Chinese Military and Surveillance Company Sanctions Act of 2021
This bill requires the President to impose property-blocking sanctions on Communist Chinese military companies upon certain findings.
Specifically, if the President determines that imposing sanctions on a foreign person would address certain threats related to the financing of Chinese Communist military companies, the President must impose sanctions on that person provided that the person is identified (1) as a Communist Chinese military company in a specified report to Congress or in a November 17, 2020, executive order, or (2) by the Department of the Treasury as having engaged in transactions in the publicly traded securities (or derivatives) of a Communist Chinese military company.
To impose sanctions with respect to Communist Chinese military and 
                        surveillance companies.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Chinese Military and Surveillance 
Company Sanctions Act of 2021''.

SEC. 2. FINDINGS AND SENSE OF CONGRESS.

    (a) Findings.--Congress finds the following:
            (1) Under Executive Order 13959 (85 Fed. Reg. 73185; 
        relating to addressing the threat from securities investments 
        that finance Communist Chinese military companies) of November 
        17, 2020, the President found that the People's Republic of 
        China ``increases the size of the country's military-industrial 
        complex by compelling civilian Chinese companies to support its 
        military and intelligence activities. Those companies, though 
        remaining ostensibly private and civilian, directly support the 
        PRC's military, intelligence, and security apparatuses and aid 
        in their development and modernization.''. The President 
        further determined that ``the PRC exploits United States 
        investors to finance the development and modernization of its 
        military.''. As a result, Executive Order 13959 restricted 
        transactions in publicly traded securities of Communist Chinese 
        military companies listed pursuant to section 1237 of the Strom 
        Thurmond National Defense Authorization Act for Fiscal Year 
        1999 (50 U.S.C. 1701 note).
            (2) Although Executive Order 13959 targets transactions in 
        public securities, it does not address financing options for 
        Communist Chinese military companies through other forms of 
        equity financing or debt financing, nor does it limit 
        transactions with United States persons that may generate 
        earnings in a manner that facilitates company growth.
            (3) Transaction restrictions pursuant to Executive Order 
        13959 have not withstood challenges in court. On March 12, 
        2021, the United States District Court for the District of 
        Columbia granted a preliminary injunction preventing the 
        application of Executive Order 13959 to Xiaomi Corporation, 
        which the Department of Defense had listed as a Communist 
        Chinese military company, based on the ``high likelihood of 
        success on the merits'' that the listing did not conform to the 
        Administrative Procedures Act and exceeded the authority 
        granted under section 1237 of the Strom Thurmond National 
        Defense Authorization Act for Fiscal Year 1999. The Department 
        of Defense chose not to challenge the ruling and removed the 
        company from its listing.
            (4) On May 5, 2021, the District Court further enjoined the 
        implementation of Executive Order 13959 with respect to Luokung 
        Technology Corp., which the Department of Defense had 
        originally sought to list on January 14, 2021, and re-listed on 
        March 9, 2021. Consequently, the prohibitions of Executive 
        Order 13959 could not be applied to the company.
            (5) The Office of Foreign Assets Control (OFAC) of the 
        Department of the Treasury, by imposing asset blocking through 
        the Specially Designated Nationals (SDN) List, is able to 
        forbid virtually any transaction between United States persons 
        and a designated entity, including debt and equity financing, 
        the exchange of goods and services, and the provision of 
        material or technological support. Conversely, restrictions 
        limited to publicly traded securities are less comprehensive, 
        and in the case of certain Chinese companies of concern, may be 
        irrelevant if the companies do not issue such securities.
            (6) While restrictions on public securities are restricted 
        to the dealings of United States persons, OFAC's inclusion of a 
        foreign entity on the SDN list deters third-country persons 
        from dealing with a designated entity, amplifying the effects 
        of United States sanctions globally.
            (7) OFAC has long devoted significant resources to 
        compiling evidence on SDNs that routinely withstand challenges 
        in court, which enhances the effectiveness of United States 
        sanctions, encourages allies to consider comparable measures, 
        and strengthens national security.
            (8) On June 3, 2021, the President issued Executive Order 
        14032, which transferred responsibility for naming Chinese 
        military companies subject to investment restrictions to the 
        Secretary of the Treasury, and expanded restrictions to 
        entities operating in the surveillance technology sector of the 
        Chinese economy.
    (b) Sense of Congress.--It is the sense of the Congress that the 
national emergency declared under Executive Order 13959 calls for the 
President to--
            (1) more fully cut off financing avenues for Communist 
        Chinese military and surveillance companies;
            (2) prevent adaptation by a company to partial restrictions 
        that limit themselves to publicly traded securities;
            (3) ensure that the United States assembles an appropriate 
        evidentiary basis to support the effectiveness of sanctions;
            (4) enhance the impact of economic sanctions by deterring 
        third-country persons from dealing with the companies; and
            (5) link the imposition of sanctions to clear objectives 
        that serve to resolve the national emergency.

SEC. 3. SANCTIONS WITH RESPECT TO COMMUNIST CHINESE MILITARY AND 
              SURVEILLANCE COMPANIES.

    (a) In General.--Not later than 180 days after the date on which 
the first updated list is submitted under section 1237(b) of the Strom 
Thurmond National Defense Authorization Act for Fiscal Year 1999 (50 
U.S.C. 1701 note) on or after the date of the enactment of this Act, 
the President shall impose the sanctions described in subsection (b) 
with respect to--
            (1) each person that is on such updated list; and
            (2) each foreign person listed in the Annex to Executive 
        Order 13959 (85 Fed. Reg. 73185; relating to addressing the 
        threat from securities investments that finance Communist 
        Chinese military companies) of November 17, 2020, or determined 
        by the Secretary of the Treasury, in consultation with the 
        Secretary of State, and, as the Secretary of the Treasury 
        determines appropriate, the Secretary of Defense, to engage in 
        the activities described under section 1(a)(i) or 1(a)(ii) of 
        such Executive Order 13959,
if the President determines that the imposition of such sanctions meets 
appropriate evidentiary standards and advances the objective of 
resolving the national emergency described in Executive Order 13959 (85 
Fed. Reg. 73185; relating to addressing the threat from securities 
investments that finance Communist Chinese military companies) of 
November 17, 2020.
    (b) Sanctions Described.--The President shall 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 
block and prohibit all transactions in property and interests in 
property of a person if such property and interests in property--
            (1) are in the United States;
            (2) come within the United States; or
            (3) come within the possession or control of a United 
        States person.
    (c) Penalties.--The penalties set forth in section 206 of the 
International Emergency Economic Powers Act (50 U.S.C. 1705) apply to 
violations of any license, order, or regulation issued under this 
section.
    (d) Waiver.--The President may waive the application of sanctions 
under this section if the President certifies in writing to the 
appropriate congressional committees that the waiver is in the national 
interest of the United States, with an explanation of the reasons 
therefor.
    (e) Exception for Intelligence Activities.--Sanctions under this 
section shall not apply to 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 any authorized intelligence activities of the 
United States.
    (f) Conforming Requirement.--Not later than 180 days after the date 
of the enactment of this Act, the President shall revoke the 
prohibitions described in section 1(a) of Executive Order 13959 that 
are duplicative of, less restrictive than, or are otherwise made 
redundant by, the sanctions described in this section.
    (g) Appropriate Congressional Committees Defined.--In this section, 
the term ``appropriate congressional committees'' means--
            (1) the Committee on Foreign Affairs and the Committee on 
        Financial Services of the House of Representatives; and
            (2) the Committee on Foreign Relations and the Committee on 
        Banking, Housing, and Urban Affairs of the Senate.
    (h) Sunset.--The authority to impose sanctions under this section, 
and any sanctions imposed under this section, shall terminate on the 
earlier of--
            (1) the date that is 30 days after the date on which the 
        President repeals the national emergency declared under 
        Executive Order 13959; or
            (2) the date that is 7 years after the date of the 
        enactment of this Act.
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Chinese Military and Surveillance Company Sanctions Act of 2021
To impose sanctions with respect to Communist Chinese military and surveillance companies.
Chinese Military and Surveillance Company Sanctions Act of 2021
Rep. Barr, Andy