to be included.--The Secretary shall include in the report required by paragraph (1) an overview of the criteria required for listing on the Non-SDN Chinese Military- Industrial Complex Companies List. The heads of the Federal agencies administering the lists described in subparagraphs (A), (B), and (C) of paragraph (1) shall provide to the Secretary for use in the report an overview of the criteria for entity identification or listing on each respective list.

Defines 'appropriate congressional committees' for financial services and foreign affairs in the House and Senate.

(b) Definitions.--In this section:

(1) Appropriate congressional committees.--The term ``appropriate congressional committees'' means--

(A) the Committee on Financial Services and the Committee on Foreign Affairs of the House of Representatives; and

(B) the Committee on Banking, Housing, and Urban Affairs of the Senate.

Defines "country of concern" as China, Hong Kong, Macau, and details the Non-SDN Chinese Military-Industrial Complex Companies List.

(2) Country of concern.--The term ``country of concern''--

(A) means the People's Republic of China; and

(B) includes the Hong Kong Special Administrative Region and the Macau Special Administrative Region.

(3) Non-SDN chinese military-industrial complex companies list.--The term ``Non-SDN Chinese Military-Industrial Complex Companies List'' means the list maintained by the Office of Foreign Assets Control of the Department of the Treasury under Executive Order 13959, as amended by Executive Order 14032 (50 U.S.C. 1701 note; relating to addressing the threat from securities investments that finance certain companies of the People's Republic of China), and any successor order.

Defines "PRC person" as entities associated with countries of concern, including Chinese Communist Party members.

(4) PRC person.--The term ``PRC person'' means a foreign person that--

(A) is incorporated in a principal place of business in, or is organized under the laws of, a country of concern;

(B) is a member of the Central Committee of the Chinese Communist Party;

(C) is the state or the government of a country of concern, as well as any political subdivision, agency, or instrumentality thereof; or

(D) is owned in the aggregate, directly or indirectly, 50 percent or more by an entity or a group of entities described in subparagraph (A), (B), or (C).